ATIVES

HOUS. *F Ro ORESE

SEVENTEENTH CONGRESS OF THE REPUBLIC ) RES arr
OF THE PHILIPPINES ) UTIL 20168
First Regular Session ) ve_2-70)

BY:

12748 _ REGISTRATION UNIT
HOUSE BILL NO. AOSBILLS AND INDEX SERVICE

Introduced by ANGKLA Party-list Representative JESULITO A. MANALO

AN ACT PROVIDING OPEN PILOTAGE SERVICES IN THE COUNTRY,
CREATING A PILOTAGE BOARD, ENHANCING THE POWERS OF THE
PHILIPPINE PORTS AUTHORITY AND OTHER PORT BODIES IN
REGULATING PILOTAGE SERVICES AND THE CONDUCT OF
HARBOR PILOTS AND FOR OTHER PURPOSES

EXPLANATORY NOTE

On 3 February 1986, about 3 weeks before the EDSA Revolution, the late
President Ferdinand E, Marcos promulgated Executive Order No. 1088,
entitled “Providing for Uniform and Modified Rates for Pilotage Services
Rendered to Foreign and Coastwise Vessels in All Private and Government
Ports”. The executive issuance, among others, mandated that pilotage services
shall be compulsory in all ports in the Philippines, whether in government or
private ports, It was also interpreted that only Harbor Pilots who are affiliated
or members of the United Harbor Pilots’ Association of the Philippines or
UHPAP may render pilotage services in the country.

Presently, there are only 111 Harbor Pilots in the entire country, which
constitute a monopoly of the pilotage services to vessels calling on ports or
pilotage district in the Philippines. Meanwhile, the country being an
archipelago inevitably continues to develop as a maritime nation whose
transport system and economy for the smooth flow of goods and passengers
are mainly dependent on seaborne trade. Thus, there is a need to ensure,
through legislation, the safe navigation of water borne commerce by adopting
as a State policy the proper regulation of the pilotage services by the
government. The conduct of pilotage service is also a vital function of
maritime travel that directly affects the efficient operations of the port, the


overall cost of transport and distribution of goods and the travelling, public
and even the protection to the marine environment.

For more than 40 years and even during the time of the Bureau of
Customs, pilotage services were provided only by harbor pilots who are
members of pilotage organizations, affiliated with the UHPAP. For decades
too, there has been a nagging demand to liberalize pilotage service in the
country, by allowing other individual harbor pilots or pilotage organizations
to likewise render pilotage services, especially in critical or busy ports. This
liberalization is expected to improve pilotage services, prevent maritime
accidents and regulate pilotage fees. The clamor has gained momentum once
again following the recent passage of. Republic Act No. 10667, entitled: “An
‘Act Providing for a National Competition Policy, Prohibiting Anti-
Competitive Agreements, Abuse of Dominant Position and Anti-Competitive
Mergers and Acquisitions, Establishing the Philippine Competition
Commission and Appropriating Funds therefor”.

Truly, there is a need to revisit the monopolistic set up in the provision
of pilotage services in the country, and this measure, once passed, should
address this prevailing concern.

TTO-A. MANALO
ist Representative
ANGKLA


SEVENTEENTH CONGRESS OF THE REPUBLIC )
OF THE PHILIPPINES )

First Regular Session )

HOUSE OF REPRESENT ATG
HOUSE BILL NO#&¢

aes

Introduced by ANGKLA Party-list Representative JESULITO A, MANALO.

AN ACT PROVIDING OPEN PILOTAGE SERVICES IN THE COUNTRY,
CREATING A PILOTAGE BOARD, ENHANCING THE POWERS OF THE
PHILIPPINE PORTS AUTHORITY AND OTHER PORT BODIES IN
REGULATING PILOTAGE SERVICES AND THE CONDUCT OF
HARBOR PILOTS AND FOR OTHER PURPOSES

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

Section 1. Short Title. - This Act shall be known as the “Open
Pilotage Services Act of 2016”.

Sec, 2. Scope. ~ This Act shall apply to all harbor pilots and
pilotage organizations providing pilotage services in all ports in the country,
whether owned and managed by the government or private persons.

