Republic of the drt
HOUSE OF REPRESENT
Quezon City

HOUSE BILLNO,__99

Introduced by Representative JOLY SARTE SALCEDA

AN ACT
ESTABLISHING THE NATIONAL FRAMEWORK FOR WATER RESOURCE
MANAGEMENT AND CREATING THE DEPARTMENT OF WATER
RESOURCES AND THE WATER REGULATORY COMMISSION,
DEFINING THEIR MANDATES, POWERS AND FUNCTIONS,
AND APPROPRIATINGS FUNDS THEREFOR

EXPLANATORY NOTE

1. Department of Water Resources

A 2015 World Resources Institute study warned that the Philippines will likely
experience a "severe water shortage” in the year 2040, This is not surprising given the fact that
in the World Bank’s 2003 Philippine Environment Monitor. it was already reported that as of
year 2000, compared to other countries in Southeast Asia. the Philippines already ranked 2nd
to the lowest in terms on annual renewable water resources per capita,

Climate change hazards (rainfall variability. increasing temperatures. rising sea level
and more extreme weather) which pose major fisks to water resources and a growing
population will further aggravate this situation, PAGASA’s downscaled climate projections
have shown that the country’s Water resources will be one of the most adversely affected by
climate hazards. This highlights the urgent need to properly plan for and manage our finite
water resources in order to meet the increasing demand of a growing population. continuing
economic development amidst many competing users.

The outcome document of the Rio +20 Earth Summit, entitled “The Future that We
Want” emphasized just how important water is by stating that “Water is at the Core of
Sustainable Development”, It is acknowledged that there can be no development without water;
there can be no life without water. Or to put it more succinctly. Water is Life!

Access to safe and potable drinking water as a basic right was recognized by the United
Nations as one of its Millennium Development Goals (MDGs) In July 28.2010. 22 countries
formally acknowledged this "right to water” in a UN General Assembly. Barely two months

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later. the ITN Human Rights Council adopted a binding resolution recognizing that the human.
right to water and sanitation is part of the right to an adequate standard of living.

Yet, in the Philippines, as of 2015, more than 12 million people still get water from
unsafe sources, More than four million people do not have access to sanitary toilets and thus,
defecate openly. An additional two million are limited to unimproved sanitation facilities.

As pointed out by the Philippine Water Supply and Sanitation Master Plan (PWSSMP).
it is imperative that these present problems are addressed considering the adverse impacts that
unsafe water supply and polluted waters have on people's health, and the economy.

Based on the 5-ycar data from the National Epidemiology Center of the Department of
Health, 31% of illnesses were water related.’ It has been estimated that the economic impacts
of poor sanitation to be in the order of USS 1.4 billion, equivalent to about 1.5% of GDP in
2005 with health impacts accounting for 72% at US$1B. Episodes of red tides and fish kills in
different parts of the country highlight the extent of the losses of livelihood of our fisherfolks
from polluted waters. And the recent closure of Boracay due to severely polluted waters
(mainly coming from sewage) also highlights the adverse impacts of dirty waterson the tourism
industry. which is a major contributor to economic growth.

Unfortunately, the management of the country’s water resources remains fragmented
and uncoordinated with over 30 government units and agencies at national and local levels
implementing separate and disharmonized policies, plans and programs to develop and operate
water facilities and infrastructure for various uses. regulate water use and sct tariffs, and
monitor water-related parameters. This continued overlapping and fragmented management
and regulation of water resources and services hinders the enactment and implementation of #
comprehensive. integrated and doable long-term solution to address keener competition.
imbalance resource utilization and conilict of interests among water users. especially in areas
already identified as water-stressed. It puts at risk the attainment of the SDG target of universal
access to safe water supply and improved sanitation by 2030,

‘There is an urgent need for an integrated and coordinated planning and implementation
of programs and projects that promote synchronized, sustainable and science-based
management of the country’s water resources that would address the imbalance in water
resouree utilization, reduced water availability, declining water quality, recurrent flooding, and
other water-related issues in many parts of the country, This cannot be achieved without
addressing the fundamental povernance and institutional issues of the sector.

