SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
Second Regular Session 
SENATE 
S.B. 2761 
Introduced by Senator Poe 
AN ACT 
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REQUIRING MANDATORY ENVIRONMENT INSURANCE COVERAGE 
TO PROMOTE ECOLOGICAL PROTECTION 
EXPLANATORY NOTE 
The primacy of the environment is enshrined Article II, Section 8 of the 1987 
Philippine Constitution, which 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." 
Implied in the "duty to refrain from impairing the environment" is the obligation to 
judiciously regulate the utilization of our natural resources. This obligation is spelled out in 
several laws. This list oflaws included: the Revised Forestry Code (P.D. No. 705), the Water 
Code of the Philippines (P.D. No. 1067), the Philippine Mining Act of 1997 (R.A. 8371), the 
Philippines 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), and the Wildlife 
Resources Conservation Act (R.A. 9147). 
Despite these existing laws that protect the environment, there are still lapses in 
implementing the constitutional right to a healthy and balanced ecology. The following 
information indicates ecological degradation: 
, 
• 
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 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 Incorporation and Philippine Span 
Asia Carrier Corporation ships claimed twenty-four (24) lives and imperilled the 
Cardova marine environment in Talisay, Ceby. 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 five barangays of Cardova 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 
have 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 and 
manganese, lead, nickel and zinc. 
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. 
This bill will require mandatory environmental insurance coverage for owners and 
operators of environmentally-critical businesses. The said insurance will be used to 
compensate for damages and to rehabilitate any environmental impairment caused by their 
operation. 
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, 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. 
This legislation is a counterpart version of a similar policy measure filed by 
Representative Rosenda Ann Ocampo (Manila, 6th District). 
In view of the foregoing, approval of this bill is urgently sought. 
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SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
Second Regular Session 
SENATE 
S·B.--2761 
Introduced by Senator Poe 
AN ACT 
REQUIRING MANDATORY ENVIRONMENT INSURANCE COVERAGE 
TO PROMOTE ECOLOGICAL PROTECTION 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
1 
SECTION 1. 
Mandatory Environment Insurance Coverage. - All owners and 
2 
operators of environmentally-critical businesses shall be required to secure a Mandatory 
3 
Environmental Insurance Coverage (MEIC) to compensate for 
damages to health and 
4 
property, environmental rehabilitation, remediation and clean-up costs and expenses as a 
5 
result of environmental impairment arising from their operations. 
6 
7 
For purposes of this Act, environmentally-critical businesses refer to commercial and 
8 
industrial establishments and enterprises, among others, that could pose serious risks to 
9 
people and the environment. 
10 
11 
SECTION 2. 
Forms of Mandatory Environment Insurance Coverage. - The 
12 
Mandatory Environment Insurance Coverage shall be obtained only from bonding or 
13 
insurance companies duly accredited by the Department of Environment and Natural 
14 
Resources (DENR) in the following forms: 
15 
16 
a) 
Environmental Performance Bond - which shall be required for all ongoing 
17 
activities or projects and applications for Environmental Compliance Certificate or Certificate 
18 
of Non-coverage to guarantee adequate and timely compliance with the environmental 
19 
standards and the terms and conditions set forth by the DENR during the pre-development, 
20 
development and construction phases of the project. The Environmental Performance Bond 
21 
shall answer for all environmental damages, penalties and legal obligations which may arise 
22 
from the failure of the project proponent to comply with its undertakings during the 
23 
aforementioned phases; and 
24 
25 
b) 
Environmental Pollution, Impairment and Clean-Up Liability Insurance -
26 
which shall be required for all existing and future activities or projects to cover operational 
27 
phases, including those that have been issued an Environmental Compliance Certificate or 
28 
Certificate of Non-coverage. 
The Environmental Pollution, Impairment and Clean-Up 
29 
Liability Insurance shall answer for all claims arising from damages to the environment, 
30 
bodily injury, and property damage arising from a pollution event including environmental 
1 


1 
rehabilitation, clean-up or remediation costs and expenses for contamination or impairment of 
2 
the environment. 
3 
4 
5 
The DENR shall determine which businesses or industries shall be classified as 
6 
environmentally-critical and shall be required to obtain an Environmental Performance Bond 
7 
or an Environmental Pollution, Impairment and Clean-Up Liability Insurance. 
