a
HOUSE REPRES Wy ative
RECEIVED
are, 18 AUG 2016

Republic of the Philippines TIME: OT ow

HOUSE OF REPRESENTATIVES
Quezon City

First Regular Session

114

HOUSE BILL NO.

Tntroduced by REPRESENTATIVE JESUS N. SACDALAN
First District, North Cotabato

EXPLANATORY NOTE

Palm Oil is the vegetable oll produced and consumed in largest quantity. The demand
for palm oil is global, and is forecast that palm oll shall become the world's most
produced, consumed and internationally traded edible oll (Center for Science in the Public
Interest, Washinton, DC), with Malaysia and Indonesia producing around percent of the
total volume. Without the large volume of exported palm oil from said countries, there
would be a major problem in meeting world demand for vegetable oil. The demand for
palm oil is forecast to double in 2020 and in order to achieve this production increase,
there is a need to also increase the areas to be planted for each yea. This increasing
demand is attributed to many uses of palm oil as a food and non-food ingredient. It is
used in such food as margarine, shortening, baked goods and candies, and in non-foods
‘as soaps, washing powders and cosmetics. Among its major markets are Asia, led by
India and China, and Europe.

In the Philippines, palm oil has been developed as an alternative for edible oil supply,
next to coconut. Palm oil has been widely grown in the Provinces of Agusan del Sur,
Agusan del Norte, Sultan Kudarat, North Cotabato, Maguindanao, Bohol, Palawan,
Bukidnon and Zamboanga de! Sur. Present data on palm oil production show that there
are already 75,000 hectares of land planted to palm oil ( Philippine Coconut Authority, Oil
Palm and Other Concerns and PD Di
hectares planted to palm oil, the Philippines is still considered a minor producer of palm

ion, 2016). However, even with this number of

oil in the Southeast Asian region. But, this is set to change with the country recently


declaring ambitions to convert some eight million hectares of idle lands across the
country into palm oil plantations (DENR, May 2014 Pronouncement), seeing more
financial returns in cultivating palm oil in one hectare of land compared to farming coco
trees.

With these declaration to expand the palm oil production areas, several areas in
Northern and Southern Luzon ventured into research and development on palm oil
plantation. However, there is still a need to verify through research the feasibility of
venturing on oil palm production in these areas.

Other than this concern, the present Palm Oil Plantation is also beset with technical
problems. During the series of palm oil stakeholders consultations initiated and facilitated
by the Philippine PalmOil Development Council, Inc. (PPDCI), the group articulated the
need for research and development on the aspect of — production, processing,
downstream and application for efficiency. It should be noted that at present, the
planting materials are imported or sourced out from out of the country. There is need for
“parent” planting materials, in order to develop our own palm oil nursery and lower the
cost, because cost of palm oil planting materials at present is pegged at P250/seedling .
Moreover, of the present areas planted to palm oil, some 9,000 hectares need
rehabilitation by fertilization.

Palm oil as a growing industry, more farmers and agri-business groups are engaged in
its production. But, with this current situation, I believe that the government needs to
aggressively provide the support in terms of policies, research and development,
smallholder support services, related technology in relation to health and environmental
protection, and infrastructure like oil mill facilities. The establishment of Palm Oil
Research and Development Center is very important and necessary.

In view of the above premises, the approval of this bill is most respectfully prayed for.

lee

REP. JESUS N. SACDALAN
First District, North Cotabato


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS:
First Regular Session

3114

HOUSE BILL NO. _

“Introduced by: REPRESENTATIVE JESUS N. SACDALAN
First District, North Cotabato

AN ACT
CREATING THE PHILIPPINE PALM OIL RESEARCH AND DEVELOPMENT CENTER
TO PROMOTE THE PHILIPPINE PALM OIL INDUSTRY , DEFINING ITS POWERS
AND FUNCTIONS AND PROVIDING FUNDS THEREFOR, AND FOR OTHER
PURPOSES

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

SECTION 1. Tit/e- This Act shall be known as the “Philippine Palm Oil Research and
Development Center Act of 2016".

SECTION 2. Declaration of Policy. - It is the declared policy of the State to develop
self-reliant and competitive industries through research, innovation, education and
training in science and technology. Moreover, the State encourages investments and
provides incentives to private enterprises, promote employment and_ livelihood
opportunities, overcome poverty and ensure long term productivity and sustainability in
the use of natural resources for agriculture and industrial purposes, which focuses on
long-term sustainability and mitigation of climate change.

In support of this State policies, the establishment of the PHILIPPINE PALM OIL
RESEARCH AND DEVELOPMENT CENTER (PPRDC) is aimed to harness the potential of oil
palm farming as a means of addressing poverty, ensure food security, enhanced


nutrition, generate employment opportunities, and sustainable use of unutilized and
underutilized land through program and projects that will bring about increase in palm oil
production among smallholders. Moreover, the PPRDC shall implement programs and
projects to develop the production, processing and utilization of palm oil and its various
products and by-products and thus, improve the quality of life in rural communities where
oll palm Is currently grown and will be grown.

