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Historical Background

The Creation of the NWRB's predecessor National Water Resources Council, as the Policy-Making Body for the Philippine Water Sector.

The predecessor of the NWRB is the National Water Resources Council (“NWRC”), which was created in 1974 under Presidential Decree No. 424, otherwise known as the “Integrated Reorganization Plan”. It was subsequently renamed as NWRB pursuant to Executive Order No. 124-A. Under the said decree, the NWRB is tasked among others, to:

  •     Coordinate and integrate water resource development activities of the country;
  •     Formulate general criteria, methods and standards for data collection, project investigation, formulation, planning design and feasibility evaluation, and rules and regulations for the exploitation and optimum utilization of water resources;
  •     Review and approve water resource development plans and programs of other agencies;
  •    Undertake river basin surveys, inventories and appraisals, and develop comprehensive basin-wide plans of storage and control to maximize the conservation and multi-purpose use of water;
  •     Undertake hydrologic surveys and establish, operate and maintain observation station networks and centralized water resources data center;
  •     Conduct and/or promote special studies and researches with other government or agencies on related aspects of water resources development.

The NWRB is also tasked to advise the National Economic and Development Authority (“NEDA”) on matters pertaining to water resources development projects and programs; and recommend general policies and guidelines and short/long range plans and programs for water resources development.

The Institution of NWRB as Resource Regulator.

In 1976, Presidential Decree No. 1067, otherwise known as the “Water Code of the Philippines” was enacted. Based on the principles that: (a) “all water belongs to the State;” and (b) the State may allow the use or development of its waters by administrative concession,” the NWRB was instituted as a “water resource regulator” tasked to regulate and control the utilization, exploitation, development, conservation and protection of all water resources.

The specific functions of the NWRB, as a "Water Resource Regulator", include among others, (a) the issuance water permits for the appropriation, and use of waters; and (b) adjudication of disputes relating to the appropriation, utilization, exploitation, development, control and conservation, protection of waters.

The Institution of NWRB as Economic Regulator for Waterworks Systems.

In 1977, the Board of Power and Waterworks (BPW) was abolished pursuant to Presidential Decree No. 1206. The function of the BPW that were inherited from the Public Service Commission as regards waterworks systems, were later transferred to the NWRB, instituting the NWRB as an “economic regulator” of waterworks systems.

The Transfer of Regulation of Water Tariffs for Water Districts to the NWRB.

In 2002, the approval of tariffs for water districts was transferred to the NWRB from the Local Water Utilities Administration (LWUA), pursuant to Executive Order No. 123. In the same executive order, the membership of the NWRB Board was changed to its present composition.

 


MALACAÑANG Manila

PRESIDENTIAL DECREE NO. 424



CREATING A NATIONAL WATER RESOURCES COUNCIL, RECONSTITUTING ITS MEMBERSHIP, VESTING THE SAME WITH POWERS TO COORDINATE AND INTEGRATE WATER RESOURCES DEVELOPMENT, AND PROVIDING FUNDS THEREFOR

WHEREAS, the social and economic progress of the country is highly dependent on the proper development, control and utilization of its total water resources;

WHEREAS, as the country progresses and the population increases, there will develop, as has been experienced, keener competition and conflict of interests among water users; and

WHEREAS, there is an urgent need for a well-integrated and coordinated planning and prosecution of projects, including an expanded effort in the continuing task of water resources survey and appraisal, in order to achieve an orderly and scientific development as well optimum utilization and control of our water resources to meet the present and future water needs of the country;

NOW, THEREFORE, I, FERDINAND MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution do hereby order and decree:

SECTION 1.  The Water Resources Committee under Article XI, Chapter I, Part X of the Integrated Reorganization Plan shall be renamed National Water Resources Council, hereinafter called the Council, and attached to the Department of Public Works, Transportation and Communication (DPWTC).

SECTION 2. The Council shall have the following functions, duties and powers: A.  Regulatory and Executory
a.   Coordinate and integrate, on a sound and logical basis, water resources development activities of the country within the context of national plans and policies for social and economic development;
b.   Determine, adjudicate, and grant water rights amending, for this purpose, Act No.
2152, and other laws relating to the appropriation and utilization of surface and ground water;
c.   Formulate  and promulgate:
1)  General   criteria,   methods,   and   standards   for   basic   data   collection,   project investigation, formulation, planning and design, and feasibility evaluation; and
 
2)  Rules and regulation for the exploitation and optimum utilization of water resources, including the imposition on water appropriators of such fees or charges as may be deemed necessary by the Council for water resources development;
d.   Review and approve water resources development plans and programs of any agency within the context of the overall national plans and program;
e.   Undertake river basin survey, inventory and appraisal of water and related resources and develop comprehensive basin wide plans of storage and control to maximize the conservation and multi-purpose use of water in the basin;
f.    Undertake hydrologic surveys and establish, operate and maintain observation station networks and a centralized water resources data center necessary for the scientific survey and appraisal of surface and ground water potentials of the country; and
g.   Conduct and/or promote special studies and researches with other government or private  agencies  on  all  related  aspects  of  water  resources  development  such  as weather modification, environmental quality, desalination and the like.

B.  Advisory and Recommendatory

a.   Apprise and/or advise the National Economic and Development Authority (NEDA)
on matters pertaining to water resources development projects and programs;
b.   Recommend to NEDA the adoption of general policies and guidelines and short/long range plans and programs for water resources development.

SECTION 3. The Council shall be composed of the following:

Secretary, Department of Public Works, Transportation    Chairman and Communications

Secretary, Department of Agriculture and Natural                            Member
Resources, or his Undersecretary

Director General, National Economic & Development                     Member
Authority, or his Deputy

Administrator, National Irrigation Administration                            Member General Manager, National Power Corporation                                Member Director, Bureau of Public Works                                                     Member
Provided, that the National Economic and Development Authority, in the exercise of its sound discretion, may increase or decrease the membership of the Council.

The members of the Council shall receive a reasonable amount of per  diem as the
Council may provide for every meeting actually attended by them.
 
SECTION 4. The Council shall have a working staff which shall function under the supervision and control of an Executive Director, who shall be appointed by the President of the Philippines upon recommendation of the Council.  The Executive Director shall receive salary as may be fixed by the Council.   Initially, the Water Resources Survey Division of the Bureau of Public Works shall be the working staff of the Council.  The appropriate personnel, records, functions and applicable appropriations, properties and facilities of the Division shall be transferred to the Council within the current fiscal year. The Council shall fully organize and expand its working staff, and shall fix the salaries and  enumerations,  including  per  diems  and  allowances  of  the  personnel,  subject  to existing requirements, but exempt from WAPCO and Civil Service rules and regulations, insofar as technical positions are concerned; provided that the personnel shall be entitled to benefits and privileges normally accorded government employees, such as retirement, GSIS insurance, leave and similar matters.

SECTION 5. In the performance of its functions, the Council may request and secure the assistance of any government agency, office or instrumentality which the Council is hereby  authorized  to  call  upon.    Whenever  necessary,  the  Council  may  enter  into contracts for consultancy services.

SECTION 6. The amount of Ten Million Pesos out of any available funds from the National Treasury is hereby appropriated and authorized to be released, for the organization of the Council and its initial operations, including purchase of hydrologic equipment.  Henceforth, funds sufficient to fully carry out the functions and objectives of the Council shall be appropriated every fiscal year in the General Appropriations Act. The budget of the Council shall be in the form of lump sum appropriations with the Council having the sole authority to determine details of expenditures; provided that the Council shall submit to DPWTC a report of disbursement thereof within 45 days after the close of each fiscal year.

SECTION 7. The Council shall hold its organization meeting within forty-five days upon promulgation of this decree.

SECTION 8. The functions, monies, and records, properties, rights and obligations of the
Water Resources Committee are herby transferred to the Council;

SECTION 9. All laws, decrees, charters, executive orders, administrative orders, proclamations, rules and regulations, or parts thereof in conflict with this Decree re hereby repealed or modified accordingly.

SECTION 10. If any provision, provisions, part or parts of this decree is declared unconstitutional, such declaration shall not invalidate the other provisions hereof.

This Decree shall take effect immediately.

Done in the City of Manila, this 28th  day of March in the Year of Our Lord, Nineteen
Hundred and Seventy Four.
 

FERDINAND E. MARCOS President
Republic of the Philippines

By the President:

(SGD.) ALEJANDRO MELCHOR Executive Secretary

 


 

PRESIDENTIAL DECREE  NO. 1206

CREATING THE DEPARTMENT OF ENERGY



WHEREAS, the world-wide energy situation indicates that an adequate supply of energy resources for the country’s needs has become of long-term and vital national concern considering that the adequacy of energy resources is indispensable to accelerated economic growth;

WHEREAS, the Philippines has embarked on a multi-dimensional response to the energy crisis, designed to achieve the national objective of self-reliance and independence on the sourcing of energy through intensive exploration and development of indigenous energy resources, and through the judicious conservation and efficient utilization of energy;

WHEREAS,  there  is  critical  need  to  further  rationalize  the  country’s  total  energy  resource development program in order to accelerate its self-reliance and conservation program relative to energy resources on an integrated and comprehensive basis; and

WHEREAS, meeting the country’s energy requirements has become an integral and regular function of the government, vast enough such that no less than an agency with departmental status is required which shall serve as the government’s primary instrumentality in the formulation and implementation of its energy resource development program on a unified and coordinated approach.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby order and decree the following to be part of the law of the land:

Section 1.   Declaration  of Policy —   It is declared policy of the state to ensure a continuous and adequate supply of energy with the end in view of ultimately achieving self-reliance in the country’s energy requirements, through intensive exploration and development of indigenous energy resources, and through the judicious conservation and efficient utilization of energy consistent with the country’s accelerated economic growth and taking into consideration the significant and continuing participation of the private sector in the various areas of energy resource development.

