NINETEENTH CONGRESS OF THE 
)
REPUBLIC OF THE PHIUPPINES 
)
First Regular Session 
)
SENATE 
S. No. 8G9
delude
©fficp of tfie ^voa'ptiirp
*22 JUL25 P2:18
i::v.
Introduced by Senator Grace Poe
AN ACT
ESTABLISHING A NATIONAL FRAMEWORK FOR THE MANDATORY 
ENVIRONMENTAL INSURANCE COVERAGE OF ENVIRONMENTALLY- 
CRITICAL PROJECTS
EXPLANATORY NOTE
Article II, Section 8 of the 1987 Philippine Constitution mandates the State to 
"...protect and advance the right of the people to a balanced and healthful ecology in 
accord with the rhythm and harmony of nature." In the landmark environmental 
case of Oposa vs Factoran (G.R. No. 101083), the Supreme Court ruled that "the 
right to a balanced and healthful ecology carries with it the correlative duty to refrain 
from impairing the environment."
The duty to refrain from impairing the environment'xs spelled out in several 
laws such as the Revised Forestry Reform Code (P.D. No. 705); the Water Code of 
the Philippines (P.D. No. 1067); the Philippine Mining Act of 1995 (R.A. 7942); the 
Philippine Fisheries Code of 1998 (R.A. 8550); the Philippine Clean Air Act of 1999 
(R.A. 8749); the Ecological Solid Waste Management Act of 2000 (R.A. 9003); the 
Wildlife Resources Conservation and Protection Act (R.A. 9147); the Philippine Clear 
Water Act of 2004 (R.A. 9275); and Environmental Awareness and Education Act of 
2009 (R.A. 9512), among other environmental laws.
In 2010, the Supreme Court issues the 'Writ of Kalikasan', a landmark legal 
remedy which mandated the State to "protect and advance the right of the people to 
a balanced and healthful ecology". The writ can be invoked in cases when the


aforementioned right is violated by "environmental damage of such magnitude as to 
prejudice the life, health or property of inhabitants."
However, there remain lapses in the protection of the people's right to a 
healthy and balanced ecology. In particular, environmental degradation and man­
made disasters which arise from economic activities are extremely underregulated. 
There have been many instances of man-made environmental damages like the 
1996 Marcopper Mining tragedy in Marinduque which led to the biological death of 
the Boac and Makalupnit rivers, and 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 Lafayettes, Philippine, Inc. also caused 
severe damage to the community. More detailed cases are listed below:
• 
In 2012, 20 million metric tons of sediments flowed into water channels from 
the Philex tailings pond in Itogon, spilling tons of sediments into the Agno 
River and Balog Creek. An investigation by the Samahan ng Nagtataguyod ng 
Agham at Teknolohiya Para sa Sambayanan (AGHAM) reported that Balog 
Creek is now "biologically dead". The livelihoods of residents near the spill 
were also severely affected.
• 
In August 2013, a mishap between 2GO Group Incorporated and Philippine 
Span Asia Carrier Corporation ships claimed twenty-four (24) lives and 
imperilled the Cordova 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. Days after the collision, oils from wrecked 
and sunken ships had reached 12 villages of Cordova town. The marine 
ecosystem of the affected areas was affected causing the residents to lose 
their livelihoods.
• 
According to a study by Greenpeace, the Chemphil Manufacturing Corporation 
has contributed to the wastewater in Pasig River. Sediments found in their 
channels that drain into the river were found to have high-levels of copper, 
manganese, lead, nickel, and zinc.


• In 2018, at the height of the rehabilitation efforts in Boracay Island, around 
200 establishments were fined and temporarily suspended operations for 
violating various environmental laws.
Environmental degradation due to economic activities is a form of "negative 
externality" or the unintended and indirect negative effects of economic activities on 
other producers and consumers. It is characterized as a social cost that is greater 
than the cost borne by private producers. Without prudent government regulation, 
producers of negative externalities will have no incentive to either absorb or account 
for the social costs which they impose upon the Filipino people. This is particularly 
important given the steady economic growth due to commercial and industrial 
development.
As a remedy, this bill proposes a Mandatory Environmental Insurance 
Coverage (MEIC) as a measure to somehow compensate the people and rehabilitate 
the environment from the environmental damages caused by certain economic 
activities. It requires MEIC for owners and operators of environmentally-critical 
projects. The said insurance will be used to compensate for damages and to 
rehabilitate any environmental impairment caused by their operation. The MEIC Is 
designed to relieve a business firm of the financial burden to spend for 
environmental loss or damage as a consequence of its project's construction or 
operation. It will answer for ail claims for the payment of damages to health and 
property; and the environmental rehabilitation, remediation and clean-up costs and 
expenses.
Although the government recognizes the Indispensable role of the private 
sector and encourages private enterprise and provides Incentives to needed 
investments. It also protects and advances the right of the people to a balanced and 
healthful ecology in accord with the rhythm and harmony of nature. This bill is 
essential, therefore, to protect the business sector, the people and the environment.