8 
I 
9 
SEC. 3. Pre-requisite for the Issuance of Environmental Compliance Certificate or 
10 
Certificate of Non-coverage. - Owners and operators of environmentally-critical businesses 
11 
shall not be issued an Environmental Compliance Certificate or Certificate of Non-coverage 
12 
by the DENR without first obtaining the Mandatory Environment Insurance Coverage 
13 
required by this Act. 
14 
15 
SEC. 4. Environmental Risk Inspector. - During the insurance coverage period, an 
16 
environmental risk inspector from the DENR shall conduct quarterly, bi-annual or annual 
17 
visits to the business firm's project to evaluate and recommend measures to prevent 
18 
environmental disasters. 
19 
20 
SEC. 5. Beneficiaries. - The beneficiaries of the Mandatory Environment Insurance 
21 
Coverage include affected communities, stakeholders and local government units within the 
22 
projects' primary impact areas. Beneficiaries also include government departments, bureaus 
23 
and agencies which are tasked under law to undertake the rehabilitation, clean-up and 
24 
monitoring of the projects affected by the pollution event for which no responsible private or 
25 
public entity is specified. 
26 
27 
The beneficiaries shall be represented by the government, particularly the DENR, 
28 
which shall identify the affected areas and prescribe rehabilitation or remediation measures. 
29 
30 
SEC. 6. Payment of Claims. - The insurance company shall place all payments of 
31 
claims into special escrow accounts in government depository banks which shall in turn 
32 
disburse corresponding payments to beneficiaries only upon the advice of the Environmental 
33 
Management Bureau of the DENR (EMB-DENR) after proper documentation. 
34 
35 
The EMB-DENR may create a multi-sectoral body composed of representatives from 
36 
the business, labor, government, civil society and other stakeholders to assure that claims are 
37 
verified and rightful parties are compensated and the environment is properly rehabilitated, 
38 
cleaned-up, remediated, stabilized and protected. 
39 
40 
The EMB-DENR shall not receive and handle payments of claims for environmental 
41 
damages, penalties and charges, except for the claim component which properly accrues to it 
42 
as an insurance beneficiary. 
43 
44 
The government agency tasked with rehabilitation and beneficiary of the Mandatory 
45 
Environmental Insurance Coverage as provided under Section 5 of this Act shall undertake 
46 
the same with funds corning from the insurance claim upon recommendation of the EMB-
47 
DENR or the multi-sectoral body created by EMB-DENR and approved by the Secretary of 
48 
Environment and Natural Resources. 
49 
2 


1 
SEC. 7. Penalties. - The failure of the owner and operator of environmentally-critical 
2 
businesses to take out Mandatory Environment Insurance Coverage in violation of this Act 
3 
shall be punished with a fine of five hundred thousand pesos (P500,000.00) but not more than 
4 
two million pesos (P2,000,000.00) or imprisonment of not less than six (6) years but not more 
5 
than twelve (12) years, or both, at the discretion of the court. 
6 
7 
In the case of a partnership, association, corporation or any juridical entity, the fine 
8 
shall be imposed upon the president, treasurer or any other officer or person responsible for 
9 
the violation. 
10 
11 
If the offender is a foreigner, the offender shall be deported immediately without 
12 
further proceedings in the Bureau of Immigration after the service of sentence. 
13 
14 
Government officials, employees and agents who shall approve the issuance of 
15 
certificates to owners or operators of environmentally-critical businesses without the 
16 
necessary Mandatory Environmental Insurance Coverage, in violation of this Act, shall suffer 
17 
the penalty of suspension of not less than thirty (30) days but not more than six (6) months 
18 
after due notice and hearing in the appropriate administrative proceedings. 
19 
20 
SEC. 8. Implementing Rules and Regulations. - Within sixty (60) days from the 
21 
approval of this Act, the Secretary of Environment and Natural Resources shall, in 
22 
coordination with the Commissioner of the Insurance Commission, promulgate the necessary 
23 
rules and regulations for the effective implementation of this Act. 
24 
25 
SEC. 9. Repealing Clause. - All laws, decrees, orders, rules and regulations, and 
26 
other issuances inconsistent with the provisions of this Act are repealed, amended or 
27 
modified accordingly. 
28 
29 
SEC. 10. Effectivity. - This Act shall take effect fifteen (15) days after its publication 
30 
in the Official Gazette or in a newspaper of general circulation. 
31 
32 
Approved, 
3