Section 2.  Creation of a Department of Energy —  Pursuant to the above-mentioned policy, there is hereby created a Department of Energy, hereinafter referred to as the Department which shall, among others formulate and implement the government policies, plans and programs on energy resources development.

Section 3.  Authority and Responsibility—  The authority and responsibility for the exercise of the powers and the discharge of the functions of the Department shall be vested in a Secretary of Energy, hereinafter referred to as the Secretary.  The Secretary shall be assisted by one Undersecretary.

Section 4. Powers and Functions—   The Department shall have the following powers and functions:
a.    Formulate  policies,  consistent  with  Section  1  above  and  pertinent  national  guidelines,  and coordinate all activities of the government relative to the exploration, exploitation, development, extraction, importation, transport marketing, distribution, and storage of energy resources from fossil fuels such as petroleum, coal, natural gas and gas liquids; nuclear fuel, resources; geothermal resources and non- conventional existing and potential forms of energy resources;
b.     Establish     and  administer  a  comprehensive  and  integrated  programs  for  the  exploration, exploitation, development, extraction, importation, exportation, transport, marketing, distribution, and storage of fossil, nuclear, geothermal and non-conventional forms of energy resources;
c.  Encourage, guide and where necessary, regulate such business activity relative to the exploration,
exploitation  development,  extraction,  importation,  exploration,  transport,  marketing,  distribution  and storage of fossil, nuclear, geothermal, and non-conventional forms of energy resources and prescribe and collect fees in the exercise of such power;
 
d.   Assess, review and provide direction to, in coordination with   concerned government agencies, energy research and development programs including identification of sources of energy and determination of their commercial feasibility for development;
e.    Exercise  the  powers  and  functions  of  the  abolished  Energy  Development  Board  and  Power
Development Council under Section 11 (a) and (b) of this Decree;
f.    Formulate  such  rules  and  regulations  as  may  be  necessary  to  implement  the  objectives  and provisions of this Decree; and
g.  Exercise all powers necessary or incidental to attain the objectives of this Decree.

Section. 5.  Department Proper—   The Department shall have an Administrative Service, a Financial and Management Service, and a Planning Service.
The Administrative Service shall be responsible for providing the Department with services relating to personnel,  legal  assistance,  information,  records,  supplies,  equipment,  collection  and  disbursements,
security and custodial work.
The Financial and Management Service shall be responsible for providing the Department with staff advice and assistance on budgetary, financial, and management improvement matters.
The Planning Service shall be responsible for providing the Department with services relating to planning programming, and project development, including the formulation of short and long term energy including power development policies and programs and their priorities as may be warranted by domestic
or international developments.  It shall also review and evaluate energy development programs, including
those which concern the development and utilization of non-conventional forms of energy resources.

Section 6.  Bureau of Energy Development—  There is created in the Department a Bureau of Energy Development, hereinafter referred to in this Section as the Bureau, which shall have the following powers and functions, among others:

a.  Administer a national program for the encouragement, guidance, and whenever necessary regulation of such business activity relative to the exploration, exploitation, development, and extraction of fossil fuels such as petroleum, coal, natural gas and gas liquids; nuclear fuel resources; geothermal energy resources; and non-conventional forms of energy resources;
b.  Undertake by itself or cause the undertaking by other institutions, government or private, of intensive  research  and  development  to  achieve  the  country’s  self-reliance  and  conservation  program relative to energy resources;
c.  Exercise such powers and functions of the Energy Development Board as shall hereafter be transferred to it;  and
d.  Promulgate such rules and regulations as may be necessary, subject to the approval of the Secretary, for the efficient, effective and economical exercise of its power and functions.

The decisions,  orders, resolutions  or actions of the Bureau may be appealed to the Secretary whose decisions are final and executory unless appealed to the President.

Section 7. Bureau  of Energy Utilization—  There is created in the Department of Bureau of Energy Utilization, herein after referred to in this Section as the Bureau, which shall have the following powers and functions, among others:
a.  Administer a national program for the encouragement, guidance and, where necessary, regulation of such business activities as importing, exporting, storing, shipping, transporting, refining, processing, marketing, and distributing of energy resources.   Energy resources mean any substance or phenomena which by itself or in combination with others, or after processing or refining or the application to it of technology, emanates, generates or causes the emanation or generation of energy, such as but not limited to petroleum or petroleum products, coal, marsh gas, methane gas, geothermal and hydroelectric sources of energy, uranium and other similar radioactive minerals, solar energy, tidal power, as well as non- conventional existing and potential sources.
b.  Exercise such powers and functions of the abolished Oil Industry Commission under Republic Act
No. 6173, as amended, which are hereafter transferred to it under Section 12 of this Decree.
c.  Promulgate, subject to the approval of the Secretary, such rules and regulations as may be necessary for the efficient, effective and economical exercise of its powers and discharge of its functions.
 

The decisions, orders, resolutions or actions of the Bureau may be appealed to the Secretary whose decisions are final and executory unless appealed to the President.

Section 8.  Transferred  Agency— The Philippine Atomic Energy Commission is transferred from the supervision and control of the Office of the President and placed under the supervision and control of the Department.

Section 9.  Board of Energy—  There is hereby created a Board of Energy, hereafter referred to in this Section as the Board, which shall be under the supervision and control of the Office of the President, and shall be composed of a Chairman and two (2) members to be appointed by the President.   It shall be assisted by such technical and supportive staffs as it may appoint for the effective, efficient and economical discharge of its powers and functions.
The Chairman and members of the Board shall be natural born citizen and residents of the Philippines, of good moral character and at least thirty-five (35) years old.  The Chairman shall be a lawyer with substantial experience in the practice of law.  The members shall be of recognized competence in the field
of economics, finance, banking commerce, industry, agriculture, engineering, management, law or labor.
No person who has worked within three (3) years immediately prior to his appointment or is working in any private firm engaged in the petroleum or electric industry or any  other entity whose main business is directly related to or connected with any firm shall be appointed to the Board
The term of  office of the Chairman and members shall be four (4) years, but the first Chairman appointed shall hold office for four (4) years and of the first two (2) members, one (1) shall hold office for a term of three (3) years, and the other for a term of two (2) years.  Unless the President decides otherwise, no person shall be appointed to serve more than two (2) successive terms in the Board.

The Chairman of the Board shall receive a compensation of fifty-four thousand pesos annually, while the members shall each receive an annual compensation of forty-eight thousand pesos, together with such allowances as are presently enjoyed by the Chairman and members of the abolished Oil Industry Commission.

The Board shall, after due notice and hearing, exercise the following powers and functions, among others:

a.  Regulate and fix the prices of petroleum products, and exercise such other powers and functions of the abolished Old Industry Commission under Republic Act No. 6173, as amended, which are hereafter transferred to it under Section 12 of this Decree;
b.  Regulate and fix the rate schedule or prices of piped gas to be charged by duly franchised gas companies which distribute gas by means of underground pipe system;
c.    Regulate  and  fix  the  power  rates  to  be  charged  by  electric  companies  except  (1)  electric cooperatives which shall continue to be governed by Presidential Decree No. 269, as amended, and (2) the
National Power Corporation which shall continue to be governed by Republic Act No. 6395, as amended;
d.  Perform such other powers and functions as may be necessary, including the licensing of refineries and regulation of their capacities; reviewing the importation costs of crude oil and providing appropriate remedies for unreasonable or out of line prices and shipping costs thereof; and taking adequate measures to insure that extraordinary gains arising from an increase in the prices of petroleum products redound to the public interest, including payment by persons or entities engaged in the petroleum business to the Special Fund created under  Section 8(j) of Republic Act No. 6173, as amended: Provided, That the purposes of such Special Fund are hereby broaden to include its utilization for all energy projects; and
e.  Issue Certificates of Public Convenience for the operation of electric power utilities and services except electric cooperatives which shall continue to be governed by Presidential Decree No. 269, as amended, including the establishment and regulation of areas of operation of particular operators of public
power utilities and services, the fixing of standards and specifications in all cases related to the issued
Certificates of Public Convenience, and the promulgation of rules requiring the operators concerned to install such devices and adopt such procedures as would promote or insure the highest degree of safety and convenience to persons and property.
 
The provisions of Sections 11 and 12, Republic Act No. 6173, as amended by Presidential Decree No.
1128, shall govern proceedings before the Board, the mode of review of its decisions or orders, including its authority to grant provisional relief.