In view of the foregoing, the approval of this bill is urgently sought.
/ <h


NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
SEN AJ 
S. Mo.
feencitr
of Ujr a rtfirp
■22 JUL25 P2:18
received By;
Introduced by Senator Grace Poe
AN ACT
ESTABLISHING A NATIONAL FRAMEWORK FOR THE MANDATORY 
ENVIRONMENTAL INSURANCE COVERAGE OF ENVIRONMENTALLY- 
CRITICAL PROJECTS
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
1 
Section 1. Short Title. - This Act shall be known as the "Mandatory
2 
Environmental Insurance Coverage Act7'.
3 
Sec. 2. Definition of Terms. - As used in this Act:
4 
a) Environmentally Critical Project refers to a project that has high potential for
5 
significant negative environmental impact and is listed as such under
6 
Presidential Proclamation (P.P.) No. 2146, series of 1981, and P.P. No. 803,
7 
series of 1996, as well as other projects which the President may proclaim 
as
8 
environmentally critical in accordance with Section 4 of Presidential Decree
9 
No. 1586 or the Philippine Environmental Impact Statement System. This shall
10 
include heeivy industries, major manufacturing industries, major resource-
11 
extractive industries, major infrastructure projects, and other similar projects
12 
that could pose serious risks to people and the environment;
13 
b) Heavy industries refer to non-ferrous metal industries, iron and steel mills,
14 
petroleum, and petrochemical industries, including oil and gas smelting
15 
plants;
16 
c) Infrastructure projects refer to major dams, major power plants, major
17 
reclamation projects, and major roads and bridges; 
and


1 
d) Resource Extractive Industries refer to major mining and quarrying projects;
2 
forestry projects involving logging, major wood 
processing projects,
3 
introduction of fauna or exotic ammals in public or private forests, forest
4 
occupancy, extraction of mangrove products, and grazing; and fishery
5 
projects, specifically fishpond development projects and dikes for such
6 
projects.
7 
Sec. 3. Establishment of a National Framework for Mandatory Environmental
8 
Insurance Coverage. - Within one (1) year following the effectivity of this Act, a
9 
national framework for Mandatory Environmental Insurance Coverage (MEIC) shall
10 
be established. The framework shall consider the following:
11 
(a) Coverage. - All owners and operators of environmentally-critical projects
12 
(ECPs) shall be required to secure MEIC as prescribed under this Section, to
13 
compensate for adverse environmental consequences which include damages to
14 
health and property, and costs for environmental rehabilitation, remediation, clean-
15 
up and other environmental impairments arising from their operations.
16 
(b) Forms of MEIC. - The MEIC shall be in the following forms:
17 
1) Environmental guarantee cash fund established pursuant to existing
18 
environmental laws; or
19 
2) Environmental insurance policy (EIP) obtained from bonding or
20 
insurance companies, whenever the environmental guarantee cash
21 
fund Is Insufficient to cover for said adverse environmental
22 
consequences, upon determination and recommendation of the Inter-
23 
Agency Technical Committee created pursuant to Section 5 of this Act.
24 
The EIP may take the form of the following:
25 
1) Environmental Performance Bond (EPB) which shall be required for all
26 
ongoing activities or projects issued with Environmental Compliance
27 
Certificate (ECC) pursuant to Presidential Decree No. 1586, to
28 
guarantee adequate and timely compliance with the environmental
29 
standards and the terms and conditions set forth by the Department of
30 
Environment and Natural Resources (DENR) during the pre-
31 
development, development and construction phases of the project.