SECTION 3. Definition of Terms. — As used in this Act, the following terms are defined
as follow:

(a) Phillipine Palm Oil Research and Development Center , - refers to the main
center for palm oil research, development and extension based at the University
of Southern Mindanao (USM) in the Municipalityof Kabacan, Province of North
Cotabato, Region XII and its subsequent satellite units as may be established,
whose mandate is to initiate and administer research and development
programs and projects on hybridization, to expand production, increase
productivity and promote the development of oll palm-based farming in the
country.

(b) Oil Palm - refer to the plant specy botanically known as Elaeis guineensis Jacq

(©) Palm Oil ~ a vegetable oil resulting from the milling or crushing of oll palm fresh
fruit bunches

(@) Oil Palm F1 hybrid - refers to a cross between a Dura (mother) and Pisifera
pollen source which produce the commercial type Fi hybrid seed known as
Tenera

(e) Palm Oil By-Products ~ the products coming out of the processing of fresh fruit
bunches of oil palm such as empty fruit bunches

(f) Oil Palm Farmer — a farmer engaged in oil palm farming

(g) Smallholder Oil Palm Producer - a farmer cultivating an area of five hectares or
less of oil palm plantation


(h) Palm Oil Millers — a business enterprises engaged in the primary processing of
oil palm fresh fruit bunches into crude palm oil and other related by-products.

SECTION 4. Creation of the Philippine Palm Oil Research and Development Center -
There is hereby created the Philippine Palm Oil Research and Development Center,
hereinafter referred to as the PPRDC, which shall be under the control and supervision of
the Department of Agriculture.

SECTION 5. Powers and Functions of the PPRDC. - The PPRDC shall have the
following powers and functions:

(a) Initiate and carry out genetic research, conservation and utilization of oil palm for
research and development purposes;

(b) Initiate and administer a multi-disciplinary rsearch program to generate high
yielding oil palm hybrids, establish oll palm plant nursery, develop innovative
production and processing technologies, including the utilization of palm oil and
palm oil by-products for economic and scientific purposes;

iC

Initiate research and development projects on oil palm to address technology,
policy and regulatory gaps so as to promote a robust and sustainable oll palm
industry, ensuring high standard in production and meeting demands for quality
palm oil in both domestic and international trade;

iG)

Empower palm oil farmers, palm oil millers and other stakeholders on the
modern methods in the production, processing, and marketing through various
support services such as training, demonstration farms, forums, market
matching, technology publications and other communication media;

(e)

Develop capacity building program, organize/ sponsor training, scientific
forums, including scholarships both local and abroad to improve the expertise of
PPROC staff, oil palm producers and other industry stakeholders;


(f) Promote and provide support in the establishment of value — added palm oil
enterprises to generate livelihood opportunities and improve general well-being
of the smallholder oi palm producers;

(g) Promote cooperative development among smallholder oil palm producers

/farmers and provide them access to oil palm planting materials, technological
know-how, as well as entrepreneurial competency for the enhancement of their

palm oil based enterprises and the protection of their welfare;

(h

Establish demonstration farms of appropriate/modern technologies in strategic
places of the country to encourage the widespread use of appropriate/modern
technology in oil palm plantation;

(i) Enter into contract, agreement and receive grants from local and foreign donors
either directly or through the Department of Agriculture upon the
recommendation of the PPRDC Advisory Board, or through the respective
academic boards of satellite units housed in universities and colleges upon the
recommendation of the PPRDC Advisory Board.

SECTION 6. Composition of the PPRDC Advisory Board- ‘There is hereby created an
Advisory Board which is mandated to develop policies and programs aimed at improving
the state of services needed by the Philippine Palm Oil industry in order to meet local and
global demands/opportunities.

‘The PPRDC Advisory Board shall be composed of the following:

(a) Secretary of the Department of Agriculture (DA) as Chairperson;

(b) President of the University of Southern Mindanao (USM) as Vice-Chairperson;

(c) Undersecretary of the Department of Science and Technology (DOST) as
Member;

(d) Undersecretary of Department of Environment and Natural Resources (DENR), as
Member


(e) Undersecretary of Trade and Industry (DTI) as Member;
(A) Administrator of the Philippine Coconut Authority (PCA) as Member

(g) Executive Director, Philippine Council for Agriculture, Aquatic and Natural
Resources Research and Development, (PCARRD), as Member;

(h) Managing Director, Board of Investments, as Member;
(i) President of the Philippine Palm Oil Industry Development Council, as Member;
(i) Representative of Smaliholder Oil Palm Producers Cooperative, as Member

(k) Executive Director of the PPRDC, as Member and Secretary of the PPRDC Advisory
Board.