Section 10. Attached Agencies—   The following government corporations are attached to the Department for purposes of policy coordination and integration with sectoral programs; Philippine National Oil Company, National Power Corporation and National Electrification Administration.  Such attachment shall be in accordance with the applicable provisions of Article III, Chapter IV, Part II and of Article III, Chapter I, Part XI of the Integrated Reorganization Plan
The ownership by the National Development Company of shares in the Manila Gas Corporation is hereby transferred to the Philippine National Oil Company, subject to the payment to national Development Company of the corresponding book value of its share-holdings in the said corporation as of date of transfer to the Philippine National Oil Company.
Unless the President directs otherwise the Secretary of the Department shall be ex-officio Chairman of the governing boards of the Philippine National Oil Company, National Power Corporation, and National Electrification Administration.  The Secretary of Public Works, Transportation and Communications shall
be the ex-officio member of the governing boards of the National Electrification Administration and
National Power Corporation in lieu of one appointive position in the membership of said governing boards.

Section 11. Abolished Agencies

a.  The Energy Development Board is abolished and its powers and functions are transferred to the Department except those that are specifically transferred to the Bureau of Energy Development under Section 12 of this Decree.
b.  The Power Development Council is abolished and its powers and functions are transferred to the
Department.
c.  The Philippine National Petroleum Center is abolished and its functions are transferred to the appropriate units of the Department.
d.  The Oil Industry Commission is abolished and its powers and functions are transferred to the Board of Energy and the Department or the Bureau of Energy Utilization, as provided for in Section 12 of this Decree.
e.  The Board of Power and Waterworks is abolished and its powers and functions relative to power
utilities are transferred to the Board of Energy, while its powers and functions relative to waterworks are transferred to the National Water Resources Council.
All the foregoing transfers of powers of functions shall include applicable funds and appropriations, records, equipment, property, and such personnel as may be necessary:   Provided, That with particular
reference to Paragraph of this Section, only such amount of funds of the Specialized Regulatory Boards
which pertain to the Board of Power and Waterworks, as well as only the personnel of the common Technical Staff of the Specialized Regulatory Boards completely or primarily involved in power and waterworks shall be involved in such transfers: Provided, further, That the applicable funds and appropriation of the Oil Industry Commission shall all be transferred to the Board of Energy.
Likewise, the foregoing transfer of powers and functions of the abolished agencies shall be to the extent that they are not modified by any specific provision of this Decree.

Section 12. Transferred  Powers and Functions—The  following powers and functions are transferred as hereinafter indicated to the extent that they are not modified by any specific provision of this Decree:

a.   With reference to Section 11 (a) above, the powers and functions transferred to the Bureau of
Energy Development are:
i.   The following powers and functions of the abolished Energy Development Board under Presidential Decree No. 87:   Provided, That service contracts authorized under the said Decree, including the transfer or assignment of interest in said service contracts, shall require the approval of the Secretary:
1)  Define and give public notice when applicable of the areas available for service contract;
2)    Enter  into  contracts  herein  authorized  with  such  terms  and  conditions  as  may  be appropriate under the circumstances:  Provided, however, That no depletion allowance Provided,
 
further, That except as provided in Section 26 and 27 of Presidential Decree No. 87, no contract in favor of one contractor and its affiliates shall cover less than fifty thousand hectares nor more than seven hundred and fifty thousand hectares for on-shore areas, or less than eighty thousand nor more than one million five hundred thousand hectares for off-shore areas:  And, Provided, finally, That in no case  shall the annual net revenue or share of the government, including all taxes paid by or on behalf of the contractor, be less than sixty percent of the difference between the gross income and the sum of operating expenses and Filipino participation incentive;
(3)  Provide for the manner and form of the income tax payment, the reimbursement of operating expenses and the payment of service fee in the service contract;
(4) Make specific proposals to the President for the grant of subsidy to contractors and petroleum companies at least sixty percent of the capital of which is owned by Philippine citizens,
to be derived from the revenue or share that will accrue to the government in pursuance of
Presidential Decree No. 87;
(5)  Undertake  intensive  studies  and  researches  on  oil  field  practices,  procedures,  and policies; and
(6)  Promulgate  such  rules  and  regulations  as  may  be  necessary  and  assess  charges  for services rendered, to implement the intent and provisions of Presidential Decree No. 87.

ii.   The following powers and functions of the abolished Energy Development Board under Presidential Decree No. 910:  Provided, That service contracts authorized under the said Decree, including the transfer or assignment of interest in said service contracts, shall require the approval of the Secretary;

(1)  Undertake by itself or through other arrangements, such as service contract, the active exploration, exploitation, development, and extraction of energy resources in selected areas and/or in government reservations;
(2)    Regulate  all  activities  relative  to  the  exploration,  exploitation,  development,  and extraction of fossil and nuclear fuels and geothermal resources and, where necessary, prescribe and collect fees in the exercise of such power;
(3)   Exercise the other appropriate powers and functions of the Petroleum Board under Presidential Decree No. 87 which were transferred to the   Energy Development Board by Presidential Decree No. 910; and
(4)   Exercise the powers and functions of the Bureau of Mines and/or the Department of Natural Resources relative to the exploration, development, and administration of coal bearing lands as provided for in Presidential Decree No. 463 and Act No. 2719, including the powers and functions of the Bureau of Mines and/or the Department of Natural Resources under Republic Act No. 5093 and other laws relating to the promotion and regulation of the exploration, exploitation and development of geothermal energy, natural gas and methane gas.

iii.  The powers and functions of the abolished Energy Development Board under Section 18 of Presidential Decree No. 972, entitled “An Act to Promote an Accelerated Exploration, Development, Exploitation, Production and Utilization of Coal”, relative to the implementation of the provisions of the said Decree and the promulgation of rules and regulations to implement the same:  Provided, That coal operating contracts, including the transfer of assignment of interest in said contracts, shall require the approval of the Secretary.

iv.   The following powers and functions of the abolished Energy Development Board under
Section 3 of Presidential Decree No. 1068:

(1)  Formulate and direct the implementation of a comprehensive national energy program, subject to periodic review and revisions on non-conventional energy research, development and utilization;
(2)  Integrate, coordinate, direct and control all research, development and utilization efforts, programs and projects in non-conventional energy resources of all government agencies and instrumentalities including government-owned and controlled corporations;
 
(3)    Review and  approve  all  on-going  or  planned  research,  development  and  utilization projects on non-conventional energy resources whether basic or applied in nature, supported or planned to be supported by government funds or funds obtainable elsewhere through
government    intercession or assistance;
(4)   Formulate criteria for determining priority for proposed research, development and utilization projects on non-conventional energy resources and accordingly identify and select execution, financing and funding schemes;
(5) Designate project implementors, coordinate and monitor the progress of all projects and activities, on-going or planned projects, in the implementation of the comprehensive national energy program;
(6)   Provide necessary and supportive efforts to the non-conventional energy research, development and utilization program such as the launching of  vigorous information an promotion drive, assistance and entry of suitable foreign expertise in order to accelerate the pace of local research,  development  and  utilization  and  the  training  of  qualified  Filipino  personnel  in  the various aspects of non-conventional energy, proliferation of those applications in which technologies have proven viable, such as bio-gas generation, windmills for water pumping and power generation from agricultural and industrial wastes, establishment of demonstration systems like solar water heaters, solar air-conditioning and energy plantations;
(7) Develop and implement specific programs requiring the participation not only of government agencies and instrumentalities but also of the private sector;
(8)  Grant incentives provided for in Presidential Decree No. 1068 and recommend the grant of  such  other  incentives  as  shall  be  necessary  and  appropriate  to  enterprises,  industries  and
individuals who shall conduct their own or participate in research and development or apply
currently available non-conventional energy technology to their industrial processes or homes; and
(9)  Promulgate such rules and regulations as may be necessary to implement the objectives and provisions of Presidential Decree No. 1068.

b.   With reference to Section 11 (d) above, the powers and functions of the abolished Oil Industry
Commission under Republic Act No. 6173, as amended, shall be transferred as follows:

I.  The following powers and functions are transferred to the Department:
(1)  Assure that the country shall have a proper, adequate and continuous supply of crude oil and refined petroleum products under the most economic and competitive terms possible considering all
available sources of supply;
(2)  Study the importation of crude oil into the Philippines and determine its most economical sources, transportation routes, and freight rates;
(3)  Look into all available sources of supply of crude oil, draw up plans to cope with such contingencies as may arise should prevailing sources of supply become closed or inaccessible, and enter into such preliminary negotiations or arrangements with possible alternative courses as may be
necessary to assure a stable, adequate and continuous supply of crude oil and refined petroleum
products under the most economic and competitive terms possible;
(4)  Recommend to the President that the State, thru such agency or agencies as the President may designate, acquire equity in any refinery now existing or that may be organized hereafter:  Provided, however, That equity so acquired shall eventually be made available to the public under such terms and conditions as shall be consistent with government policy then in effect, giving priority to dealers of petroleum products and gasoline station owners or operators; and
(5)  Recommend to the President that the State, thru such agency as the President may designate, take over the operation of any refinery or other firm, corporation or entity engaged in the petroleum industry whenever the public welfare or national interest so requires or (a) such refinery, firm, corporation or entity ceases or threatens to cease or substantially reduce its operations; and (b) its cessation or threatened cessation or reduction or threatened reduction of operations threatens the continued supply of petroleum products at reasonable prices to the general public or to industries dependent on petroleum products for sources of energy or otherwise creates a clear and present danger to the national welfare or national security:  Provided, however, That the operation by the State shall continue only for such period of time as the threat or danger persists:  Provided further, That just compensation shall be paid for the use of the property: and, Provided, finally, That any unrecovered
 
investment  made  by  the  State  during  the  take  over  shall  be  reimbursed  by  the  refinery,  firm, corporation or entity.

ii.  The following powers and functions are transferred to the Bureau of Energy Utilization:

(1)    Assure  that  the  petroleum  industry,  as  a  business  vital  to  the  interest,  operates  under conditions or orderly and economic competition;
(2) Protect gasoline dealers and distributors from unfair and onerous trade conditions;
(3)  Minimize the cost of and the outflow of foreign exchange involved in, the operation of the industry;
(4)  Induce and effect the increasing participation of Filipino capital, labor and management in the industry and prevent discrimination against any person by reason of race, color, creed or political
belief;
(5)  Regulate investments of oil companies in order to prevent monopoly, combinations in restraint of trade, unfair competition and economic domination;
(6)  Encourage and assist in the organization of association of Filipino oil and gasoline dealers and distributors throughout the Philippines, public utility operators, gasoline and oil consumers, and other
similar groups, through the formation of cooperatives or through other group action;
(7)  Regulate the operations and trade practices of the industry in order to encourage orderly competition, prevent monopolies and collusive practices within the industry, giving due regard to the ecological and environmental needs of the country;
(8)   Require that preference be given to Philippine vessels and bottoms for the purpose of transporting crude oil to and from the Philippines where said vessels can undertake said function on substantially the same basis as foreign-owned vessels;
(9)  Take adequate steps to prevent monopolies and combinations in restraint of trade within the petroleum industry, or involving enterprises engaged in the petroleum industry;

(10) Authorize or approve the importation by any agency or instrumentality of the government or a government-owned or controlled corporation of crude oil or petroleum product from any available source, over and above the normal importations of such entities, whenever it has determined that there is a shortage of any petroleum product affecting public interest, and take such other steps as it may deem necessary, including the temporary adjustment of the levels of prices of petroleum products and the adoption of a mechanism which will require the payment to the Special Fund created under Section
8 (j) of Republic Act No. 6173, as amended, by persons or entities engaged in the petroleum industry, in such amount as it may determine, which will enable the importer to recover its cost importation; and (11)  Require  all  dealership  agreement  to  be  filed  and  registered  with  the  Bureau  as  public
documents.

iii.  The following powers and functions are transferred to the Board of Energy:

(1)  Assure the public of reasonable prices for petroleum products considering the international price levels of crude oil and petroleum products and after allowing for proper and reasonable cost of importing, shipping, transporting, processing, refining, storing, distributing, marketing and selling crude oil and petroleum products in the Philippines, and for a fair and reasonable return; and prevent collusive practices in the industry, particularly as to prices;
(2)  Determine whether current prices of petroleum products are reasonable and set the prices of the same, providing for a fair and reasonable return.  No changes in prices may thereafter be made by the Board without prior public notice and hearing at which any consumer of petroleum products and
other parties who may be affected may appear and participate.  In setting prices or making changes
thereof, the Board shall be guided by the following considerations:

(a) Whether claimed increases or decreases in costs, sales or profits are real or simulated;
(b)  Whether expenses and costs which are claimed to have been incurred, or are being incurred, or are to be incurred are reasonable, and whether any increase therein may be offset by increased efficiency and reduction of excessive or unnecessary expenses;
 
(c)    The  impact  of  the  proposed  prices  or  change  therein  on  the  economy  and  on  the consuming public particularly low income groups and industries essential to the national welfare or security; and
(d) The cost and profit levels of the industry.
(3)  Regulate the capacities of new refineries or additional capacities of existing refineries so as to accomplish the purposes and objectives of Republic Act No. 6173, as amended;
(4) License refineries that may be organized after the enactment of this Decree, under such terms and conditions as are consistent with the national interest;
(5)    Review  the  cost  at  which  crude  oil  had  been  imported  into  the  Philippines within  the
preceding year whether by private entities or by the government, whenever the Board has received a formal complaint or has reason to believe that prices of shipping costs at which crude oil has been or is being imported into the Philippines are unreasonable or out of line with trends in the international market, taking into consideration among other factors, the quality and security of supply, availability and location of crude oil, and freight rates prevailing at the time; and if found to be unreasonable or out of line, require the importer or importers concerned to reimburse the excess of the foreign exchange involved to the Central Bank of the Philippines, and fix the maximum import cost, requiring that, before future importation be made at a cost in excess thereof, the approval of the Board be first secured. Any order of the Board in the exercise of this power shall be binding on the Central Bank of the Philippines, the Bureau of Customs and all other executive agencies of the government;
(6)    Take  appropriate  measures  whenever  an  authorized  increase  in  the  prices  of  petroleum products would result in an extraordinary gain from existing inventories, including the payment by persons or companies benefited to the Special Fund created under Section 8(j) of  Republic Act No.
6173, as amended, of such amounts as the Board may determine in an appropriate order, as would
assure that said extraordinary gain will redound to the public interest; and
(7)  Require through an appropriate order, payment by persons or companies engaged in the business  of  importing,  manufacturing  and/or  marketing  petroleum  products,  to  the  Special  Fund created under Section 8(j) of Republic Act No. 6173, as amended, of amounts not exceeding fifteen centavos per liter of refined petroleum products.  In the exercise of this power, the Board shall take into account the requirements of the Special Fund in relation to the purposes for which it was created, the effect of the payment on prices of petroleum products and, corollarily, its cost impact on the economy and/or the consuming public and the cost and profit levels of the industry.

iv.  Except as otherwise specifically provided, the following powers and functions of the abolished Oil Industry Commission under Republic Act No. 6173, as amended, are transferred either to the Bureau of Energy Utilization or the Board of Energy, or both, to the extent applicable and appropriate in the light of the foregoing transfers of powers and functions:

(1)  Set conditions which would accomplish the purposes of Republic Act No. 6173, as amended, under  which  persons,  natural  or  juridical,  can  engage  or  continue  engaging  in  the  business  of importing, exporting, re-exporting, shipping, transporting, processing, refining, storing, distributing, marketing or selling crude oil, gasoline, kerosene, gas and other refined petroleum products or by- products;
(2)   Require importers of crude oil and petroleum products to file data on their import and shipping costs as well as other material information relative thereto;
(3)   Require all persons, corporations and other entities engaged in the petroleum industry and their associations or institutes, to furnish it with such relevant information as it may need in the
discharge of its duties;
(4)  Require all dealership agreements to be filed and registered as public documents;
(5)  Issue subpoena and subpoena duces tecum in any inquiry, study, hearing, investigation, or proceedings which it may decide to undertake in the exercise of its powers and functions;
(6)  Promulgate rules and regulations relevant to procedures governing hearings before it and enforce compliance with any rule, regulation, order, or other requirement:  Provided, That said rules
and regulations shall take effect fifteen days after publication in the Official Gazette;
(7)  Perform such other acts as may be necessary or conductive to the exercise of its powers and functions; and
 
(8)  Undertake a continuing study of the petroleum industry in its domestic and international aspects, gather and collate information and statistics bearing on the industry, submit an annual report to the President of the Philippines on its activities and the results of its  studies, including therein such matters as it may deem appropriate subjects of legislation or executive action; and keep itself regularly and thoroughly informed of conditions in the industry in order to enable it to perform its functions, exercise its powers and discharge its duties effectively.
The annual report shall include, among others, the following data on a company-by-company basis:
(a)   Volume, weight, type, import price, and supplier of crude oil and petroleum products imported;
(b)   Tonnage, type, nationality and ownership of vessels used in importing crude oil and petroleum products, as well as shipping costs;
(c)  Audited financial statements of petroleum refineries and marketing companies;
(d)  Data on exported products, price of  same, country of destination, and vessel used; (e)  Listed wholesale price of gasoline on a monthly basis;
(f)  Posted and market prices of crude oil at sources of importation and other known sources of crude oil supply; and
(g)  Cost of refining petroleum products.

v.   The provisions of Section 16 of Republic Act No. 6173, as amended, shall continue to be effective.

(c)  The powers and functions of the Philippine National Oil Company relating to the regulation of other oil companies, including the importation of refined petroleum products, are hereby transferred to the Department or its bureaus as appropriate.

Section. 13.  Concurrent  Authority Over the Regulation  of the Mining of Radioactive Minerals— The powers and functions of the Bureau of Mines relative to the mining location, registration, exploration, development and exploitation of radioactive minerals containing uranium, thorium and other radioactive elements under Presidential Decree No. 1101, shall be subject to the concurrent clearance of the Bureau of Energy Development, which may prescribe such additional terms and conditions as are necessary insofar as these pertain to energy development.

Section. 14.  Representation  in the National  Water Resources Council—   The Department shall be represented in the National Water Resources Council by the Secretary of Energy or his designated representative as an additional member thereof.

Section. 15.  Representation  in the NEDA—  The Secretary of Energy shall be an additional member of the NEDA Board.

Section. 16.  Representation in the National Science Development Board—  The Secretary of Energy and the Secretary of Industry shall be additional members of the National Science Development Board.

Section.   17.   Representation  in the National  Electrification  Administration—    The Secretary of
Energy shall be an additional member of the Board of National Electrification Administration.

Section. 18.  Representation  in the Maritime Industry Authority—  The Secretary of Energy shall be an additional member of the Board of the Maritime Industry Authority.

Section. 19.  Benefits of Personnel Who May Be Laid Off—  Personnel of agencies abolished or otherwise affected by this reorganization who are laid off as a result of the implementation of this Decree shall be entitled to benefits and privileges provided for under Section 5 and 6 Republic Act No. 5435, as amended.

Section. 20.  Appropriation—   To carry out the purposes of this Decree, there is hereby appropriated out of any funds in the National Treasury not otherwise appropriated, the sum of ten  million pesos
 
(P10,000,000,00) for the operation of the Department and its bureaus, including such amount thereof as may be needed to augment the appropriations of the Board of Energy, for the remaining period of FY 1997 in addition to whatever applicable appropriation that may be transferred to it from among the government agencies reorganized under this Decree.  Thereafter, the appropriation for the Department, its bureaus and the Board of Energy shall be included in the Annual General Appropriation Act.

Section.  21.    Applicability Clause—    The  applicable  provisions  of  Republic  Act  No.  6173,  as amended, otherwise known as the “Oil Industry Commission Act”; Presidential Decree No. 269, otherwise known as the “National Electrification Administration Decree”; Presidential Decree No. 87, also known as the “Oil Exploration and Development Act of 1972”; Presidential Decree No. 910, creating the Energy Development Board; Presidential Decree No. 948, strengthening and reconstituting the Power Development Council; Presidential Decree No. 972, otherwise known as the “Coal Development Act of 1976’, Presidential Decree No. 1068, directing the acceleration of research, development and utilization of non- conventional energy resources; Presidential Decree No. 1101, declaring areas containing radioactive minerals open to mining location and disposition and such other laws and decrees governing the administration and development of energy resources shall continue to have full force and effect, except insofar as inconsistent with this Decree.

Section. 22.  Separability Clause—  Should any provision of this Decree be held unconstitutional, no other provisions hereof shall be affected thereby.

Section. 23.  Repealing Clause—  All laws, decrees, executive orders, administrative orders, rules and regulations inconsistent herewith are hereby repealed, amended or modified accordingly.

Section. 24. Effectivity —  This Decree shall take effect immediately.

DONE in the City of Manila, this 6th day of October, in the year of Our Lord, nineteen hundred and seventy-seven.


(Sgd.)  FERDINAND E. MARCOS
President Republic of the Philippines

By the President:


(Sgd.)  JACOBO  C. CLAVE
Presidential Executive Assistant

 


 

MALACAÑANG
Manila

PRESIDENTIAL DECREE NO. 1067



A DECREE INSTITUTING A WATER CODE, THEREBY REVISING AND  CONSOLIDATING  THE  LAWS  GOVERNING  THE OWNERSHIP, APPROPRIATION, UTILIZATION, EXPLOITATION, DEVELOPMENT, CONSERVATION AND PROTECTION OF WATER RESOURCES.

WHEREAS, Article XIV, Section 8 of the New Constitution of the Philippines provides, inter alia, that all waters of the Philippines belong to the State;

WHEREAS, existing water legislations are piece-meal and inadequate to cope with increasing scarcity of water and changing patterns of water use;

WHEREAS, there is a need for a Water Code based on rational concepts of integrated and multipurpose management of water resources and sufficiently flexible to adequately meet future developments;

WHEREAS, water is vital to national development and it has become increasingly necessary for government to intervene actively in improving the management of water resources;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the  Philippines,  by  virtue  of  the  powers  in  me  vested  by  the Constitution, do hereby order and decree the enactment of the Water Code of the Philippines of 1976, as follows:
 

CHAPTER I
DECLARATION OF OBJECTIVES AND PRINCIPLES

Article 1.    This code shall be known as The Water Code of the
Philippines.

Article 2.    The objectives of this Code are:

a.  To  establish  the  basic  principles  and  framework relating to the appropriation, control and conservation of    water    resources    to    achieve    the    optimum development    and    national    utilization    of    these resources;
b. To define the extent of the rights and obligations of water users and owners including the protection and regulation of such rights;
c. To adopt a basic law governing the ownership, appropriation, utilization, exploitation, development, conservation and protection of water resources and rights to land related thereto; and
d. To identify the administrative agencies which will enforce this Code.

Article 3.    The underlying principles of this Code are:

a.  All waters belong to the State.
b. All waters that belong to the State can not be the subject of acquisitive prescription.
c.  The  State  may  allow  the  use  or  development  of waters by administrative concession.
d. The      utilization,      exploitation,      development, conservation and protection of water resources shall be subject to the control and regulation of the government through the National Water Resources Council, hereinafter referred to as the Council.
e.  Preference  in  the  use  and  development  of  waters shall consider current usages and be responsive to the changing needs of the country.

Article  4.     Waters, as used in this Code, refers to water under the ground, water above the ground, water in the atmosphere and the waters of the sea within the territorial jurisdiction of the Philippines.
 
CHAPTER II OWNERSHIP OF WATERS

Article 5.    The following belong to the State;

a.  Rivers and their natural beds;
b.  Continuous  or  intermittent  waters  of  springs  and brooks running in their natural beds and the beds themselves;
c.  Natural lakes and lagoons;
d.  All other categories of surface waters such as water flowing over lands, water from rainfall whether natural or    artificial,   and   water   from   agricultural   runoff, seepage and drainage;
e.  Atmospheric water;
f.    Subterranean or ground waters; and, g.  Seawater

Article  6.    The following waters found on private lands also belong to the State;

a.  Continuous or intermittent waters rising on such lands;
b.  Lakes and lagoons naturally occurring on such lands;
c.  Rain water falling on such lands;
d.  Subterranean or ground waters; and, e.  Waters in swamps and marshes.

The owner of the land where the water is found may use the  same  for  domestic  purposes  without  securing  a permit, provided that such use shall be registered, when required by the Council. The Council, however, may regulate such use when there is wastage, or in times of emergency.

Article 7.      Subject to the provisions of this Code, any person who captures or collects water by means of cisterns, tanks, or pools shall have exclusive control over such water and the right to dispose the same.

Article 8.      Water legally appropriated shall be subject to the control of the appropriator from the moment it reaches the appropriator’s canal or aqueduct leading to the place where the water will be used or stored and, thereafter, so long as it is being beneficially used for the purposes for which it was appropriated.
 
CHAPTER III APPROPRIATION OF WATERS

Article 9.    Waters may be appropriated and used in accordance with the provisions of this Code.

Appropriation of waters, as used in this Code, is the acquisition of rights over the use of waters or the taking or diverting of waters from a natural source in the manner and for any purpose allowed by law.

Article 10.    Water may be appropriated for the following purposes:

a. Domestic b. Municipal c.  Irrigation
d.  Power generation e.  Fisheries
f.    Livestock raising g.  Industrial
h.  Recreational, and i.    Other purposes

Use of water for domestic purposes is the utilization of water for drinking, washing, bathing, cooking or other household needs, home gardens, and watering of lawns or domestic animals.

Use of water for municipal purposes is the utilization of water for supplying the water requirements of the community.

Use of water for irrigation is the utilization of water for producing agricultural crops.

Use of water for power generation is the utilization of water for producing electrical or mechanical power.

Use of water for fisheries is the utilization of water for the propagation and culture of fish as a commercial enterprise.

Use of water for livestock raising is the utilization of water for   large   herds   or   flocks   of   animals   raised   as  a commercial enterprise.
 
Use of water for industrial purposes is the utilization of water in factories, industrial plants and mines, including the use of water as an ingredient of a finished product.

Use of water for recreational purposes is the utilization of water for swimming pools, bath houses, boating, water skiing, golf courses and other similar facilities in resorts and other places of recreation.

Article 11.  The State, for reasons or public policy, may declare waters not previously appropriated, in whole or in part, exempt from    appropriation   for   any   or   all   purposes   and, thereupon,  such  waters  may  not  be  appropriated  for those purposes.

Article 12.   Waters appropriated for a particular purpose may be applied for another purpose only upon prior approval of the Council and on condition that the new use does not unduly prejudice the rights of other permittees, or require an increase in the volume of water.

Article 13.    Except as otherwise herein provided, no person, inclu- ding government instrumentalities or government-owned or controlled corporations, shall appropriate water without a water right, which shall be evidenced by a document known as a water permit.

Water right is the privilege granted by the government to appropriate and use water.

Article 14.  Subject to the provisions of this Code concerning the control, protection, conservation, and regulation of the appropriation    and  use  of  waters,  any  person   may appropriate or use natural bodies of water without securing a water permit for any of the following:

a. Appropriation of water by means of handcarried receptacles; and,
b.  Bathing or washing, watering or dipping of domestic or farm animals, and navigation of watercrafts or transportation of logs and other objects by floatation.

Article 15.    Only citizens of the Philippines, of legal age, as well as juridical persons, who are duly qualified by law to exploit and develop water resources, may apply for water permits.
 
Article 16.    Any person who desires to obtain a water permit shall file an application with the Council who shall make known said application to the public for any protests.

In determining whether to grant or deny an application, the Council shall consider the following: protests filed, if any; prior permits granted; the availability of water; the water supply needed for beneficial use; possible adverse effects; land-use economics; and other relevant factors.

Upon approval of an application, a water permit shall be issued and recorded.