‘Consistent with the various studies. plans, and initiatives conducted in the past two (2)
decades which have supported the need for the establishment of a strong apex body for the
water resources sector, the Philippine Development Plan (2617-2022) identified as a primary
strategy for the water supply. sewerage and sanitation sub-sector the creation of an apex body
for water resources management and the formulation of master plans to address the fragmented
structure and that foster coordinated efforts across the country. This actually holds true for the
entire water sector.

‘An apex body for the water sector is critically needed in order to have a single entity
that will be in charge of the overall planning. programming. policy formulation. and

excluding Timor Leste and Brunet who were not included i the study

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management for the sector. It will serve as the sector's champion and ensure that subsector
policies and plans are aligned with the overall Sector Master Plan. It will coordinate, monitor
and evaluate sector performance and take appropriate action as needed. [1 will conduct
extensive and regular hydrological studies/analyses which are very vital for water planning and
allocation purposes.

It is thus proposed that a Department of Water Resources be created to ensure that
Filipinos benefit from this fundamental human right and that this finite resource will be
sustained,

Tl. Water Regulatory Commission

Based on the 2015 Family Income and Expenditure Survey of the Philippine Statistics
Office. 87.2% of the population has access to water from formal providers, but only 43.6%
have piped connection. 11.2% use communal faucets and the remaining 45.2% rely on point
sources. The remaining 12.8% of the population use various means of getting water including
fetching water from rivers, digging shallow wells or buying vended water. On wastewater
treatment services, coverage is dismal, Roughly 4% of the population is connected to sewerage
systems, It is only in Metro Manila where the service providers, in this case private
concessionaires. have a program for septage management services and future plans to put in
place improved wastewater treatment collection and treatment services. The inadequate safe
water and wastewater services result in significant economic losses, attributed to health costs.
losses from tourism and fisheries industries. Diarrhea. the most significant waterborne disease.
remains as one of the leading causes of morbidity and mortality in the Philippines, an easily
preventable disease.

The problem is not in access alone: the water supply level of service (i.¢.. fom point
sources or communal faucets to piped connection) and quality of service (for example
achie' 24/7 supply, adequate pressure and drinking water quality) must be improved
considerably also.

While there are many facets to the problem, poor economic regulation has been
idemtificd as @ critical structural weakness in the sector, Because of the lack of or poor
enforcement of economic regulations. water utilities are not compelled to expand coverage or
improve quality of service. tariffs are not set rationally. operations are not efficient. and few
service providers are financially viable. The inability of the formal service providers to expand
coverage encouraged “work-around” solutions that eventually aggravated the problem
including spawning of many small-scale water service providers. Based on the nationwide
registry of water service providers*There are an estimated 23,603 water service providers from
1,431 municipalities and cities in the Philippines, 90% of which have connections of less than
5.000. Hence, by and large there are no economies of scale resulting in inefficiencies and
inherent limitations for growth.

In the Philippine context poor economic regulation is a result of fragmentation; there
are several agencies doing economic regulation. (¢.g.. LWUA. MWSS. LGUs. NWRB.
TIEZA). Apart from NWRB, regulators have conflicts of interest in their dual role as financier,
as in the case of LWUA or as direct service providers. as in the case of municipal or city
povernments thus effectively practicing self-regulation,

? The “Listahang Tubiy" managed and implemented by the National Water Regulatory Board
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This bill also intends to address the issue of fragmentation through the rationalization
of the economic and administrative regulation of water utilities through an independent. quasi-
judicial body called the Water Regulatory Commission, Among its functions will be to enforce
service coverage and quality of performance targets. toward the objective of providing every
Filipino safe water supply and adequate wastewater services.

‘The immediate passage of this bill is earnestly sought,

JOEY SARTE SALCEDA

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Nineteenth Congress
First Regular Session

55
HOUSE BILLNO._°?

Introduced by Representative JOLY SARTE SALCEDA

AN ACT
ESTABLISHING THE NATIONAL FRAMEWORK FOR WATER RESOURCE
MANAGEMENT AND CREATING THE DEPARTMENT OF WATER
RESOURCES AND THE WATER REGULATORY COMMISSION,
DEFINING THEIR MANDATES, POWERS AND FUNCTIONS,
AND APPROPRIATINGS FUNDS THEREFOR

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

CHAPTERI
GENERAL PROVISIONS

SECTION 1. Short Title. ~ This Act shall be known as the “National Water Act”.

