DUSE Y PEPRESENTATIES:

Republic of the Philippines
HOUSE OF REPRESENTATIV!
Quezon City, Metro Manila

IS REGISTRATION UST
BILLS AND INDEX SERViCE |

Seventeenth Congress

First Regular Session

HOUSE BILL NO, 239

Introduced by Honorable Rodante D. Marcoleta

EXPLANATORY NOTE
Atticle Il, Section 16 of the 1987 Constitution provides:
“The State shall protect and advance the right of the people to a

balanced and healthful ecology in accord with the rhythm and
harmony of nature.

Despite existing laws that protect the environment, there are still

lapses in implementing the lawful right to a healthy and balanced ecology.

There have been many instances of man-made environmental

damages like the 1996 Mareopper Mining tragedy in Marinduque which led

to the biological death of the Boac and Makalupnit rivers, destroyed hectares

of farmlands and displaced families. The 2005 and 2007 massive fish kills in
Rapu-Rapu, Albay caused by cyanide spills from the mining operations of

Lafayette, Philippines, Inc. also caused severe damaged to the community.


In 2013, a tragedy between 2GO Group Incorporation and Philippine
Span Asia Carrier Corporation ships claimed twenty-four (24) lives and
imperiled the Cardova marine environment in Talisay, Cebu. One of the
sunken ships was loaded with 120,000 liters of Bunker oil, 20,000 liters of
Lube oil and 20,000 liters of Diesel fuel. Days after the collision, oils from
wrecked and sunken ships had reached five (5) barangays of Cardova town.
The marine ecosystem of the concerned areas was affected causing the
residents to lose their livelihoods. Nevertheless, even with these
environmental disasters, there still no policy to ensure sufficient financial

coverage for communities affected by man-made disasters.

This bill seeks to require mandatory environmental insurance
coverage for owners and operators of environmentally-critical businesses
which activities destroy or pose risks to the environment, the ecosystems and
their constituent elements. The said insurance will be used to guarantee
sufficient funding coverage for the needed restoration and compensate for

damages caused by their operations.

In view of the foregoing, approval of this bill is highly and earnestly
recommended,



Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City, Metro Manila

Seventeenth Congress
First Regular Session

HOUSE BILL NO, 209

Introduced by Honorable Rodante D, Marcoleta

AN ACT
REQUIR MANDATORY ENVIRONMENT INSURANCE
COVERAGE TO PROMOTE ECOLOGICAL PROTECTION FOR
ENVIRONMENTALLY-CRITICAL BUSINESSES

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

SECTION |. Mandatory Environment Insurance Coverage. — All
owners and operators of environmentally-critical businesses shall be
required to secure a Mandatory Environmental Insurance Coverage (MEIC)
to compensate for damages to health and property, environmental
rehabilitation, remediation and clean-up costs and expenses as a result of |
environmental impairment arising from their operations and to guarantee

sufficient financial coverage needed for the restoration and/or reversal of

said damages.


For purposes of this Act, environmentally-critical businesses refer to
commercial and industrial establishments and enterprises, among others, that
could pose serious risks to people and the environment with the potential to
pollute air, water and soil, and that range of activities that impact on the
atmosphere.

SEC. 2. Forms of Mandatory Environment Insurance Coverage. —
The Mandatory Environment Insurance Coverage shall be obtained only
from bonding or insurance companies duly accredited by the Department of
Environment and Natural Resources (DENR) in the following forms:

a) Environmental Performance Bond — which shall be required for
all ongoing activities or projects and applications for Environmental
Compliance Certificate or Certificate of Non-coverage to guarantee adequate
and timely compliance with the environmental standards and the terms and
conditions set forth by the DENR during the pre-development, development
and construction phases of the project. The Environmental Performance
Bond shall answer for all environmental damages, penalties and legal
obligations which may arise from the failure of the project proponent to.
comply with its undertakings during the aforementioned phases; and

b) — Environmental Pollution, Impairment and Clean-Up Liability
Insurance — which shall be required for all existing and future activities or

projects to cover operational phases, including those that have been issued


an Environmental Compliance Certificate or Certificate of Non-coverage.
The Environmental Pollution, Impairment and Clean-Up Liability Insurance
shall answer for all claims arising from damages to the environment, bodily
injury, and property damage arising from a pollution event including
environmental rehabilitation, clean-up or remediation costs and expenses for
contamination or impairment of the environment.

The DENR shall determine which businesses or industries shall be
classified as environmentally-critical and shall be required to obtain an
Environmental Performance Bond or an Environmental Pollution,
Impairment and Clean-Up Liability Insurance.

SE

3 Pre-requisite for the Issuance of Environmental
Compliance Certificate or Certificate of Non-coverage. ~ Owners and
operators of environmentally-critical businesses shall not be issued an
Environmental Compliance Certificate or Certificate of Non-coverage by the
DENR without first obtaining the Mandatory Environment Insurance

Coverage required by this Act.

SEC. 4. E

vironmental Risk Inspector. — During the insurance

coverage period, an environmental risk inspector from the DENR shall
conduct quarterly, bi-annual or annual visits to the business firms’ project to

evaluate and recommend measures to prevent environmental disasters


SEC. 5. Beneficiaries. The beneficiaries of the Mandatory
Environment Insurance Coverage include affected communities,
stakeholders and iocal government units within the projects’ primary impact
areas. Beneficiaries also include government departments, bureaus and
agencies which are tasked under law to undertake the rehabilitation, clean-up
and monitoring of the projects affected by the pollution event for which no
responsible private or public entity is specified.

‘The beneficiaries shall be represented by the government, particularly
the DENR, which shall identify the affected areas and prescribe

rehabilitation or remediation measures.

SEC. 6. Payment of Claims. — The insurance company shall place all
payments of claims into special escrow accounts in government depository
banks which shall in turn disburse corresponding payments to beneficiaries
only upon the advice of the Environmental Management Bureau of the
DENR (EMB-DENR) after proper documentation.

The EMB-DENR may create a multi-sectoral body composed of
representatives from the business, labor, government, civil society and other.
stakeholders to assure that claims are verified and rightful parties are
compensated and the environment is properly rehabilitated, cleaned-up,

remediated, stabilized and protected.


The EMB-DENR shall not receive and handle payments of claims for
environmental damages, penalties and charges, except for the claim
component which properly accrues to it as an insurance beneficiary.

The government agency tasked with rehabilitation and beneficiary of
the Mandatory Environmental Insurance Coverage as provided under
Section 5 of this Act shall undertake the same with funds coming from the
insurance claim upon recommendation of the EMB-DENR or the multi-
sectoral body created by EMB-DENR and approved by the Secretary of
Environment and Natural Resources.

SEC. 7. Penalties. The failure of the owner and operator of
environmentally-critical businesses to take out Mandatory Environment
Insurance Coverage in violation of this Act shall be punished with a fine of
five hundred thousand pesos (P500,000.00) but not more than two million
pesos (P2,000,000.00) or imprisonment of not less than six (6) years but not
more than twelve (12) years, or both, at the discretion of the court

In the case of partnership, association, corporation or any juridical
entity, the fine shall be imposed upon the president, treasurer or any other .
officer or person responsible for the violation.

If the offender is a foreigner, the offender shall be deported
immediately without further proceedings in the Bureau of Immigration after

the service of sentence


Government officials, employees and agents who shall approved the
issuance of certificates to owners or operators of environmentally-critical
businesses without the necessary Mandatory Environmental Insurance
Coverage, in violation of this Act, shall suffer the penalty of suspension of
not less than thirty (30) days but not more than six (6) months after due
notice and hearing in the appropriate administrative proceedings.

SEC. 8. Implementing Rules and Regulations. — Within sixty (60)
days from the approval of this Act, the Secretary of Environment and

Natural Resources shall, in coordination with the Commissioner of the

Insurance Commission, promulgate the necessary rules and regulations for
the effective implementation of this Act.

SEC. 9. Repealing Clause. — All laws, decrees, orders, rules and
regulations, and other issuances inconsistent with the provisions of this Act
are repealed, amended or modified accordingly.

SEC. 10. Effectivity. -This Act shall take effect fifteen days from the

date of its publication in two (2) newspapers of general circulation.

Approved,