j; MOUSE OF REPRESENTATIVES
RECEIVED

pare. 24 AUG 2016
Republic of the Philippines
HOUSE OF REPRESENTATIV!

Quezon City Faces
REEISR HON Unig
SEVENTEENTH CONGRESY BILLS ayy, -
First Regular Session ~ 2 SERVICE

3279

HOUSE BILL No.

Introduced by Representative Rosenda Ann Ocampo

EXPLANATORY NOTE

This bill seeks to require owners and operators of environmentally-critical businesses
to secure a mandatory environmental rehabilitation as a result of environmental impairment
from its operation.

‘The economy of the country is steadily increasing due to the growth of commercial
and industrial businesses. While these businesses provide investments, incentives and
employment, its large-scale operations may cause environmental disasters and undue
sufferings to the people. To ameliorate the people and rehabilitate the environment from the
environmental damages caused by these businesses, it is essential to institute a Mandatory
Environmental Insurance Coverage.

‘The Mandatory Environmental Insurance Coverage 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 all claims for the payment of
damages to health and property, environmental rehabilitation, remediation and clean-up costs
and expenses.

‘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, 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 damage to the community.
However, despite these environmental disasters, there is still no policy to ensure adequate
compensation for communities affected by man-made disasters.

Although the government recognizes the indispensable role of the private sector,
encourages private enterprise and provides incentives to needed investments, is also protects
and advance the right of the people to a balanced and healthful ecology in accord with the


thythm and harmony of nature. This bill is essential, therefore, to protect the business sector,
the people and the environment.

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

ROZENDA ANN OCAMPO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

HOUSE BILL No._ 8279

Introduced by Representative Rosenda Ann Ocampo

AN ACT
REQUIRING MANDATORY ENVIRONMENT INSURANCE COVERAGE FOR
ENVIRONMENTALLY-CRITICAL BUSINESSES.

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

SECTION 1. Mandatory Environment Insurance Coverage. — All owners and
operators of environmentally-critical businesses shall be required to secure a Mandatory
Environment 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.

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.

SECTION 2. Forms of Mandatory Environmental 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) Environment 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) Environment 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 Environment Pollution, Impairment and Clean-up Liability Insurance.

SECTION 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.

SECTION 4. Environmental Risk Inspector. — During the insurance coverage
period, a environmental risk inspector from the DENR shall conduct quarterly, bi-annual or
annual visits to the business firm’s project to evaluate and recommend measures to prevent
environmental disasters.

SECTION 5. Beneficiaries. — The beneficiaries of the Mandatory Environment
Insurance Coverage include affected communities, stakeholders and local 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 of 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.

SECTION 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 payment 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. .

4


The EMB-DENR shall not receive and handle payment of claims for environmental
damages, penalties and chargés, 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 provide 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.

SECTION 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 a 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 agent who shall approve the issuance of
certificates to owner 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.

SECTION 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.

SECTION 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.

SECTION 10. Effectivity. — This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.

APPROVED.