SEC. 2. Declaration of Policy. — Access to water is a basie human right, All water
belongs to the State which shall govern its development and utilization for the people. It is
hereby declared the policy of the State to ensure the provision of safe. adequate, affordable.
and sustainable water supply and improved sanitation services, while maintaining the
protection, preservation, and revival of the quality of the country’s water resources and
ecological balance.

In pursuit of this policy, this Act shall have the principal objective of ensuring and
accelerating universal access to water supply and sanitation services. in a regulatory regime
that encourages responsible private sector participation, and shall foster and prioritize the
establishment of infrastructure and public works that adopt innovative solutions and
international best practices to address the challenges of climate change. Further, all water and
water treatment infrastructure projects are hereby declared as projects imbued with national
imerest.

SEC. 3. Definition of Terms. ~ As used in this Act:
(2) Bulk water supplier refers to any entity, natural or juridical. whether public or

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private, supplying or intending to supply large quantities of raw or treated water to buyers who
will use these for their own consumption, such as industrial companies. or for retail distribution
to consumers such as water service providers or real estate developers managing their awn
distribution network.

(b) Environmental services refer to qualitative functions of natural non-produced assets
of land, water, and air, including related ecosystems, and their biota, and which may be
categorized into three basic types: (a) disposal services which reflect the functions of the
natural environment as an absorptive sink for residuals; (b) productive services which reflect
the economic functions of providing natural resource inputs and space for production and
consumption. and (c) consumer or consumption scrvices which provide for physiological as
well as recreational and related needs of human beings.

(©) Flood Control refers to methods. acts, and protocols to be observed in order to
prevent and reduce the detrimental and catastrophic effects of flood waters which include
sediment-laden or turbid flows, and hyper-concentrated flows or debris flows.

{d) Flood Risk Management (FRM) refers to such acts of defining and determining the
appropriate methods, acts, and protocols aimed at preventing and reducing the risk of incurring
loss of both life and property due to flood waters. Flood risk management consists of a cycle
of prevention, mitigation, adaptation. preparedness and carly waming, and response and
recovery, The elements of FRM include: integrating land-use planning and coastal zone
management into water management: adopting a holistic approach so that FRM is part of wider
risk or multi-hazard management of earthquakes, landslides, and storm surges: managing risk
and uncertainty as a whole so it not only mitigates hydrological uncertainties but also social,
economic and political uncertainties on account of human behavior and the cultural dimensions
of FRM.

(e) Gender Equality refers \o the principle asserting the equality of men and women
and their right to enjoy equal conditions realizing their full human potential to contribute to
and benefit from the results of development, and with the State recognizing that all human
beings are free and equal in dignity and rights.

(8) Infrastructure and public works refer only to wholly or primarily water-related
projects and does not include projects that do not fall within the purview of the objectives,
power and duties of the Department of Water Resources created under this Act.

{g) Integrated Water Resource Managemen (WRM) refers to a systematic,
collaborative. and multi-stakeholder process which promotes the coordinated development and
management of water. land. and related resources within geophysical boundaries in order to
maximize the resultant economic and social welfare in an equitable manner. and without
compromising the sustainability of vital ecosystems.

(h) Levels of water supply refer to communal sources of water described according to
location and size of the recipient human settlement as follows:

(1) Level I or the point source is a protected well or a developed spring with an
outlet but without any distribution system. generally adaptable to rural and
upland areas where houses are thinly scattered, and is a facility which usually
serves an average of 15 houscholds.

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(2) Level Il or the communal faucet system or stand posts is a system composed of
a water source, & reservoir, a piped distribution network. and communal faucets
where one faucet serves 4 to 6 households and is generally suitable for rural and
urban fringe areas where houses are clustered densely to justify a simple piped
system.

(3) Level III or the waterworks system or individual house connections is a system
with a water source. a reservoir, a piped distribution network and household
taps, suitable for densely populated urban areas.

(i) License refers to the Water Supply and/or Sanitation Services Operating License that
the Water Regulatory Commission is authorized to grant and issue to service providers.

(i) Licensee refers to a service provider to whom a license is granted or issued by the
Water Regulatory Commission.