Sec, 3, Policy and Objectives.~ It is hereby recognized by the State
that pilotage service plays a vital role in the efficient operation of ports to
ensure the smooth flow of maritime commerce and minimize if not avoid
maritime accidents, affects the overall costs of transport and distribution of
goods and the travelling public and helps in the protection of the marine
environment. It is therefore the policy of the State to adopt an open pilotage

set up for the country, upgrade the level of services and to regulate and


closely supervise pilotage services and the conduct of harbor pilots in order to
attain the following objectives:

(a) To ensure effective and efficient delivery of pilotage services
through the rationalization of pilotage services as well as regulation of
pilotage fees and charges;

(b) To ensure navigational safety at all times and protect port
facilities, vessels, passengers and cargoes, particularly the safety of life and
property at sea;

(©) To encourage a healthy competitive environment among, harbor
pilots and/or pilotage organizations that shall redound to the benefit of the
shipping industry, and passengers dependent on waterborne transport as well
as cargo shippers and consignees but without compromising maritime safety
and sacrificing the professional fees of harbor pilots commensurate to the
nature of their work, their highly qualified skills and required experience;

(d) To professionalize and upgrade the skills as well as the conduct
and discipline of harbor pilots at par with international standards of other
advanced maritime nations;

(e) To ensure a uniform or national standard of qualifications,
required skills, discipline and level of professionalism for harbor pilots who
are accredited to conduct or provide pilotage services in any pilotage district
or territorial jurisdiction of any government port body or entity;

(§ To protect the marine environment within the harbor limits of the
ports; and

(g) To avail of the latest developments in maritime technology with
respect to vessel monitoring, ship to shore or ship to ship communications,
vessel traffic management system, among others, and upgrade pilotage

services at par with global standards.


Sec. 4, Definition of Terms. -

(a) Accreditation - refers to an official recognition, approval or
permission granted by the Authority to a harbor pilot or pilot organization to
practice or provide harbor pilotage services in a particular pilotage district for
a prescribed period.

(vb) Authority -collectively refers to the Philippine Ports Authority
(PPA) and other government port bodies, port authorities or entities that
manage or operate their own port or regulate private ports within their
jurisdiction. The governing body of the Authority shall be the Pilotage Board.

(c) Government - Any branch, office, instrumentality or agency of
the Government, including the Authority or Port Body or Entity defined in
this Act.

(a) Gross Income - refers to the total gross billing assessed against
the ship owner or agent for pilotage and related services rendered, whether
collected or not.

(e) Harbor Pilot - is a duly licensed Master Mariner, accredited by
the Authority to practice his profession, who is not part of the regular
complement of the vessel, taken on board at a particular place, and tasked to
safely, efficiently and effectively perform pilotage service within a specific
Pilotage District. A Harbor Pilot may or may not be a member of a pilotage
association.

() | MARINA - refers to the Maritime Industry Authority created in
1974 pursuant to Presidential Decree No. 474, and recently designated as the
single maritime administration for the implementation of STCW in
accordance with RA 10635, tasked to integrate the development, promotion
and regulation of the maritime industry.

(g) PCG - refers to the Philippine Coast Guard, which is one of the
oldest humanitarian armed service of the country that became formerly a part

of the Bureau of Customs and the Philippine Navy, among others, and later


on with the Department of Transportation and Communications. Under R.A.
No. 9993, it was mandated to perform preventive measures in ensuring the
safety of merchant vessels.

(hb) Permit to Operate - refers to the authority granted by the
Authority to any accredited pilot organization to render pilotage service in a
particular Pilotage District.

(i) Pilotage Board - the governing body of the Authority tasked to
regulate, control and supervise pilotage service and the conduct of Harbor
Pilots in all pilotage districts in the country.

()  Pilotage Exemption Certificate - a certificate or accreditation
indicating an exemption granted to a Master of a vessel to pilot his own vessel
ina particular port or Pilotage District.

(k)  Pilotage License - is the permit, license or accreditation granted
to a Master Mariner to exercise his profession as a Harbor Pilot.

()_ Pilotage Organization - is voluntary association of Harbor Pilots
duly registered with the Securities and Exchange Commission and licensed or
accredited by the Authority to render pilotage services in a particular Pilotage
District as defined in this Act. No harbor pilotage organization shall be
considered as the sole or official association of harbor pilots in a particular
port, Pilotage District or geographical area.

