PRESIDENTIAL DECREE NO. 474

PROVIDING FOR THE REORGANIZATION OF MARITIMEFUNCTIONS IN THE PHILIPPINES, CREATING THE MARITIME
INDUSTRY AUTHORITY, AND FOR OTHER PURPOSES.

WHEREAS, the efficient sea transport of raw materials, products, commodities
and people is vital to the growth of the Philippine economy;
WHEREAS, the functions pertaining to the development and regulation ofshipping enterprises are fragmented among various government agencies, resulting ininadequate and inefficient shipping facilities, dependence on external shipping interests,
maldistribution of commodities, and piece-meal solutions;
WHEREAS, there is imperative need to modernize and expand the Philippine
merchant fleet, and to rationalize and improve their operations in order to make themeffective instruments in promoting domestic production, inter-island and overseas trade,
price stabilization, and employment generation;
WHEREAS, it is urgently necessary to provide a strong organizational frameworkto effect the accelerated and integrated development and effective regulation of shipping
enterprises;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of thePhilippines, by virtue of the powers vested in me by the Constitution, in order to effectthe desired changes and reforms in the social, economic and political structure of oursociety, do hereby decree and order that the following be adopted and made part of thelaws of the land:
Section 1.
Title. Industry Decree of 1974.

This Decree shall be known as the Maritime

Section 2.
Declaration of Policies and Objectives. - It is hereby declared
the policy of the State to accelerate the integrated development of the maritime industryof the Philippines to attain the following objectives: (a) To increase production andproductivity in the various islands and regions of the archipelago through the provisionof effective sea linkage; (b) To provide for the economical, safe, adequate and efficient
shipment of raw materials, products, commodities and people; (c) To enhance thecompetitive position of Philippine flag vessels in the carriage of foreign trade; (d) To
strengthen the balance of payments position by minimizing the outflow of foreignexchange and increasing dollar earnings; (e) To generate new and more job
opportunities.

For the attainment of these objectives, the Government through the Maritime
Industry Authority thereinafter created shall:(a)Adopt and implement a practicable and coordinated Maritime Industry
Development Program which shall include, among others, the early
replacement of obsolescent and uneconomic vessels; modernization andexpansion of the Philippine merchant fleet, enhancement of domestic
capability for shipbuilding, repair and maintenance; and the developmentof reservoir of trained manpower;(b)

Provide and help provide the necessary; (i) financial assistance to theindustry through public and private financing institutions andinstrumentalities; (ii) technological assistance; and (iii) in general, afavorable climate for expansion of domestic and foreign investments inshipping enterprises; and(c)Provide for the effective supervision, regulation and rationalization of theorganizational management, ownership and operations of all watertransport utilities, and other maritime enterprises.

Section 3.
Definition of Terms. The terms, as used, in thisDecree, shall have the following meaning, unless the context of the particular usage ofthe term indicates otherwise:(a)“Maritime Industry”, briefly referred to as “industry” in the broadest
concept of the term. - All enterprises engaged in the business ofdesigning, constructing, manufacturing, acquiring, operating, supplying,repairing and/or maintaining vessels, or component parts thereof; ofmanaging and/or operating shipping lines, stevedoring, arrastre andcustoms brokerage services, shipyards, drydocks, marine railways, marine
repair shops, shipping and freight forwarding agencies and similar
enterprises.

(b)“Vessels” or Watercraft” – Any barge, lighter, bulk carrier, passenger
ship, freighter, tanker, container ship, fishing boats or other artificial
contrivance utilizing any source of motive power, designed, used orcapable of being used as a means of water transportation operating either
as common contract carrier, including fishing vessels covered under
Presidential Decree No. 43, except (i) those owned and/or operated by the
Armed Forces of the Philippines and by foreign governments for militarypurposes, and (ii) bancas, sailboats and other waterborne contrivance ofless than three gross tons capacity and not motorized.
(c)“Philippine national” - A citizen of the Philippines; or a partnership or
association wholly owned by and composed of citizens of the Philippines;
or a corporation organized under the laws of the Philippines of which atleast sixty percent of the capital stock outstanding and entitled to vote isowned and held by Philippines citizens; or a trustee of funds for pensions
or other employee retirement or separation benefits, where the trustee is a
Philippine national and at least sixty percent of the fund will accrue to thebenefit of the Philippine nationals: Provided, That where a corporationand its non-Filipino stockholders own stock in an enterprise, at least sixty
percent of the members of the governing board of both corporations must
be Philippine nationals.