(k) Missionary Water Services refer to water supply or services to areas that have no
existing safewater supply and services due to geographic limitation or absence of economic
and market viability,

() National Water Resources Management Plan (N#'RMP) refers to a policy document
that contains a framework to guide the development and management of all the water resources
in the Philippines, the general strategies and work to be pursued to ensure the sustainability of
the resource towards water security. and top-level direction on the utilization of existing water
resources in line with national development plans, policies. and programs in accordance with
the [WRM framework. The NWRMP shall also include a water infrastructure development
program for all waters of the country’ as welll as provide general guidance on how this shall be
supported within an integrated financing framework that can draw from public. private. and
international development funding sourees.

(m) Net Waste Load refers to the difference of the initial waste load of the abstracted
water and the waste load of the final effluent discharge of an industry,

{n) Regulatory Units refer to the offices established under Section 20 of this Act which
issue licenses authorizing the operation of Water Supply and Sanitation Services. and provide.
review, determine, fix, and approve water and sewerage tariffs. rates, and charges that licensees

may impose.

(o) River basin refers to an area of land drained by a stream or body of fixed water and
its tributaries which have a common outlet for surface run-off,

(p) River Basin Organization (RBO) refers to multi-stakeholder organizations which
plan. coordinate, and monitor activities within a river basin cluster.

(q) Sanitation refers to the provision of facilities and services for the safe management
of human excreta, from toilet to containment, and storage and treatment onsite or conveyance.
treatment and eventual safe end use or disposal. and includes the safe management of solid
waste and animal waste,

Page 13


(1) Sediment management refers to control of sediment erosion and deposition in rivers.
reservoirs, and coastal zones through non-structural and structural measures and contro! works.

(s) Sustainable Development Goals (SDGs) also known as the 17 Global Goals refer to
the universal call to action to end poverty. protect the planet and ensure that all people enjoy
peace and prosperity by 2030 adopted by all United Nations Member States in 2015.

(t) Septage is the liquid and solid material pumped from a septic tank, cesspool, or other
primary treatment source.

(u) Sepiage Management refers to the provision of proper collection, treatment, and
disposal of sepiage.

(9) Service Area refers to the area covered by the water distribution system. sewerage,
and Jor seplage management services.

() Service Provider refers to any entity, natural or juridical, whether private or public,
providing or intending to provide levels II & III water supply, including bulk water suppliers,
sewerage, septaze treatment, and disposal services for domestic, residential. industrial, or
commercial use.

(x) Sewage refers to water borne human or animal wastes, excluding oil or oil waste,
removed from residences, buildings. institutions, and industrial and commercial establishments
together with such groundwater, surface water and storm waters as may be present including
such waste from vessels, offshore structures, other receptacles intended to receive or retain
waste or other places or the combination thereof.

(y) Sewerage refers to any system or network of pipelines, ditches, channels or conduits
including pumping stations, lift stations and force mains. service connections including other
infrastructure. devices, or appliances appurtenant thereto. which include the collection,
transport, pumping and treatment of sewage to a point of disposal.

(2) Sewers refer to pipes or such other works or structures which are built and
constructed to carry. transport. and dispose of sewage

(aa) Social inclusion refers to the process of improving the terms for disadvantaged
individuals and groups to take part in society.

(bb) Tariffs refer to such amounts which may be charged by licensees for their water
supply and sanitation services based on principles, standards, and guidelines established by the
Department of Water Resources.

(co) Water Demand Management (WDM) refers to any method, whether technical.
economic, administrative, financial. or social that will accomplish one or more of the
following:

(1) Reduce the quantity or quality of water required to accomplish a specific task;

(2) adjust the nature of the task or the way it is undertaken so that it can be
accomplished with less water or with lower quality water;

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(3) Reduce the loss in quantity or quality of water as it flows from source. through
use, to disposal;

(4) Shift the timing of use from peak to off-peak periods: and

(5) Increase the ability of the water system to continue to serve society during times
when water is in short supply.

(dd) Water Districts refer to government-owned and controlled corporations organized
under Presidential Decree No. 198, as amended. created primarily to acquire, install. operate.
maintain, and improve water supply and distribution systems for domestic. industrial and
municipal uses of residents and to provide, maintain and operate wastewater collection,
treatment and disposal facilities within the boundaries of the district.