(m) Pilotage Service - is the act of conducting, navigating or
maneuvering a vessel to/from berth or anchorage, along channels, basins,
rivers and estuaries, including all related activities thereof.

(n) Port Body or Entity - other government port authorities, port
bodies or entities created under a special charter, including economic zones,
industrial estates and autonomous regions with existing ports within their
exclusive territorial jurisdiction.

(0) PPA - refers to the Philippine Ports Authority created pursuant

to Presidential Decree No. 857, as amended, which is the national port body


tasked to regulate all government ports as well as private ports in the country,
except those which may otherwise belong to or fall within the jurisdiction of
other special port bodies or entities of the government.

(p) Tug Assistance - The act of towing or pulling and /or pushing a
vessel with the help of specialized watercraft(s) with a single or combined
capacity of at least 300 BHP to direct or control her movement and enable her

to maneuver safely.

Sec. 5. Pilotage Board -A Pilotage Board is hereby created
composing of government port authorities, bodies or entities with their own
special charter mandated to administer or manage their own ports. The PPA,
as a national ports body, shall chair, through its General Manager, as ex-
officio Chairman, the Pilotage Board, with members coming from the CPA,
AFAB, BCDA, SBMA, CEZA and others similarly situated. The Chief
Executive Officers of the member port authorities or bodies shall sit as ex-
officio members or representatives to the Pilotage Board. The PPA shall
provide technical, legal, administrative, and secretariat support of the Pilotage
Board.

Sec. 6. Powers, Duties and Functions - The Pilotage Board shall
have the following powers, duties and functions:

(a) To exercise administrative control, regulation and supervision on
pilotage services and the conduct, performance and discipline of Harbor Pilots
in any Port District;

(b) To promulgate and adopt a common and standard rules and
regulations necessary for the enforcement and administration of pilotage
service and the conduct of Harbor Pilots in all Pilotage District in the country,
which shall include among others the establishment of pilotage safety trust

fund, administrative sanctions against erring harbor Pilots, among others;


() To create such committees or technical working groups to
facilitate its work or duties, plans or programs;

(a) To evaluate and issue accreditation or authority to Harbor Pilots
to conduct pilotage service within a specified Pilotage District or Districts,
including pilotage exemptions to a Master or Captain of a domestic vessel
from piloting his own ship;

(ce) Toaccredit Pilotage Organizations or associations;

(® To conduct related studies and researches on the latest
developments in maritime technology, maritime communications and vessel
traffic systems, among others, for the continuing improvement of pilotage
and ship navigation within the harbor limits;

(g) To establish a comprehensive training program in coordination
with MARINA and PCG for applicants or new Harbor Pilots as well as a
continuing advance training, program for incumbent Harbor Pilots;

(h) To maintain a record of the history of the Pilotage Districts, its
Harbor Pilots and records of maritime traffic and accidents, among others;

(i) To determine the number of Pilotage Districts taking into
consideration the volume of maritime traffic and other factors, to determine
the optimum number of Harbor Pilots within each Pilotage District;

(i) To determine and approve adjustments in pilotage fees, rates and
charges;

(k) To conduct investigations on maritime accidents involving
Harbor Pilots or in connection with the conduct of pilotage services; and

()) To do such other things as may be necessary, incidental or

conducive to the functions of the Pilotage Board.

Sec. 7. Establishment of Pilotage Districts.

‘The Authority, jointly
or collectively, in consultation with other port bodies or entities, may adopt

the existing Pilotage District, reorganize or establish new ones under its


jurisdiction as the need arises and in the interests of the port users or shipping
industry. Each Pilotage District shall be known by the name of the principal

port embraced within its limits.

Sec. 8, Open Policy in Pilotage Services. -Pilotage service in the
Philippines shall be provided directly by the Authority or on a non-exclusive
basis through duly accredited pilotage organizations or pool of duly
accredited Harbor Pilots. There shall be an open pilotage policy in every
Pilotage District and for the entire country. The Authority shall ensure that
shipping companies, vessel owners or ship agents shall be able to freely
choose from at least two (2) accredited pilotage organizations or a pool of
qualified Harbor Pilots in every pilotage district. Non-membership in a
pilotage organization shall not be a bar for a duly accredited Harbor Pilot to
render pilotage service in a Pilotage District where he is duly authorized to
serve. A Harbor Pilot may provide pilotage service in more than one (1)
Pilotage District provided he is duly qualified or accredited to render services

therein.