1 
The EPB shall answer for all environmental damages, penalties and
2 
legal obligations which may arise from the failure of the project
3 
proponent to comply with its undertakings during the aforementioned
4 
phases; and
5 
2) Environmental Pollution, Impairment and Clean-Up Liability Insurance
6 
(EPICLI) which shall be required for all existing and future activities or
7 
projects issued with ECC pursuant to Presidential Decree No. 1586 to
8 
cover operational phases. The EPICLI shall answer for all claims arising
9 
from damages to the environment; bodily injury, and property damage
10 
arising from a pollution event; and for the cost of environmental
11 
rehabilitation, clean-up or remediation responses to address the
12 
contamination or impairment of the environment.
13 
Sec. 4. Pre-requisite to the Construction or OperationaiPhase. - Owners and
14 
operators of ECPs shall not be allowed to commence construction or commercial
15 
operation without obtaining the MEIC required under Section 3 of this Act.
16 
Sec. 5. Creation of an Inter-Agency Technical Committee. - Within one (1)
17 
year following the effectivity of this Act, the Secretary of the DENR shall establish
18 
and chair an Inter-Agency Committee (lATC) with the Commissioner of the
19 
Insurance Commission and representatives of the insurance industry, the mining
20 
industry, and other stakeholders that the DENR may deem fit, as members. Within
21 
the same period, the lATC shall:
22 
a) Identify the perils or possible negative environmental impacts,
23 
activities, processes or undertakings that need to be mandatorlly
24 
insured as provided In Section 3 hereof;
25 
b) Conduct risk assessment to determine the appropriate Insurance
26 
coverage for different ECPs and activities;
27 
c) Formulate guidelines for the identification of primary impact areas, and
28 
prescription of rehabilitation or remediation measures In cases of
29 
environmental damages;
30 
d) Formulate cleanup guidelines;
31 
e) Formulate guidelines for the identification of beneficiaries of the MEIC;


1 
f) Ensure that the premium rates of the EIP are commensurate to the
2 
risks covered;
3 
g) Formulate guidelines for the determination of veracity of claims;
4 
h) Formulate guidelines for the establishment of insurance facilities; and
5 
i) Undertake such activities as may be necessary to fulfill the objectives
6 
of this Act.
7 
For purposes of paragraph (h) of this section, the Insurance Commission, in
8 
coordination with the DENR, shall formulate guidelines for the establishment of
9 
insurance facilities, within one (1) year following the effectivlty of this Act.
10 
Sec. 6. Environmental Risk Inspector. - During the insurance coverage
11 
period, an environmental risk inspector from the DENR shall conduct quarterly, bi-
12 
annual or annual visits to the firm's project to evaluate and recommend measures to
13 
prevent adverse environmental consequences.
14 
Sec. 7. Beneficiaries. - The beneficiaries of the MEIC include affected
15 
communities, stakeholders and local government units within the projects' primary
16 
impact areas. Beneficiaries also include government departments, bureaus and
17 
agencies which are tasked under law to undertake the rehabilitation, clean-up and
18 
monitoring of sites affected by the pollution or insurable event, for which no
19 
responsible private or public entity is specified.
20 
The beneficiaries shall be represented by the government, particularly the
21 
DENR. The lATC shall Identify the affected areas and prescribe rehabilitation or
22 
remediation measures pursuant to Section 5 of this Act.
23 
Sec. 8. Payment of Claims. ^The insurance company shall place all payments
24 
of claims into special escrow accounts in government depository banks which shall,
25 
in turn, disburse corresponding payments to beneficiaries, only upon the advice of
26 
the DENR and with proper documentation.
27 
The DENR may create an ad-hoc body composed of representatives from the
28 
business, labor, government, civil society groups, and other stakeholders to assure
29 
that claims are verified and rightful parties are compensated, and the environment is
30 
properly rehabilitated, cleaned-up, remediated, stabilized and protected.


1 
Sec. 12. Repealing Clause. - All laws, decrees, orders, rules and regulations,
2 
and other issuances inconsistent with the provisions of this Act are repealed,
3 
amended or modified accordingly.
4 
Sec. 13. Effectivity. - This Act shall take effect fifteen (15) days after its
5 
publication in the Official Gazette ox in a newspaper of general circulation.
Approved,