SECTION 7, ~ Functions and Powers of the Advisory Board - The Advisory Board shall
meet on quarterly basis or as may be necessary, and shall perform the following
functions and powers:

(a) Recommend the selection of the Executive Director to be appointed by the
Secretary of the Department of Agriculture’

(b) Formulate policies and initiate programs and projects for the development of the
Philippine Palm Oil Industry’

(c) Review and approved the annual budget of the PPRDC;

(d) Evaluate the implementation, efficiency and effectiveness of the programs and
projects of the PPRDC;

(e) Approved the creation of positions, appointments to the position and staffing
pattern for the effectiveness and smooth implementation of PPROC upon the
recommendation of the Executive Director, and

(f) Recommend the establishment or abolition of satellite units or branches as may

be necessary;

SECTION 8. Executive Director of the PPRDC. ~ The PPRDC shall be headed by an
Executive Director who shall be responsible for the planning, implementation and
supervision of its programs, projects and activities. He shall be appointed by the


Secretary of Agriculture for a term renewable every three (3) years, upon
recommendation of the Advisory Board. All other officers and employees shall be
appointed by the Executive Director of the PPRDC, upon the approval of the Advisory
Body in accordance with the criteria set by the Advisory Board and the Civil Service

Commission.

The Executive Director must possess a high degree of educational, technical and
managerial competency in research and development, as well as of integrity and proven
probity in public service.

SECTION 9. Functions and Powers of the PPROC Executive Director . The following
are the functions and powers of the Executive Director.

(a) Recommend the creation of division and sections including the staffing patterns of
the PPRDC for approval by the Advisory Board;

(b) Recommend to the Advisory Board the appointment of personnel and consultants.
The involvement of personnel from the plantilla position of the University of
Southern Mindanao or any other satellite units as may be established, either in
full-time or part-time with PPRDC shall be done in consultation with the respective
head of such state college or university, and shall be paid on honorarium bases;

(©) Oversee the planning, implementation and evaluation of the policies, programs
and projects of the PPRDC;

(d) Consolidate and recommend the overall budget of the PPRDC for approval by the
Advisory Board; and

(e) Perform such other functions as may be assigned by PPRDC Advisory Board.

SECTION 10. Appointment of Division Chiefs and Unit Heads of the PPRDC. — Division
chiefs, unit heads, coordinators, project leaders and other positions in the PPRDC shall be
recommended by the Executive Director, and appointed by the Secretary of the
Department of Agriculture. Appointments to various positions in the PPRDC are subject
to corresponding qualification standards to be established by the Advisory Board of
PPRDG, and the rules and regulations set by the Civil Service Commission.

SECTION 11. Hosting and Development of PPRDC. ~ The University of Southern
Mindanao situated at Kabacan, Cotabato Province shall serve as the main host of PPRDC.


Satellite stations may be designated later upon the approval of the Advisory Board. For
this purpose an area of one hundred (100) hectares of the land grant of the University of
Mindanao at Kabacan, Cotabato Province will be located as area for research and
office/administrative functions of PPRDC. Part of the fund of PPRDC will be located for
the infrastructure development and strengthening the manpower of PPRDC including that
of the University of Southern Mindanao and such other satellite units as may be
established, who may be involved in the programs and projects of the center.

SECTION 12. Coordination among Stakeholders of the PPRDC and Linkage with other
Research & Development Institutions. - The PPRDC shall regularly monitor and evaluate
the palm oil research and development programs and identify the immediate gaps, needs
and essential concerns in the palm oil industry in consonance with the domestic and
international development and opportunities. It shall likewise coordinate with other
national government agencies and international RDE bodies in order to formulate
strategies that would sustain the long-term growth of the palm oil industry.

The PPRDC shall initiate and provide leadership in partnering with other national, regional
agencies and local government units in jointly implementing programs, in areas suitable
for oil palm farming and to enhance the achievement of the goals of this Act.

SECTION 13. Allocation of Funds. - Not more than forty percent (40%) of funds
allocated under this Act and in subsequent annual appropriations shall be used for
personnel services, and maintenance and operating expenses; thirty percent (30%) for
research, training and extension and other development support services; and thirty
percent (30%) for plant dispersal of hybrid palm oil seedlings with emphasiss on the
welfare of smallholder palm oil producers.

SECTION 14. Annual Report. - The PPRDC shall provide copies of the annual report to
the Office of the President, the Senate and the House of Representatives indicating
among others, the administration and institutional development of the PPRDC, and the
progress of programs and projects on the palm oil industry and its stakeholders.

SECTION 15. Appropriations. - The amount necessary to carry out the provisions of
this Act shall be include in the General Appropriations Act of the year following its
enactment into law and thereafter.


SECTION 16. Separability Clause. ~ If any part, section or provision of this Act shall
be held invalid or unconstitutional, the rest of the provisions shall not be affected
thereby.

SECTION 17. Repealing Clause, - All laws, executive orders, rules and regulations or
parts thereof which are inconsistent with this Act are hereby repealed or modified
accordingly.

SECTION 18. Effectivity Clause. - This Act shall take effect fifteen (15) days from
the date of its publication in the Official Gazette or in at least two (2) newspaper of

general circulation.

Approved: