EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHIUPPINES 
Third Regular Session
)
SENATE
S. B. No. 2358
*21 AUG 23 P2:27
IT-"
INTRODUCED BY SENATOR CHRISTOPHER LAWRENCE "BONG" T. GO
AN ACT
ESTABLISHING A NATIONAL FRAMEWORK FOR THE MANDATORY 
ENVIRONMENTAL INSURANCE COVERAGE OF ENVIRONMENTALLY CRITICAL 
PROJECTS
EXPLANATORY NOTE
The 1987 Philippine Constitution mandates the State to "protect and advance the 
right of the people to a balance and healthful ecology In accord with the rhythm and 
harmony of nature." Indeed, it is the duty of the State to uphold the quality of life of its 
people through the protection of the environment they live in.
However, over the years, the responsibility of man to take care of its only home 
seems to be overlooked, especially in the wake of the blinding pace of modern 
industrialization. This has led to almost irreparable damage to the environment, seriously 
jeopardizing future generations. The Philippines is no exception to this high cost.
The world is evolving, and so must our country. While we cannot stop the 
advancement of industrialization, we cannot sacrifice our environment at the altar of 
modernization. In addition to ensuring that our projects are environmentally-friendly as 
far as practicable, we should also ensure that we have the means to recover if these 
projects inevitably damage the environment.


This bill seeks to establish a National Framework for Mandatory Environmental 
Insurance Coverage which shall guarantee sufficient funding coverage for the needed 
restoration and compensation for damages on the environment caused by owners and 
operators of environmentally-critical projects which activities have the potential to harm 
the environment and everything that depends on it.
In view of the foregoing, approval of this bill is earnestly sought.
SENATOR CHRISTOPHER LAWRENCE "BONG" T. GO


EIGHTEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHILIPPINES 
)
Third Regular Session 
)
SENA 
S. B. NoNA?358
71 AUG 23 P2 77
INTRODUCED BY SENATOR CHRISTOPHER LAWRENCE "BONG" T. GO
AN ACT
ESTABLISHING A NATIONAL FRAMEWORK FOR THE MANDATORY 
ENVIRONMENTAL INSURANCE COVERAGE OF ENVIRONMENTALLY CRITICAL 
PROJECTS
Be it enacted by the Senate and the House of Representatives of the Phiiippines 
in Congress assembled:
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SECTION 1. Title. — This Act shall be known as the "Mandatory Environmental
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Insurance Coverage Act."
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SEC. 2. Defminition of Terms. — As used in this Act:
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a) Environmentally Critical Project refers to a project that has high potential 
for significant negative environmental impact and is listed as such under 
Presidential Proclamation (P.P.) No. 2146, series of 1981, and P.P. No. 803, 
series of 1996, as well as other projects which the President may proclaim 
as environmentally critical in accordance with Section 4 of P.D. 1586 or the 
Philippine Environmental Impact Statement System;
b) Heavy industries refer to non-ferrous metal industries, iron and steel mills, 
petroleum, and petrochemical industries, including oil and gas smelting 
plants;
c) Infrastructure projects refer to major dams, major power plants, major 
reclamation projects, and major roads and bridges; and.
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d) Resource Extractive Industries to major mining and quarrying


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projects; forestry projects involving logging, major wood processing 
projects, introduction of fauna or exotic animals in public or private 
forests, forest occupancy, extraction of mangrove products, and grazing; 
and fishery projects, specifically fishpond development projects and dikes 
for such projects.
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SEC. 3. Establishment of a National Framework for Mandatory
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Environmental Insurance Coverage. - Within one (1) year following the effectivity of
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this Act, a national framework for Mandatory Environmental Insurance Coverage (MEIC)
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shall be established. The framework shall consider the following:
a) 
Coverage. All owners and operators of environmentally critical projects 
(ECPs) shall be required to secure MEIC for ECPs as prescribed under this 
Section, to compensate for the adverse environmental consequences which 
include damage to health and property, and costs for environmental 
rehabilitation, remediation, cleanup, and other environmental impairments 
arising from their operations. For purposes of this Act, ECPs shall include heavy 
industries, major manufacturing industries, major resource-extractive 
industries, major infrastructure projects, and other similar projects that could
' pose serious risks to people and the environment.
b) 
Forms of MEIC. - The MEIC shall be in the form of:
1 1. Environmental guarantee cash fund established pursuant to existing 
environmental laws; or
2. Environmental insurance policy (EIP) obtained from bonding or insurance 
companies, whenever the environmental guarantee cash fund is 
insufficient to cover the said adverse environmental consequences, upon 
determination and recommendation of the Inter-Agency Technical 
Committee created pursuant to Section 5 of this Act.
The EIP may take the form of the following:
i. Environment performance bond (EPB) - which shall be required for all
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ongoing activities or projects issued with Environmental Compliance 
Certificate (ECC) pursuant to P.D. 1586, to guarantee adequate and 
timely compliance with the environmental standards and the terms 
and conditions set forth by the Department of Environment and 
Natural Resources (DENR) during the pre-development, 
development, and construction phases of the project. The EPB 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
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ii. Environment pollution, impairment, and cleanup liability insurance 
(EPICLI) - which shall be required for all existing and future activities 
or projects issued with ECC pursuant to P.D. 1586, to cover the 
operational phases. The EPICLI shall answer for all claims arising 
from damages to the environment; bodily injury and property 
damage arising from a pollution event; and for the cost of 
environmental rehabilitation, cleanup, or remediation responses to 
address the contamination or impairment of the environment.
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SEC. 4. Pre-requisite To The Construction Or Operationai Phase. - Owners
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and operators of ECPs shall not be allowed to commence construction or commercial
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operation without initially obtaining the MEIC required under Section 3 of this Act.
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SEC. 5. Creation of an Inter-Agency Technicai Committee. - Within one (1)
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year following the effectivity of this Act, the Secretary of the DENR shall establish and
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chair an Inter-Agency Committee (lATC), with the Commissioner of the Insurance
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Commission and representatives of the insurance industry, the mining industry, and other
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stakeholders that the DENR may deem fit, as members. Within the same period, the lATC
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shall:
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a) Identify the perils or possible negative environmental impacts, activities, 
processes or undertakings that need to be mandatorily insured as provided in 
Section 3 hereof;
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b)
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covered;
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Act.
Conduct risk assessment to determine the appropriate insurance coverage for 
different ECPs and activities;
Formulate guidelines for the identification of primary impact areas and 
prescription of rehabilitation or remediation measures in cases of 
environmental damages;
Formulate cleanup guidelines;
Formulate guidelines for the identification of beneficiaries of the MEIC;
Ensure that the premium rates of the EIP are commensurate to the risks
Formulate guidelines for the determination of veracity of claims;
Accredit insurance companies; and
Undertake such activities as may be necessary to fulfill the objectives of this
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For purposes of paragraph (h) of this Section, the Insurance Commission, in
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coordination with the DENR, shall formulate guidelines for the accreditation of insurance
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companies, within one (1) year following the effectivity of this Act.
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The beneficiaries shall be represented by the government, particularly the DENR.
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The lATC shall identify the affected areas and prescribe rehabilitation or remediation
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measures pursuant to Sec. 5 of this Act.
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SEC. 6. Beneficiaries. - The beneficiaries of the MEIC include affected
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communities, stakeholders, and local government units within the projects' primary
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impact areas. Also included as beneficiaries are government departments, bureaus, and
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agencies which are tasked under the law to undertake the rehabilitation, cleanup, and
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monitoring of sites affected by the pollution or insurable event, for which no responsible
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private or public entity is specified.
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The beneficiaries shall be represented by the government, particularly the DENR.
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The lATC shall identify the affected areas and prescribe rehabilitation or remediation
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measures pursuant to Sec. 5 of this Act.
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SEC. 7. Payment of Ciaims. - The insurance company shall place all payments of


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claims into special escrow accounts in government depository banks, which shail in turn
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disburse the corresponding payment to beneficiaries, upon advice of the DENR and with
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proper documentation.
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The DENR may create an ad-hoc body composed of representatives from business,
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labor, government, civil society, and other stakeholders to assure that claims are verified
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and rightful parties are compensated and the environment is properly rehabilitated,
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cleaned up, remediated, stabilized, and protected.
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The DENR shall not receive and handle payment of claims for environmental
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damages, penalties, and charges, except for the claims component which properly
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accrues to it as an insurance beneficiary.
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The government agency tasked with rehabiiitation and assigned as the beneficiary
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of the MEIC as provided under Section 6 of this Act, shali undertake the same utilizing
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funds coming from the insurance claim upon approval of the DENR.
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SEC. 8. The failure of the owner and operator of an ECP to secure an MEIC as
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prescribed under Section 3 hereof, or of the insurance company to pay a verified claim in
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violation of the provisions of this Act and within reasonable time, shall be punished with
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a fine of Five hundred thousand pesos (P 500,000.00) but not more than Two million
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pesos (P 2,000,000.00) or imprisonment of not less than six (6) years but not more than
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twelve (12) years, or both, at the discretion of the court.
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In the case of a partnership, association, corporation, or any juridical entity, the fine
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shall be imposed upon the president, treasurer, or any other officer or person responsible
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for the violation.
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If the offender is a foreigner, the offender shall, after the service of sentence, be
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deported immediately without further proceedings by the Bureau of Immigration.
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Government officials, employees, and agents who approve the construction or
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operation of environmentally-critical projects without the necessary MEIC, in violation of
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the provisions of this Act, shali suffer the penalty of suspension of not less than thirty
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(30) days, but not more than six (6) months after due notice and hearing in the


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appropriate administrative proceedings.
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SEC. 9. Implementing Rules and Regulations. - Within sixty (60) days from
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the approval of this Act, the DENR shall, in coordination with the Insurance Commission,
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promulgate the necessary rules and regulations for the effective implementation of this
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Act.
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SEC. 10. Repealing Clause. - All laws, decrees, orders, rules, and regulations,
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and other issuances Inconsistent with the provisions of this Act are repealed, amended,
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or modified accordingly.
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SEC. 10. Effectivity. - This Act shall take effect fifteen (15) days after its 
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Approved,