(d)“Philippine flag vessel” - A vessel or watercraft registered underPhilippine laws.

(e)“Foreign flag vessels” - A vessel or watercraft registered under the lawsof a country other that the Philippines.

(f)“Philippine shipping companies” - Philippine nationals registered andlicensed under the laws of the Philippines to engage in the business ofoverseas and/or domestic water transportation.

A.

MARITIME INDUSTRY AUTHORITY

Section 4.
Maritime Industry Authority, Creation and Organization. –There is hereby created a Maritime Industry Authority, hereinafter referred to as the“Authority”, under the Office of the President. It shall be composed of a governing boardof directors to be known as Maritime Industry Board and Management.
The Authority shall have general jurisdiction and control over all persons,corporations, firms or entities in the maritime industry of the Philippines and shallsupervise, regulate in accordance with this Decree.
The principal office of the Authority shall be in the Greater Manila Area.
Regional or Branch offices may be established at such other place or places within thePhilippines as may be deemed necessary by the Board.
Section 5.
Maritime Industry Development Program.
The
Authority shall prepare and annually update a Ten -Year Maritime Industry Development
Program, hereinafter referred to as “Program” which shall contain a rational andintegrated development of the maritime industry. The Authority shall submit the same forapproval by the President of the Philippines.
Upon approval of the Program by the President, all government departments,
bureaus, agencies and instrumentalities shall implement the same within their respective
jurisdictions. The Authority shall ensure that the approved program is being effectively
implemented by the participating agencies. No government body or instrumentality shalladopt any policy or take course of action contrary to or inconsistent with the Program.

B.

MARITIME INDUSTRY BOARD

Section 6.
Powers and Functions of the Board. - The Maritime Industry
Board shall have the following powers, functions and duties, among others:(a)

To provide comprehensive policy guidance for the promotion anddevelopment of the maritime industry as provided for in this Decree;(b)

To promulgate and prescribe such promotional and development rules andregulations, standards, guidelines and procedures and recommend laws or
measures as may be necessary for the growth and effective regulation ofshipping enterprises;(c)

To formulate a comprehensive and practicable Maritime Industry
Development Program for a Ten – Year period and review and update thesame annually;(d)

To prescribe specific policies in the determination of just and reasonablepassenger fees, freight rates and other charges relative to the operation ofinter island vessels. Accordingly, the Board of Transportation shall
exercise its rate fixing functions in accordance with such policies;(e)

To recommend to the President that the State, through such agency oragencies as the President may designate, purchase, lease, manage, operateor requisition any vessel, ship or shipping enterprise, for national security
purposes, to meet emergency situations or when the national interest so
requires;(f)

To approve contracts;(g)

To approve the organizational structure, staffing pattern, and budget of the
Authority upon the recommendation of the Administrator;

(h)To appoint, discipline and remove, and determine the composition of the
Authority technical staff and other personnel: Provided, That all regularprofessional and technical personnel in the Authority shall be permanentand career in status, but exempt from WAPCO and Civil Service rules andregulations: Provided, further, That the personnel shall be entitled to thebenefits normally accorded to government employees, such as retirement,
GSIS insurance, leave and similar matters: Provided, furthermore, Thatappointments of personnel in the management below the rank of Section
chief shall be made by the Administrator, in accordance with theapproved budget and staffing pattern and shall be noted by the Board:
Provided, finally, That the Board of the Administrator may engage on
contractual basis or other arrangements for the temporary services, and fix
the compensation of highly qualified professionals, experts, technicaladvisers or consulting firms;(i)To adopt a common seal for the Authority which shall be juridically
noticed, determine the exact location of its office, and prescribe the rules
and regulations to govern its proceedings;(j)To recommend to the President , through the National Economic andDevelopment Authority, the grant of necessary incentives for thedevelopment of shipping and other related maritime enterprises; and(k)To perform such acts as are proper and necessary to implement thisDecree.

Section 7.
Composition and Organization. - The Board shall be composedof eight members as follows; The Secretary of Trade, the Secretary of Public Works,
Transportation and Communications, the Secretary of National Defense, the Executive
Secretary, the Chairman of the Board of Investments, the Chairman of the Development
Bank of the Philippines, the Chairman of the Board of Transportation and the Maritime
Administrator. The Chairman of the Board shall be appointed by the President of thePhilippines from among its members.
The officials next in rank to the regular members shall serve as permanentalternate members, except that, in the absence of the Chairman, the Board shall elect a
temporary/presiding officer. The alternate members shall attend meetings of the Boardand committee assigned to their principals and receive the corresponding per diems
whenever their principal is absent or the said position is vacant.
The Board shall meet regularly once a month and may hold special meetings to
consider urgent matters upon call of the Chairman or any three members thereof. A
majority shall constitute a quorum for the transaction of business.
Each business shall receive a monthly commutable allowance of five hundred
pesos and per diem of one hundred pesos for every meeting of the board or committeethereof actually attended; Provided, That the total amount of per diems which each may
receive shall not exceed five hundred pesos a month.

C.

MANAGEMENT

Section 8.
Management Head. The management of the Authority
shall be vested in the Maritime Administrator who shall be directly assisted by the
Deputy Administrator for Planning and a Deputy Administrator for Operations
hereinafter referred to as “Deputy Administrators”.
Section 9.
The Maritime Administrator and Deputy Administrators. The Maritime Administrator and Deputy Administrators shall be appointed by the
President for a term of six years: Provided, That upon the expiration of their respective
terms, they shall continue to serve until their successor shall have been appointed andqualified: Provided, further, That no vacancy shall be filled except for the unexpired
portion of the term: Provided, finally, That the President may remove the Administrator
and Deputy Administrators from office for cause upon recommendation of the Board.
The Maritime Administrator and Deputy Administrators shall be citizens of thePhilippines, at least thirty five years old on the date of their appointment, of good moral
character, of recognized executive ability and competence in previous public or private
employment, with adequate training experience in economics, technology, finance, law,
management, public utility, or in other phases or aspects of the maritime industry. Until
otherwise fixed by the Board, the Administrator shall receive an annual salary of fifty
thousand pesos and a monthly commutable allowance of two thousand pesos. Each
Deputy Administrator shall receive an annual salary of forty thousand pesos and amonthly allowance of one thousand five hundred pesos.
The Administrator shall be directly responsible to the Board, and shall havepowers, functions and duties as provided in this Decree. The Deputy Administrator shallbe directly responsible to the Administrator, and their respective powers, functions andduties shall be determined by the Board, upon recommendation of the Administrator.
Section 10.
Authority to Administer Oath. - The Chairman of the Board,
the Administrator , the Deputy Administrators, the Chief Legal Officer and heads ofdivisions of the Authority shall have the power to administer oaths for the transaction of
official business.
Section 11.
General Powers and Functions of the Administrator. - Subject
to the general supervision and control of the Board, the Administrator shall have thefollowing general powers, function and duties:

(a)To implement, enforce and apply the policies, programs, standards,
guidelines, procedures, decisions and rules and regulations issued,prescribed or adopted by the Board pursuant to this Decree;(b)

To undertake researches, studies, investigations and other activities andprojects, on his own initiative or upon instructions of the Board, and to
submit comprehensive reports and appropriate recommendations to theBoard for its information and action;(c)

To undertake studies to determine present and future requirements for port
development including navigational aids, and improvement of waterways
and navigable waters in consultation with appropriate agencies;(d)To pursue continuing research and developmental programs on expansion
and modernization of the merchant fleet and supporting facilities taking
into consideration the needs of the domestic trade and the need of regional
economic cooperation schemes; and(e)To manage the affairs of the Authority subject to the provisions of thisDecree and applicable laws, orders, rules and regulations of otherappropriate government entities.

Section 12.
Specific Powers and Functions of the Administrator. - In
addition to his general power and functions, the Administrator shall:(a)Issue Certificate of Philippine Registry for all vessels being used in
Philippine waters, including fishing vessels covered by Presidential
Decree No. 43 except transient civilian vessels of foreign registry, vessels
owned and/or operated by the Armed forces of the Philippines or byforeign governments for military purposes, and bancas, sailboats and otherwatercrafts which are not motorized, of less than three gross tons;(b)

Provide a system of assisting various officers, professionals, technicians,
skilled workers and seamen to be gainfully employed in shipping
enterprises, priority being given to cosmetic needs;(c)

In collaboration and coordination with the Department of Labor, to look
into, and promote improvements in the working conditions and terms of
employment of the officers and crew vessels of Philippine registry, and ofsuch officers and crew members who are Philippine citizens and employedby foreign flag vessels, as well as of personnel of other shipping
enterprises, and to assist in the settlement of disputes between the owneror manager of other shipping enterprises and their personnel;(d)

To require any public water transport utility or Philippine flag vessels toprovide shipping services to any coastal areas in the country where suchservices are necessary for the development of the area, to meet emergency
sealift requirements, or when public interest so requires;(e)

Investigate by itself or with the assistance of other appropriate government
agencies or officials, or experts from the private sector, any matter within
its jurisdiction, except marine casualties or accidents which shall be
undertaken by the Philippine Coast Guard;(f)

Impose, fix, collect and receive in accordance with the schedules approvedby the Board, from any shipping enterprise or other persons concerned,
such fees and other charges for the payment of its service;(g)

Inspect, at least annually, the facilities of port and cargo operators andrecommend measures for adherence to prescribed standards of safety,
quality and operations;(h)Approve the sale, lease or transfer of management of vessels owned byPhilippine Nationals to foreign owned or controlled enterprises;(i)

Prescribe and enforce rules and regulations for the prevention of marine
pollution in bays, harbors and other navigable waters of the Philippines, incoordination with the government authorities concerned;(j)Establish and maintain, in coordination with the appropriate government
offices and agencies, a system of regularly and promptly producing,collating, analyzing and disseminating traffic flows, port operations,marine insurance services and other information on maritime matters;(k)

Recommend such measures as may be necessary for the regulation of theimportation into and exportation from the Philippines of vessels, theirequipment and spare parts;(l)Implement
the rules and regulations issued byTransportation;(m)Compile and codify all maritime laws, orders rules and regulations,decisions in leading cases of courts and the Authority’s procedures andother requirements relative to shipping and other shipping enterprises,
make them available to the public and, and whenever practicable topublish such materials;(n)Delegate his powers in writing to either of the Deputy Administrators or
any other ranking official of the Authority: Provided, That he informs theBoard of such delegation promptly; andthe Board of(o)Perform such other duties as the Board may assign, and such acts as thecase may be necessary and proper to implement this Decree.

Section 13.
Maritime Industry Manpower Needs.
The
Authority
shall establish and support a system of maintaining and developing a reservoir of trained
manpower to meet the current and future needs of the industry. For the attainment of thisobjective, it shall undertake the following:(a)

Evaluate, in collaboration with the Department of Education and Culture,
the capability of maritime educational and training institutions andprograms in the Philippines, including the Philippine Merchant Marine
Academy, herein placed under the administrative supervision of the
Authority, to supply shipping and shipyard manpower needs.

(b)Inspect and evaluate periodically the standards, facilities and performanceof the maritime educational and training programs of government andprivate schools and enterprises and recommend to the Department of
Education and Culture and other appropriate government agencies suchchanges in the curriculum as may be necessary.

(c)

Conduct or arrange for the holding of pre-employment, on-the-job andother training programs to provide and upgrade shipping skills andtechniques, with the cooperation and support of private enterprises andgovernment agencies.

(d)Provide incentives for education and training in shipping and shipbuilding
fields, especially those which are not attractive to students as naval
architecture, including scholarships and fellowships, in the Philippines orabroad with liberal grants for the entire duration of the course, to besponsored directly or arranged by the Administration.

Section 14.
Penalties.
Any person who gives false or misleading date or
information or willfully or through gross negligence, conceals, or falsifies a material
fact, in any investigation, inquiry or hearing, or other proceedings held pursuant to thisDecree, shall be punished with imprisonment of not less than two or more than six
months and with a fine of not less than five hundred nor the false or misleading date or
information shall have been given under oath, the maximum penalty for giving false
testimony or perjury shall be imposed.

D.

MISCELLANEOUS PROVISIONS

Section 15.
Auditor.
The Commission on Audit shall be the exofficio Auditor of the Authority and it shall appoint its representative therein, who shallaudit the accounts thereof.
Section 16.

Reorganizational Changes.

(a)Department of Trade. The shipping and Freight Study Unit of the
Department of Trade is hereby transferred to the Authority together with
its applicable appropriations, records, equipment, property and such
personnel as may be necessary.

(b)

Bureau of Transportation.
the powers and functions pertaining
to the development and supervision of maritime shipping of the Bureau ofTransportation for Water are hereby transferred to the Authority.
Accordingly the Water Transportation Division of the Bureau is hereby
abolished.

(c)

National Development Company.
The powers and functions of
the National Development Company relative to ship acquisition underRepublic Act No. 1407, as amended, (Philippine Overseas Act of 1995)
are hereby transferred to the Authority together with its applicable
records, equipment and property.
In addition to the powers and functions herein transferred, balances of all
appropriations, funds, accounts and notes receivables derived fromshipping companies, equipment, records and supplies are likewisetransferred to the Authority.

Section 17.
Retention of the Functions and Powers of the Philippine Coast
Guard. Nothing in this Decree shall be constructed to affect or delimit the present
functions and powers of the Philippine Coast Guard relative to maritime affairs. All suchfunctions and powers of the Philippine Coast Guard are retained by it. Furthermore in theperformance of its functions, especially in the classification and inspection of vessels, thePhilippine Coast Guard will assisted by the Authority. Provided, That within two years
from the issuance of this Decree, the President may transfer to the authority such
regulatory maritime affairs as may be necessary for the achievement of the aims andpurposes of the Authority. The Authority shall coordinate with the Philippine Coast guard
in the exercise of supervision and regulation of the operations of water transport utilities.
Section 18. Coordination with other Agencies. The Authority shallcoordinate with the Department of Labor, the Department of Education and Culture andthe National Manpower and youth Council in the exercise of its pertinent functions that

have relation to the functions of the above-mentioned agencies, particularly as thesepertain to the development of trained and qualified seamen for Philippine vessels.
In order to strengthen its coordinative functions, the Authority shall hire and train
appropriate technical personnel which may be assigned to other government agencies
involved in the implementation of laws, rules and regulations relative to maritime affairs.
Section 19.
Transitory Provision.
Officials and employees ofall existing offices or agencies which are abolished or reorganized under this Decree may
be absorbed into the Authority on the basis of merit and fitness; Provided, That
employees who shall be laid off by reason of this Decree shall be given gratuity
equivalent to one month’s salary, in addition to all benefits to which they are entitledunder existing laws and regulations.
To carry out provisions of this Section there is hereby appropriated the sum ofFive-Hundred Thousand Pesos out of the unappropriated funds in the National Treasury.
Section 20.
Appropriations.
To carry out the provisions of thisDecree, there is hereby appropriated the sum of two million pesos out of the funds in the
National Treasury not otherwise appropriated. Thereafter, the succeeding appropriationsof the Authority shall be included in the Annual Appropriations Act.
In addition to the above, the Authority is hereby authorized to retain fifty per centof its collection from fees, charges and fines to defray any deficiency in annual
appropriations and to finance its other projects.
Section 21.
Repealing and Separability Clauses.
All
laws,
decrees, orders, rules and regulation, policies, programs or parts thereof, which areinconsistent with any of the provisions of this Decree, are hereby repealed or modified
accordingly.
If for any reason any section of provision of this Decree is declared to beunconstitutional or invalid, the other sections or provision hereof, which are not affected
hereby, shall continue in full force and effect.
Section 22.
Effectivity. This Decree shall take effect upon its
promulgation: Provided, That these portions hereof which may require a transition
period to assure the orderly transfer of powers and functions shall take effect as stated in
the implementing details; Provided, further, That such implementing details shall be
prepared by the Board, in consultation with the government agency heads concerned, andsubmitted to the President for approval within four months after issuance of this Decree.
Done in the city of Manila, this 1st day of June, in the year of our Lord, nineteen
hundred and seventy-four.