(ee) Water pollution refers to any alteration of the physical, chemical, biological. or
radiological properties of a body of water resulting in the impairment of its purity or quatity.

(#8) Water Resource refers to water under the ground or groundwater, water above the
ground such as surface water, run-off, floods, stormwater and urban drainage. treated
-water in the atmosphere or rain water, and the waters of the sea within the territorial
jon of the Philippines.

(eg) Water Resources Regions refer to the contiguous clusters of river basins which are
grouped together according to the hydrological boundaries, physiographic features, and
homogeneity in climate. whether or not they straddle different local government units. for
administrative purposes under the Department of Water Resources.

(hh) Water Service Provider (WSP) refers to the water district. any Local Government
Unit (LGU)-run water utility, Barangay Waterworks and Sanitation Association (BWSA),
Rural Waterworks Sanitation Association (RWSA), cooperative and private sector entity that
provides water supply services to any given area.

Gi) Water supply service refers to any activity comprising Levels 1. I and 11] water
supply including bulk suppliers. suppliers to subdivisions, and other water service providers.

CHAPTER I
THE DEPARTMENT OF WATER RESOURCES

SEC. 4. The Department of Water Resources — There is hereby created and established
the Department of Water Resources, hereinafter referred to as the Department.

SEC. 5, Mandate of the Department. The Department shall be the primary agency
responsible for the comprehensive and integrated identification and mapping of all water
resources. planning. policy formulation. and management of the ownership, appropri
utilization, exploitation. development. and protection of water resources in the Philippines to to
ensure the optimal use thereof for domestic and municipal water supply. sanitation, irrigation.
hydropower, industry, navigation, flood management, and recreation except fisheries or
aquaculture. The Department shall also be the primary agency responsible for the planning and
policy formulation towards the attainment of universal access to safe. adequate. affordable. and

Page 15


sustainable water supply, and improved sanitation services for all Filipinos. The Department
shall be the primary national agency to enforce Presidential Decree No. 1067 otherwise known
as The Water Code of the Philippines and Republic Act No, 9275, otherwise known as the
Philippine Clean Water Act of 2004.

The Department shall exercise the powers and functions of the defunct Pasig River
Rehabilitation Commission created under Executive Order No. 54 Series of 1999 and abolished
under Executive Order No, 93 Series of 2019, specifically the following roles that were
transferred to the Manila Bay Task Force and DENR through the latter EO:

(a) Update and take the lead in the overall implementation of the Pasig River
Rehabilitation Master Plan, which shall harness the Pasig River's potential for transportation,
recreation and tourism purposes while undertaking the rehabilitation and restoration of its
maritime life: and

(b) Ensure that the easements provided for in the Civil Code and other relevant laws
are enforced, especially in all the esteros and waterways that drain into the Pasig River as well
as abate the dumping of untreated industrial wastewater and sewage into the river, including
all acts and omissions in violation of Presidential Decree (PD) No. 984, s. 1976, as amended
entitled, Providing For The Revision Of Republic Act No. 3931, Commonly Known As The
Pollution Contral Law, And For Other Purposes, PD No. 274, s. 1973 entitled, Pertaining To
The Preservation, Beautification, Improvement And Gainful Utilization Of The Pasig River,
Providing For The Regulation And Control Of Pollution Of The River And lis Banks In Order
To Enhance lis Development. Thereby Maximizing Its Utilization For Socio-Economic
Purposes, and other related laws.

SEC. 6. Guiding Principles. -In the pursuit of its mandate. the Department shall be
guided by the following key principles:

(a) The concept of good water governance for water security and sufficiency shall be
adopted across all levels of governance by stakeholders such as the national govemment. local
government, non-government organizations. private organizations. individuals, even global
‘societal actors, and in various sectors such as water supply, irrigation, fisheries, hydropower,
navigation. ecosystem services. flood management. climate change. and recreation, It shall
entail publicly transparent. socially accountable, and multi-stakeholder participatory water
policy planning, management, and decision-making processes.

({b) Access to safe water supply and improved sanitation is a human right that needs 10
be fulfilled and protected.