Article 17.    The rights to the use of water is deemed acquired as of the date of filing of the application for a water permit in case of approved permits, or as of the date of actual use in a case where no permit is required.

Article 18.    All water permits granted shall be subject to conditions of beneficial    use,   adequate   standards   of   design   and construction,  and  such  other  terms  and  conditions  as may be imposed by the Council.

Such permits shall specify the maximum amount of water which may be diverted or withdrawn, the maximum rate of diversion or withdrawal, the time or times during the year when water may be diverted or withdrawn, the point or points of diversion or location of wells, the place of use, the purposes for which water may be used, and such other requirements the Council deems desirable.

Article 19.   Water rights may be leased or transferred in whole or in part to another person with prior approval of the Council, after due notice and hearing.

Article 20.   The measure and limit of appropriation of waters shall be beneficial use.

Beneficial use of water is the utilization of water in the right amount during the period that the water is needed for producing the benefits for which the water is appropriated.

Article 21.  Standards of beneficial use shall be prescribed by the Council    for   the   appropriator   of   water   for   different purposes and conditions, and the use of waters which
 
are appropriated shall be measured and controlled in accordance therewith.

Excepting those for domestic use, every appropriator of water   shall   maintain   water   control   and   measuring devices, and keep records of water withdrawal. When required by the Council, all appropriators of water shall furnish information on water use.

Article 22.   Between two or more appropriators of   water  from   the same source of supply,  priority in time of appropriation shall give the better right, except that in times of emergency the use of water for domestic and municipal purposes shall have a better right over all other uses; Provided, That where water shortage   is recurrent and the appropriator for municipal use has a lower priority in time of appropriation, then it shall be his duty to find an alternative    source   of   supply   in   accordance   with conditions prescribed by the Council.

Article 23.    Priorities may be altered on grounds of greater beneficial use, multi-purpose use, and other similar grounds after due    notice   and   hearing,   subject   to   payment   of compensation in proper cases.

Article 24.    A water right shall be exercised in such a manner that the rights of third persons or of other appropriators are not prejudiced thereby.

Article 25.    A holder of a water permit may demand the establish- ment of easements necessary for the construction and maintenance of the works and facilities needed for the beneficial use of the waters to be appropriated, subject to the  requirements  of  just  compensation  and  to  the following conditions:

a.  That  he  is  the  owner,  lessee,  mortgagee  or  one having  real  right  over  the  land  upon  which  he proposes to use water; and
b.  That the proposed easement is the most convenient and the least onerous to the servient estate.

Easements  relating  to  the  appropriation  and  use  of waters may be modified by the agreement of the contracting parties provided the same is not contrary to law or prejudicial to third persons.
 

Article 26.    Where water shortage is recurrent, the use of the water pursuant to a permit may, in the interest of equitable distribution of benefits among legal appropriators, be reduced after due notice and hearing.

Article 27.    Water users shall bear the diminution of any water supply due to natural causes of force majeure.

Article 28.   Water permits shall continue to be valid as long as water is beneficially used; however, it maybe suspended on the grounds of non-compliance with approved plans and specifications or schedules of water distribution; use of water for a purpose other than that for which it was granted; non-payment of water charges; wastage; failure to keep records of water diversion, when required; and violation of any term or condition of any permit or of rules and regulations promulgated by the Council.

Temporary permits may be issued for the appropriation and use of water for short periods under special circumstances.

Article 29.   Water permit may be revoked after due notice and hear- ing on grounds of non-use; gross violation of the conditions imposed in the permit; unauthorized sale of water; willful failure or refusal to comply with rules and regulations or any lawful order; pollution, public nuisance or acts detrimental to public health and safety; when the appropriator is found to be disqualified under the law to exploit and develop natural resources of the Philippines; when, in the case of irrigation, the land is converted to non-agricultural purposes; and other similar grounds.

Article 30.   All water permits are subject to modification or cancel- lation by the Council, after due notice and hearing, in favor of a project of greater beneficial use or for multi- purpose development, and a water permittee who suffers thereby  shall  be  duly  compensated  by  the  entity  or person in whose favor the cancellation was made.
 
CHAPTER IV UTILIZATION OF WATERS



Article 31.  Preference in the development of water resources shall consider security of the State, multiple use, beneficial effects, adverse effects and costs development.

Article 32.    The utilization of subterranean or groundwater shall be coordinated with that of surface waters such as rivers, streams, springs and lakes, so that a superior right in one adversely affected by an inferior right in the other.

For this purpose the Council shall promulgate rules and regulations and declare the existence of control areas for the coordinated development, protection and utilization of subterranean or groundwater and surface waters.

Control area is an area of land where subterranean or groundwater and surface water are so interrelated that withdrawal and use in one similarly affects the other. The boundary of a control area may be altered from time to time, as circumstances warrant.

Article 33.   Water contained in open canals, aqueducts or reservoirs of private persons may be used by any person for domestic purpose or for watering plants as long as the water is withdrawn by manual methods without checking the stream or damaging the canal, aqueduct or reservoir; Provided, That this right may be restricted by the owner should it result in loss or injury to him.

Article 34.   A water permittee or appropriator may use any water course    to   convey   water   to   another   point   in   the watercourse for the purpose stated in a permit and such water may be diverted or recaptured at the point by said permittee in the same amount less allowance for normal losses in transit.

Article 35.    Works for the storage, diversion, distribution and utilize- tion of water resources shall contain adequate provision for the prevention and control of diseases that may be induced or spread by such works when required by the Council.
 
Article 36.    When the reuse of waste water is feasible, it shall be limited as much as possible, to such other than direct human    consumption.   No   person   or   agency   shall distribute such water for public consumption until it is demonstrated that such consumption will not adversely affect the health and safety of the public.

Article 37. In the construction and operation of hydraulic works, due consideration shall be given to the preservation of scenic places and historical relics and, in addition to the provisions of existing laws, no works that would require the destruction or removal of such places or relics shall be undertaken without showing that the destruction or removal is necessary and unavoidable.

Article 38.    Authority for the construction of dams, bridges and other structures across or that which may interfere with the flow of navigable or floatable waterways shall first be secured from the Department of Public Works, Transportation and Communications.

Article 39.    Except in cases of emergency to save life or property, the construction or repair of the following works shall be undertaken    only   after   the   plans   and   specifications therefore, as may be required by the Council, are approved by the proper government agency; dams for the diversion or storage of water, structures for the use of water    power;    installations    for    the    utilization    of subterranean or groundwater and other structures for utilization of water resources.

Article 40.    No excavation for the purpose of emission of a hot spring or for the enlargement of the existing opening thereof shall be made without prior permit.

Any  person  or  agency  who  intends  to  develop  a  hot spring for human consumption must first obtain a permit from the Department of Health.

Article 41.   No person shall develop a stream, lake or spring for recreational purposes without first securing a permit from the Council.

Article  42.  Unless  otherwise  ordered  by  the  President  of  the Philippines and only in times of national calamity or emergency, no person shall induce or restrain rainfall by
 
any method such as cloud seeding without a permit from the proper government agency.

Article 43.    No person shall raise or lower the water level of a river, stream, lake, lagoon or marsh nor drain the same without a permit.

Article 44.    Drainage systems shall be so constructed that their out- lets are rivers, lakes, the sea, natural bodies of water, or such other water course as may be approved by the proper government agency.

Article 45.    When a drainage channel is constructed by a number of person for their common benefit, the cost of construction and maintenance of the channel shall be borne by each in proportion to the benefits derived.

Article 46.    When artificial means are employed to drain water from higher to lower land, the owner of the higher land shall select the routes and methods of drainage that will cause the minimum damage to the lower lands, subject to the requirements of just compensation.

Article 47.   When the use, conveyance or storage of waters results in damage to another, person responsible for the damage shall pay compensation.

Article 48.   When a water resources project interferes with the access of a landowner to a portion of his property or with the conveyance of irrigation or drainage water, the person or agency constructing the project shall bear the cost of construction and maintenance of the bridges, flumes and other    structures   necessary   for   maintaining   access, irrigation or drainage, in addition to paying compensation for land and incidental damages.

Article 49.   Any person having an easement for an aqueduct may enter upon the servient land for the purpose of cleaning, repairing or replacing the aqueduct or the removal of obstructions therefrom.

Article 50.  Lower estates are obliged to receive the waters which naturally and without the intervention of man flow from the higher estates, as well as the stone or earth which they carry with them.
 
The owner of the lower estate can not construct works which will impede this natural flow, unless he provides an alternative method of drainage; neither can the owner of the higher estate make works which will increase this natural flow.

Article 51.   The banks of rivers and streams and the shores of the seas and lakes throughout their entire length and within a zone of three (3) meters in urban areas, twenty (20) meters in agricultural areas and forty (40) meters in forest areas, along their margins are subject to the easement of public use in the interest of recreation, navigation, floatage, fishing and salvage. No person shall be allowed to stay in this zone longer than what is necessary for recreation, navigation, floatage, fishing or salvage or to build structures of any kind.

Article 52.  The establishment, extent, form and conditions of ease- ments    of   water   not   expressly   determined   by   the provisions of this Code shall be governed by the provisions of the Civil Code.
 
CHAPTER V CONTROL OF WATERS

Article 53.   To promote the best interest and the coordinated protec- tion of flood plain lands, the Secretary of Public Works, Transportation and Communications may declare flood control areas and promulgate guidelines for governing flood plain management plans in these areas.

Article 54.   In declared flood control areas rules and regulations may be promulgated to prohibit or control activities that may damage or cause deterioration of lakes and dikes, obstruct the flow of water, change the natural flow of river, increase flood losses or aggravate flood problems.

Article 55.  The government may construct necessary flood control structures in declared flood control areas, and for this purpose it shall have a legal easement as wide as may be needed along the adjacent to the river bank and outside the bed or channel of the river.

Article 56.   River beds, sand bars and tidal flats may not be cultivated except upon prior permission from the Secretary of the Department    of   Public   Works,   Transportation   and Communication and such permission shall not be granted where such cultivation obstructs the flow of water or increase flood levels so as to cause damage to other areas.

Article 57.   Any person may erect levees or revetments to protect his property from flood, encroachment by the river or change in the course of the river, provided that such construction does not cause damage to the property of another.

Article 58.  When a river or stream suddenly changes its course to traverse private lands, the owners of the affected lands may not compel the government to restore the river to its former bed; nor can they restrain the government from taking steps to revert the river or stream to its former course. The owners of the land thus affected are not entitled to compensation for any damage sustained thereby. However, the  former  owners of  the new bed shall be the owners of the abandoned bed in proportion to the area lost by each.
 
The owners of the affected lands may undertake to return the river or stream to its old bed at their own expense; Provided, That a permit therefore is secured from the Secretary of Public Works, Transportation and Communication and work pertaining thereto are commenced within two years from the change in the course of the river or stream.

Article 59.  Rivers, lakes and lagoons may, upon the recommend- dation of the Philippine Coast Guard, be declared navigable either in whole or in part.

Article 60.   The rafting of logs and other objects on rivers and lakes which are floatable may be controlled or prohibited during designated seasons of the year with due regard to the needs of irrigation and domestic water supply and other uses of water.

Article 61.  The impounding of water in ponds or reservoirs my be prohibited by the Council upon consultation with the Department of Health if it is dangerous to public health, or it may order that such pond or reservoir be drained if such is necessary for the protection of public health.

Article 62.  Waters of a stream may be stored in a reservoir by a permittee in such amounts as will not prejudice the right of any permittee downstream. Whatsoever operates the reservoir shall, when required, release water for minimum stream flow.

All reservoir operations shall be subject to rules and regulations issued by the Council or any proper government agency.

Article 63.  The operator of a dam for the storage of water may be required to employ an engineer processing qualifications prescribed for the proper operation, maintenance and administration of dam.

Article 64.   The Council shall approve the manner, location, depth and    spacing  in  which   borings  for   subterranean   or groundwater may be made, determine the requirements for the registration of every boring or alteration to existing borings as well as other control measures for the exploitation of subterranean or groundwater resources, and  in  coordination  with  the  Professional  Regulation
 
Commission,  prescribe the  qualifications  of those  who would drill such borings.

No person shall drill a well without permission from the
Council.

Article 65.   Water from one river basin may be transferred to another river    basin   only   with   approval   of   the   Council.   In considering  any  request  of  such  transfer,  the  Council shall take into account the full costs of the transfer, the benefits that would accrue to the basin of origin without the transfer, the benefits would accrue to the receiving basin on account of the transfer, alternative schemes for supplying water to the receiving basin, and other relevant factors.
 
CHAPTER VI
CONSERVATION AND PROTECTION OF WATERS AND WATERSHED AND RELATED LAND RESOURCES



Article 66. After due notice and hearing when warranted by circumstance, minimum stream flows for rivers and streams and minimum water levels for lakes may be established by the Council under such conditions as may be  necessary  for  the  protection  of  the  environment, control    of   pollution,   navigation,   prevention   of   salt drainage, and general public use.

Article 67.    Any watershed or any area of land adjacent to any sur- face water or overlying any groundwater may be declared by the Department of Natural Resources as a protected area. Rules and regulations may be promulgated by such Department to prohibit or control such activities by the owners or occupants thereof within the protected area which may damage or cause the deterioration of the surface    area   or   groundwater   or   interfere   with   the investigation, use, control, protection, management or administration of such waters.

Article 68.    It shall be the duty of any person in control of a well to prevent the water from flowing on the surface of the land, or into any surface water, or any porous stratum underneath the surface without being beneficially used.

Article 69.   It  shall  be  the  duty  of any person in control of a well containing water with minerals or other substances injurious to man, animals, agriculture, and vegetation to prevent such waters from flowing on the surface of the land or any surface water or into any aquifer or porous stratum.

Article 70.    No person shall utilize an existing well or pond or spread waters    for   recharging   subterranean   or   groundwater supplies without prior permission of the Council.

Article 71. To promote better water conservation and usage for irrigation purposes, the merger of irrigation associations and the appropriation of waters by associations instead of by individuals shall be encouraged.
 
No water permit shall be granted to an individual when his water requirement can be supplied through an irrigation association.

Article 72.    In the consideration of a proposed water resource project, due regard shall be given to ecological changes resulting from the construction of the project in order to balance the needs of development and the protection of the environment.

Article 73.   The conservation of fish and wildlife shall receive proper consideration    and   shall   be   coordinated   with   other features of water resources development programs to ensure    that   fish   and   wildlife   values   receive   equal attention with other project purposes.

Article 74.    Swamps and marshes which are owned by the State and which have primary value for waterfowl propagation or other wildlife purposes may be reserved and protected from drainage operation and development.

Article  75.    No  person  shall,  without  prior  permission  from  the National  Pollution Control Commission, build any works that may produce dangerous or noxious substances or perform any act which may result in the introduction of sewage, industrial waste, or any pollutant into any source of water supply.

Water pollution is the impairment of the quality of water beyond a certain standard. This standard may vary according to the use of the water and shall be set by the National Pollution Control Commission.

Article  76.  The  establishment  of  cemeteries  and  waste  disposal areas that may affect the source of a water supply or a reservoir for domestic or municipal use shall be subject to the rules and regulations promulgated by the Department of Health.

Article  77.  Tailings  from  mining  operations  and  sediments  from placer mining shall not be dumped into rivers and waterways  without  prior  permission  from  the  Council upon recommendation by the National Pollution Control Commission.
 
Article 78.   The application of agricultural fertilizers and pesticides may be prohibited or regulated by the National Pollution Control Commission in areas where such application may cause pollution of a source of water supply.
 
CHAPTER VII
ADMINISTRATION OF WATERS AND ENFORCEMENT OF THE PROVISIONS OF THE CODE



Article 79.    The Administration and enforcement of the provisions of this Code, including the granting of permits and the imposition    of   penalties   for   administrative   violations hereof, are hereby vested in the Council, and except in regard to those functions which under this Code are specifically     conferred   upon   other   agencies   of   the government, the Council is hereby empowered to make all decisions and determinations provided in this Code.

Article 80.    The Council may deputized any official or agency of the government to perform any of its specific functions or activities.

Article 81.    The Council shall provide a continuing program for data collection, research and manpower development needed for    the      appropriation,      utilization,      exploitation, conservation and protection of the water resources of the country.

Article 82.    In the implementation of the provisions of this Code, the Council    shall   promulgate   the   necessary   rules   and regulations which may provide penalties consisting of a fine not exceeding One Thousand Pesos (P1,000.00) and/or suspension or revocation of the water permit or the right to the use of water. Violations of such rules and regulations may be administratively dealt with by the Council.

Such rules and regulations shall take effect fifteen (15) days after publication in newspapers of general circulation.

Rules and regulations prescribed by any government agency that pertain to the utilization, exploitation, development, control, conservation or protection of water resources shall, if the Council so requires, be subject to its approval.

Article 83.  The Council is hereby authorized to impose and collect reasonable    fees,    charges    for    water    resources
 
development from water appropriators, except when it is purely domestic purpose.

Article 84.   The Council and other agencies authorized to enforce this Code are empowered to enter upon private lands, with previous    notice   to   the   owner,   for   the   purpose   of conducting surveys and hydrologic investigations and to perform such other acts as are necessary in carrying out their functions including the power to exercise the right of eminent domain.

Article   85.   No  program   or   project   involving   the   appropriation, utilization,    exploitation,       development,       control, conservation, or protection of water resources may be undertaken without prior approval of the Council, except those which the Council may, in its discretion, exempt.

The Council may require consultation with the public prior to the implementation of certain water resources development projects.

Article 86.   When plans and specifications of a hydraulic structure are submitted for approval, the government agency whose functions embrace the type of project for which the structure    is   intended,   shall   review   the   plans   and specifications and recommend to the Council proper action thereon and the latter shall approve the same only when they are in conformity with the requirements of this Code and the rules and regulations promulgated by the Council. Notwithstanding such approval, neither the engineer who drew up the plans and specifications of the hydraulic structure, nor the constructor who built it, shall be relieved of his liability for damages in case of failure therefore by reason of defect in plans and specifications, or failure due to defect in construction, within ten (10) years from the completion of the structure.

Any action to recover such damages must be brought within five (5) years following such failure.

Article 87.  The Council or its duly authorized representatives, in the exercise of its power to investigate and decide cases brought to its cognizance shall have the power to administer oaths, compel the attendance of witnesses by subpoena and the production of relevant documents by subpoena duces tecum.
 