Sec. 9. Compulsory Pilotage; Optional Pilotage under Certain
Conditions. - As a general rule, pilotage in all Pilotage Districts shall be
compulsory for all foreign vessels of 500 Gross Tonnage and above, when
entering or leaving any Philippine port, whether owned by government or
private.

Pilotage for domestic vessels or liners regularly plying Philippine
ports may be optional, unless pilotage in the port concerned is otherwise
declared or required by the Authority or the Pilotage Board to be compulsory.
Where a port has been declared or required to be compulsory for domestic
vessels, the Master or Captain of the same vessel may be allowed to pilot his

own vessel if he has been plying or calling on the same port for at least sixty


(60) times; Provided, That that said Master or Captain has been issued a
special accreditation or Pilotage Exemption Certificate (PEC) for the same
vessel and for the specific port; Provided further, That the Authority or the
Pilotage Board may require additional qualifications peculiar to the prevailing
conditions in the port or Port District with respect to navigability of the
channel or fairway, sea current, presence of derelicts and other related
conditions.

The Authority may, if it appears necessary, exempt any vessel or
class of vessels while navigating in any Pilotage District from being under
pilotage service, subject to such conditions as it may deem appropriate. Under
such situation, the Authority shall take into consideration the physical and
navigational peculiarities of the port including its channels and fairways, the
size, type and maneuvering capability of the vessel, the existence of
navigational aids, the volume of vessel traffic and such other factors which

may affect the risks of vessel movement,

-The

Sec, 10, Power to Prescribe Pilotage Tariff and Rates
Authority shall have the power to prescribe and impose pilotage rates and
charges for every pilotage service rendered in every Pilotage District,
including any special service, if any. The pilotage fees and charges applicable
on vessels existing upon the effectivity of this Act shall continue to apply until
such time that the Authority may rationalize, revise, adjust or prescribe such
new rates and charges as may be necessary. In the rationalization or
adjustment of pilotage rates, the Authority shall require the pilot
organizations to submit their Audited Financial Statements for such period as
may be needed for the proper evaluation of such rate rationalization or

adjustment.


Sec. 11, Government Share. -Pilotage service is inherently vested
in the Authority, which it may render on its own or otherwise. When the
pilotage service is performed by a pilotage organization or individual Harbor
Pilot, the Authority shall, in consideration of the grant of such privilege or
authority and for the use of the port facilities, be entitled to a government
share of at least (10%) percent of the gross income realized to be paid directly
to the Authority or the proper port authority or entity where the pilotage
service was rendered not later than the 5th day of the succeeding month when
the pilotage service was rendered. Provided, That nothing in this Act shall
limit the Authority or other port authorities or entities from adopting other
modes of collection procedures, including requiring the shipping companies
and their agents in retaining, the corresponding government share and directly

remitting the same to the Government.

Sec, 12, Qualifications of a Harbor Pilot. -To be accredited and
authorized to render pilotage service in a specific Pilotage District or
particular port, an applicant for a Harbor Pilot must have the following
qualifications:

(a) A Filipino citizen;

(b) Not more than fifty-five (55) years old at time of application;

(c) Of sound physical and mental condition as well as of good moral
character; and

(a) A holder of a Maritime Industry Authority (MARINA) or
Philippine Coast Guard (PCG) license as a Harbor Pilot for the particular port
or Pilotage District applied for.

‘An application for a Harbor Pilot must be submitted with the Authority
or the proper Port Body or Entity that has jurisdiction over the port or
Pilotage District applied for. The Authority, together with the other port

bodies or entities shall promulgate a uniform and nation-wide standard rules,


regulations and procedures regarding qualifications, experience required,
physical fitness and other documentary requirements for application for
Harbor Pilots. The following criteria, among others, shall be considered in the
evaluation of the applicant: education, relevant trainings, age, length of
service or experience as a ship captain or master of foreign or domestic
vessels, length of service as a Harbor Pilot in other Pilotage Districts, and
tonnage of vessels handled. An applicant should have no conflict-of-interest
in any business or activity, or derive income from any tugboat operation or

other ancillary services required for or needed in any pilotage service.

Sec, 13, Accreditation of a Harbor Pilot. -Upon the
recommendation of the Chief Executive Officer of the Authority or Port Body
or Entity concerned, the proposed accreditation shall be submitted to the
Pilotage Board for approval. The accreditation of a qualified Harbor Pilot shall
have a term of five (5) years, which term may be renewable for the same

period.

Sec. 14. Duties, Responsibilities and Discipline of Harbor Pilots, ~
The rules, regulations and procedures which the Authority and other Port
Bodies or Entities shall promulgate shall cover not only the control and
supervision of pilotage service in the country but also the conduct, duties,
responsibilities and discipline of Harbor Pilots. Any Harbor Pilot who is
found to have violated the terms and conditions of his Accreditation
Certificate or the pertinent rules and regulations on pilotage shall be imposed
a fine of not less than One Hundred Thousand (Php100,000) Pesos but not to
exceed One Million (1,000,000) Pesos, as well as suspension or cancellation of

his accreditation as a Harbor Pilot.


Sec. 15. Pilotage Organization. ~The Harbor Pilots in a Pilotage
District may organize themselves into a corporation, partnership or
association which shall adopt its own rules or By-Laws provided it shall not
be in conflict with the rules and regulations of the promulgated by the
Pilotage Board. Such by-laws shall be submitted to the Authority or Port Body
it is under, together with the record of the association which shall contain,
among, others, its roster of officers and members, details on the vessels
serviced, marine accidents involved, marine protests filed and financial

information on collection and expenditures.

Sec. 16, Tug Assistance; Compulsory Tug Assistance, When
Required- Under normal conditions, any vessel may be allowed to maneuver
in port without tug assistance, The Authority, other Port Bodies or Entities
shall determine when a vessel must be assisted by a tugboat or set of tugboats
to ensure its safe navigation or maneuvering towards its desired berth or
destination. However, tug assistance shall be compulsory under the following
circumstances:

(1) When the size or tonnage of the vessel, or the peculiar conditions
in the port or channel as may be determined by the Authority, requires tug
assistance;

(2) During prevailing conditions in the port such as strong current,
wind factor or inclement weather or any condition or situation affecting safe
navigation;

(3) When the vessel is incapable of maneuvering itself;

(4) When the vessel opts to avail of tug assistance, even if under
normal conditions tug assistance is not necessary; and

(®) Such other situations, as may be determined by the Authority.


The master or ship captain, vessel owner or agent shall have a free
choice of tugboat operators or in the selection or procurement of tugboats

provided it is the required minimum towing or pushing capacity.

Sec. 17. Transitory Provisions. - Harbor pilots duly authorized
by the Authority to render pilotage services prior to the effectivity and
implementation of this Act shall continue to exercise their profession and be
given a period of two (2) years to complete or comply any new qualification
requirements under this Act. They shall be given preference over new
applicants as long as they have the substantially complied with the
requirements promulgated pursuant to this Act. All rules, regulations,
administrative orders, circulars and related issuances on pilotage services
promulgated by the PPA shall continue to apply until otherwise updated,
repealed or modified by the Pilotage Commission.

‘The prevailing rates existing upon the approval of this Act shall
continue to be charged for pilotage services until a new set of rates are
imposed or adjusted by the Pilotage Board following the effectivity of this Act.

Sec, 18. Implementing Rules and Regulations. - The Pilotage
Board shall promulgate the implementing rules and regulations of this Act
within a period of ninety (90) days from the date of effectivity of this Act.

Sec. 19. Separability Clause. - If any part or provision of this Act
is declared as unconstitutional or invalid by a court of competent authority,
the remaining provisions which are not affected thereby shall continue to be
in full force and effect.

Sec. 20. Repealing Clause. - Executive Order No. 1088 dated
February 3, 1986 is hereby repealed. Other laws, decrees, issuances, rules and
regulations, or any part thereof, which are inconsistent with or contrary to the

provisions of this Act, are hereby repealed or modified accordingly.


Sec. 21. Effectivity Clause. - This Act shall take effect fifteen (15)
days after its complete publication in the Official Gazette or in two (2)
newspapers of general circulation.

Approved.