(c) Integrated Water Resource Management (1WRM) shall be adopted as the basic
framework which is the coordinated development and management of water, land. and related
resources within hydrological boundaries to optimize economic and social welfare without
compromising the sustainability of vital ecosystems. The [WRM Framework shall include an
enabling environment that utilizes proper pol legal instruments, and institutional
frameworks for effective implementation, participatory and collaborative water policy and
management decisions, and management instruments for efficient use of updated and accurate
data, science-based decision support systems, proper information, education, communication
(IEC) programs, assessment and allocation tools, or regulatory functions. It shall observe the
mutual accountability mechanism among stakeholders at the national, regional, and global

Page |6


levels reinforcing multi-stakeholder decision-making following a framework with specific,
measurable, attainable, relevant. and timely actions.

(4) Each river basin has its unique characteristics relating to the physical. socio-cultural,
and other aspects, and water management shall be performed at river-basin level. involving all
the stakeholders at that particular river basin.

(c) Integrated and accurate data collection and analysis and the use of scientific decision
support systems shall be undertaken in water resources management including flood modeling
and warning systems that arc essential for an effective, efficient. and sustainable water
resources management system,

(A) The development of water resources shall include strategies for the mitigation of
water-related hazards and climate change adaptation.

(g) Water resources and services should be provided where they are intended and most
needed so that water is fairly and sustainably managed.

(b) The proper operation and maintenance of waterworks systems resulting in the
uninterrupted and adequate supply and distribution of potable water for domestic and other
purposes. and the proper operation and maintenance of sewerage systems which are essential
services 10 public health and safety, are to be ensured at all times. The State shall therefore
supervise and control the establishment, operation, and maintenance of such systems,

SEC 7. Objectives of the Department. ~The Department shall:

(a) Promote and adopt water demand management as a national policy to ensure that
‘water is optimized. that water efficiency and conservation become a way of life. that the
recycling and reuse of water and treated wastewater are widely practiced, that water is properly
priced to encourage efficient use and conservation and that rainwater, flood waters, and run-
offs are captured or harvested. stored and treated for future use:

(b) Prioritize and seek the immediate attainment of universal access to safe, adequate,
affordable and sustainable water supply and improved sanitation services for all i
manner consistent with the protection. preservation. and revival of the quality of the country’s
water resources, and to adopt all needed measures to advance the right of the people to a
balanced and healthful ecology in accord with the rhythm and harmony of nature.

(c) Strengthen and coordinate integrated water resources management planning and
policy making 10 ensure sustainable and fair allocation and efficient use of water resources
among competing uses and users:

(d) Ensure that integrated water resources management is strongly coordinated with
Jand use and coastal and multi-hazard planning and management:

(e) Develop sustainably. and manage water sources and water resources toward water
security. taking into consideration water. land, and related resources aimed at increasing water
dependability for different uses, optimizing economic henefits and social welfare without
compromising the sustainability of vital environmental systems;

Page 17


(f) Strengthen and coordinate policy making and planning towards ensuring the
availability of water for food security and energy security, as well as towards the protection of
communities and environments against flood and other water induced hazards including
sediment hazards,

(g) Ensure that the strategy for water resources development and conservation is
participatory. and that planners, policymakers and users including community members are
involved at all levels:

(h) Develop a standardized pricing framework for water use that accounts for
environmental externalities: and.

(i) Ensure that all sources of water, including surface water, groundwater. rainwater and
floodwater are identified. mapped, monitored, conserved and managed for productive use and
the resulting wastewater is managed properly, reused, and responsibly disposed of following
approved environmental standards.

SEC.8, Powers and Functions of the Department. — The Department shall have the
following powers and functions:

I. Policymaking and Planning
(a) Ensure that Integrated Water Resources Management (IWRM) is adopted as the

strategic framework for water management policy making and planning in the country and
coordinate the implementation, promotion, revision and enhancement of IWRM plans:

(b) Formulate policies. strategies, and targets in coordination with other relevant entities
to meet the goals and objectives for water supply and sanitation. water quality, irrigation.
hydropower, flood control, stormwater utilization. and urban drainage. Such policies shall,
among other guidelines. integrate the issues of water and sanitation. food security, energy.
environment and flood control, and climate change:

(c) Formulate and develop policies to promote universal access to safe. adequate,
affordable. and sustainable water supply. and improved sanitation services for all Filipinos;