Non-compliance or violation of such orders or subpoena and  subpoena  duces  tecum  shall  be  punished  in  the same manner as indirect contempt of an inferior court upon application by the aggrieved party with the proper Court of First Instance in accordance with the provisions of Rule 721 of the Rules of Court.

Article  88.  The  Council  shall  have  original  jurisdiction  over  all disputes  relating to appropriation, utilization, exploitation, development, control, conservation and protection of waters within the meaning and context of the provisions of this Code.

The  decisions  of  the  Council  on  water  rights controversies shall be immediately executory and enforcement  thereof  may  be  suspended  only  when  a bond in an amount fixed by the Council to answer for damages occasioned by the suspension or stay of execution shall have been filed by the appealing party, unless the suspension is by virtue of an order of a competent court.

All disputes shall be decided within sixty (60) days after the parties submit the same for decision or resolution.

The Council shall have the power to issue writs of execution and enforce its decisions with the assistance of local or national police agencies.

Article 89.   The decisions of the Council on water rights controversies may be appealed to the Court of First Instance of the province where the subject matter of the controversy is situated within fifteen (15) days from the date the party appealing receives a copy of the decision, on any of the following    grounds:   (1)   grave   abuse   of   discretion; (2) question of law; and (3) questions of fact and law.
 
CHAPTER VIII PENAL PROVISIONS

Article 90.  The following acts shall be penalized by suspension or revocation of the violator’s water permit or other right to the use of water and/or a fine of not exceeding One Thousand Pesos (P1,000.00), in the discretion of the Council:

a. Appropriation of subterranean or groundwater for domestic use by an overlying landowner without registration required by the Council.
b.  Non-observance of any standard of beneficial use of water.
c.  Failure of the appropriator to keep a record of water withdrawal, when required.
d.  Failure to comply with any of the terms or conditions in a water permit or a water rights grant.
e.  Unauthorized use of water for a purpose other than that for which a right or permit was granted.
f.    Construction  or  repair  of  any  hydraulic  work  or structure    without    duly    approved    plans    and specifications, when required.
g.  Failure to install a regulating and measuring device for the control of the volume of water appropriated, when required.
h.  Unauthorized sale, lease, or transfer of water and/or water rights.
i.    Failure  to  provide  adequate  facilities  to  prevent  or control diseases when required by the Council in the construction of any work for the storage, diversion, distribution and utilization of water.
j.    Drilling of a well without permission of the Council.
k.  Utilization of an existing well or ponding or spreading of water for recharging subterranean or groundwater supplies without permission of the Council.
l.    Violation of or non-compliance with any order, rule, or regulation of the Council.
m. Illegal taking or diversion of water in an open canal, aqueduct or reservoir.
n.  Malicious destruction of hydraulic works or structures valued at not exceeding P5,000.00.

Article 91.   A fine not exceeding Three Thousand Pesos (P3,000.00) or imprisonment for not more than three (3) years, or both such fine and imprisonment, in the discretion of the
 
Court, shall be imposed upon any person who commits any of the following acts:

1.  Appropriation of water without a water permit, unless such person is expressly exempted from securing a permit by the provisions of this Code.
2.  Unauthorized obstruction of an irrigation canal.
3.  Cultivation of a river bed, sand bar or tidal flat without permission.
4. Malicious destruction of hydraulic works or structure valued  at  not  exceeding  Twenty  Five  Thousand Pesos (P25,000.00).

B.    A fine exceeding Three Thousand Pesos (P3,000.00) but not more than Six Thousand Pesos (P6,000.00) or imprisonment  exceeding three  (3)  years  but  not  more than six (6) years, or both such fine and imprisonment in the discretion of the Court, shall be imposed on any person who commits any of the following acts:

1. Distribution for public consumption of waste water which adversely affects the health and safety of the public.
2. Excavation or enlargement of the opening of a hot spring without permission.
3. Unauthorized obstruction of a river or waterway, or occupancy of a river bank or seashore without permission.
4.  Establishment of a cemetery or a waste disposal area near  a  source  of  water  supply  or  reservoir  for domestic or municipal use without permission.
5. Constructing,  without  prior  permission  of  the government agency concerned, works that produce dangerous or noxious substance, or performing acts that result in the introduction of sewage, industrial waste,  or  any  substance  that  pollutes  a  source  of water supply.
6. Dumping mine tailings and sediments into rivers or waterways without permission.
7. Malicious destruction of hydraulic works or structure valued    more   than  Twenty-Five  Thousand  Pesos (P25,000.00)    but   not   exceeding   One   Hundred Thousand Pesos (P100,000.00)

C.        A fine exceeding Six Thousand Pesos  (P6,000.00)  but not    more than Ten Thousand Pesos  (P10,000.00) or
 
imprisonment exceeding six (6) years but not more than twelve (12) years, or both such fine and imprisonment, in the discretion of the Court, shall be imposed upon any person who commits any of the following acts:

1.  Misrepresentation of citizenship in order to qualify for water permit.
2. Malicious  destruction  of  a  hydraulic  works  or structure,    valued   at   more   than   One   Hundred Thousand Pesos 9P100,000.00).

Article 92.  If the offense is committed by a corporation, trust, firm, partnership, association or any other juridical person, the penalty shall be imposed upon the President, General Manager, and other guilty officer or officers of such corporation, trust firm, partnership association or entity, without prejudice to the filing of a civil action against said juridical person. If the offender is an alien, he shall be deported after serving his sentence, without further proceedings.

After final judgment of conviction, the Court upon petition of the prosecuting attorney in the same proceedings, and after due hearing, may, when the public interest so requires, order the suspension or dissolution of such corporation,  trust, firm,  partnership, association  or juridical person.

Article 93.    All actions for offenses punishable under Article 91 of this
Code shall be brought before the proper court.

Article 94.    Actions for offenses punishable under this Code by a fine of not more than Three Thousand Pesos (P3,000.00) or by an imprisonment of not more than three (3) years, or both such fine and imprisonment, shall prescribe in five (5) years; those punishable by a fine exceeding Three Thousand Pesos (P3,000.00) but not more than Six Thousand    Pesos   (P6,000.00)   or   an   imprisonment exceeding three (3) years but not more than six (6) years, or both such fine and imprisonment, shall prescribe in seven        (7)   years;   and   those   punishable   by   a   fine exceeding Six Thousand Pesos (P6,000.00) but not more than    Ten    Thousand    Pesos    (P10,000.00)    or    an imprisonment exceeding six (6) years but not more than twelve (12) years, or both such fine and imprisonment, shall prescribed in ten (10) years.
 
CHAPTER IX TRANSITORY AND FINAL PROVISIONS



Article 95.    Within two (2) years from the promulgation of this Code, all claims for a right to use water exiting on or before December 3, 1974 shall be registered with the Council which shall confirm said rights in accordance with the provisions of this Code, and shall set their respective priorities.

When priority in time of appropriation from a certain source of supply cannot be determined, the order of preference in the use of the waters shall be as follows:

a.  Domestic and municipal use b.  Irrigation
c.  Power generation d.  Fisheries
e.  Livestock raising
f.    Industrial use, and g.  Other uses.

Any claim not registered within said period shall be considered waived and the use of water deemed abandoned, and the water shall thereupon be available for disposition as unappropriated waters in accordance with the provisions of this Code.

Article 96.    No vested or acquired right to the use of the water can arise from acts or omissions which are against the law or which infringe upon the rights of others.

Article 97.    Acts and contracts under the regime of old laws, if they are valid in accordance therewith, shall be respected, subject to the limitations established in this Code. Any modification  or  extension  of  these  acts  and  contracts after the promulgation of this Code, shall be subject to the provisions hereof.

Article 98.   Interim rules and regulations promulgated by the Council shall continue to have binding force and effect, when not in conflict with the provisions of this Code.

Article 99.  If any provision or part of this Code, or the application thereof  to  any  person  or  circumstance,  is  declared
 
unconstitutional  or  invalid  for  any  reason,  the  other provisions or parts therein shall not be affected.

Article 100. The following laws, parts and/or provisions of laws are hereby repealed:

a.  The  provisions  of  the  Spanish  Law  on  Waters  of August 3, 1866, the Civil Code of Spain in 1889 and the Civil Code of the Philippines (R.A. 386) on ownership of waters, easements relating to waters, use of public waters and acquisitive prescription on the use of waters, which are inconsistent with the provisions of this Code;
b.  The provisions of R.A. 6395, otherwise known as the Revised Charter of the National Power Corporation, particularly section 3, paragraph (f), and section 12, insofar as they relate to the appropriation of waters and the grant thereof;
c.  The   provisions   of  Act   No.   2152,   as   amended, otherwise known as the Irrigation Act, section 3, paragraph (k) and (m) of P.D. No. 813, R.A. 2056; Section 90, C.A. 137; and
d.  All Decrees, Laws, Acts, parts of Acts, rules of Court, executive    orders,   and   administrative   regulations which    are   contrary   to   or   inconsistent   with   the provisions of this Code.

Article 101.    This Code shall take effect upon its promulgation.



Done in the City of Manila, this 31st day of December, Nineteen
Hundred and Seventy Six.






(Sgd.) FERDINAND E. MARCOS
President




By the President:

(Sgd.) JACOBO C. CLAVE
Presidential Executive Assistant