(d) Regularly update, every five years or as deemed necessary by the Department, and
in consultation with other agencies and stakcholders. the NWRMP following the IWRM
framework and integrate therein a national land use plan:

(¢) Undertake river basin survey. inventory and appraisal of water and related resources.
and develop comprehensive basin-wide plans of storage. retardation, and control to maximize
conservation and multipurpose use of water in the basin;

(f) Conduct continuing hydrological and hydrometeorological surveys and studies of
the country”s renewable water supply. and establish, operate. and maintain observation station
networks with a view towards formulating long-ierm policies to balance the sustainability and
‘optimal multiple use of water resources. defining the hydrologic boundaries of basins of the
existing water supply sources and developing or updating and implementing countrywide
comprehensive basin-wide master plans;

Page | &


(g) Strengthen and coordinate policy making and planning for flood management,
integrated with stormwater or urban drainage and appropriate retention or retarding basins in
order to harvest and reuse water, and to plan against, prevent, and minimize the detrimental
and catastrophic effects of flooding;

(h) Assist and provide the National Economic and Development Authority (NEDA)
‘with the required data and input from the water sector in the formulation of the country’s short-
term and long-term strategic development plans and actions, and recommend to the NEDA
Board the adoption of general policies and guidelines for water resources development;

(i) Review, approve, and provide oversight over all water-related development plans
and programs of any agency within the context of the NWRMP, and overall national plans and

Programs;

(i) Develop and implement, in coordination with other relevant agencies, effective
codes, standards. benchmarks, and reasonable guidelines to ensure the safety of all public and
private water structures in the country. and assure efficiency and proper quality in the
construction of water, sanitation, irrigation, hydropower, flood control and drainage
infrastructure;

(k) Ensure that gender equality, social inclusion. environmental protection, climate
resiliency, and disaster risk reduction are integrated into any water resource management
planning, policy making, and the design and construction of water infrastructure:

(1) Ensure that the planning and design of water infrastructure considers the highest
efficiency and most appropriate technology and quality, in accordance with national
development objectives;

(m) Review existing guidelines appropriate for private sector participation in the water
sector and submit recommendations to the Public-Private Partnership (PPP) Center of NEDA
and other concemed agencies to promote and enable more PPPs in the sector;

(n) Build a central repository of water data and effect inter-sectoral, inter-agency, and
inter-departmenta! coordination on all aspects of data gathering and management for water
resources development planning and compel the submission of statistics and data on water
utilization with the aim of operationalizing the integrated approach to water resources
management;

(0) Ensure the effective implementation of all the provisions of Republic Act No. 9275,
Presidential Decree No. 1067, and Sections 9, 10, 11, 12. & 13, Chapter Il of Presidential Decree
No. $56, otherwise known as the Cade an Sanitation of the Philippines:

{p) Promote Philippine participation in information sharing and education on best
practices in support of international efforts to achieve universal access to safe water and
improved sanitation: and the integration of water, energy, environment and food security; and

(q) Issue and promulgate rules, regulations and guidelines as may be necessary to
implement and enforce its powers and functions under this Act.

Page| 9


I. Resource Regulation

(a) Manage and conserve the country’s water resources to ensure the optimal use thereof
for domestic water supply, sanitation, irrigation, bydropower, navigation, food control, and
recreation purposes, and enhance and maintain water quality, conserve watersheds, control
water pollution, and restore the environment, without compromising the natural ecosystem
functions and services;

(b) Regulate and control the utilization, abstraction, diversion and development of water
resourees, taking in consideration their equitable distribution among competing demands and
determine the standards of beneficial and priority uses of water in times of crisis and national
emergencies;

(c) Formulate, promulgate, and enforce rules and regulations for the development and
‘optimum use of water resources and its administration and management, including coherent
water protocols, operating rules of all existing and future water infrastructure; general criteria,
methods and standards for basic data collection and project identification, formulation and
planning, and appropriate sanctions to be imposed for non-compliance;

(d) Regularly review regulations prescribed by any government agency pertaining to
water use, exploitation, development, and conservation or protection of waters, water
resources, and watershed or basin areas with respect to this Act;

(©) Impose fees or charges, as may be deemed necessary for water resources
conservation and protection, such as:

(1) Polluter's Fee, which shall be based on the net waste load depending on the
wastewater charge formula pursuant to Republic Act No. 9275;

(2) Raw water price, which shall take into account, among others, the scarcity of
water; and

(3) Appropriate payment structures for environmental services:

(f) Deputize LGUs to collect the nationol fees or charges for resource regulation within
their respective jurisdictions:
(g) Collect, regularly update, monitor. and analyze water resources data including

climatology, hydrological and other water-related data and ensure that such data is easily
accessible by relevant and authorized users;

(h) Establish, operate, and maintain observation station networks and s centralized
water resources data center for the scientific survey and appraisal of surface and groundwater

potentials of the country, and determine the annual renewable water available per water
resources region:

(i) Maintain 2 database that will contain updated relevant information on water data
which will be accessible by relevant and authorized users;

{{) Develop and continuously update a computerized decision support system that

Page | 10


incorporates data management systems relating to acquisition and database, model hase in
terms of physical design, planning and decision models. and user-friendly interface conceming
graphical and visualization tools;

(k) Conduct and promote special studies and research on water cconomics and other
water resources development and management issues and concems such as climate change,
weather modification, flood monitoring and modeling, environmental quality and desalination;
and

(1) Raise public awareness through information, education and communications
programs, and build capacities for informed participation in water resources management at
the national and river-basin level.

ITI, Institutional Arrangement with Public Water Organizations

{a) Develop guidelines including rules of partnership, between and among the
Department. field offices of national government agencies, LGUs and other stakeholders in
water resource management, and facilitate the establishment of multi-stakeholder river basin
organizations (RBOs) per river basin, and strengthen and support existing RBOs and monitor
their activities;

(b) Develop materials for capacity building and training of prospective RBOs;

(c) Authorize its representatives or any deputized agent to enter any property of public
dominion with or without prior notice and consent, any private land, building or enclave,
whether inhabited or not. for the purpose of conducting hydrologic surveys and investigations,
including assessing and evaluating the conditions of water facilities installed, and determining
compliance with water laws and standards:

(d) Provide technical assistance to water users including farmers. communities, and
LGUs and other water service providers (WSP) whether directly or in coordination with other
agencies on all aspects of integrated water resources management:

(e) Respond to consumer complaints. and ensure the adequate promotion of consumer
interests;

(0) Deputize agents. whether from the public or private sector. to assist in the
performance of any of the powers and functions of the Department,

(g) Appoint. hire, and maintain adequate staff and personnel, advisers or consultants
with suitable qualifications and experience, as necessary, subject to existing rules and
regulations.

IV. Coordination

(a) Coordinate and integrate water resources development activities of the country
within the context of national plans and policies for social and economic development:

(b) Coordinate with other government agencies. universities. academe and private
professional groups in all aspects of data gathering. the conduct of special studies and research

in



on all related aspects of water resources management and development such as climate
change, environmental quality, desalination, and the development of operating strategies,
procedures, and protocols and accompanying computerized decision tools for major water
facilities;

(c) Coordinate with the concerned and relevant agencies engaged in flood control, flood
risk management, and drought risk management; and

(@) Coordinate proactively with LGUs to ensure the integration of water resources
development plans into their comprohensive land use plans (CLUPs), Comprehensive
Development Plans (CDPs) or Provincial Physical Framework and Development Plan
(PPFDP).

V. Other Functions

(a) Create when necessary, water resource subsidiaries, instrumentalities, and entities
to engage in water transmission, water distribution, waste water treatment and management,
and sanitation in accordance with existing relevant laws.

(b) Enter into contracts, joint venture agreements or understanding. public-private
partnerships, and memorandum of agreements or understanding, either domestic or foreign,
relating to investment and financing water-related projects, under such terms and conditions as
the Department may deem proper and reasonable subject to existing laws.

(c) Exercise such other powers and functions necessary or incidental to the effective
administration and management of the country’s water resources.

SEC, 9. Secretary of the Department of Water Resources, ~ The authority and
responsibility for the exercise of the mandate of the Department and for the discharge of its
powers and functions shall be vested in the Secretary of the Department, hereinafter referred
to as the Secretary, who shall:

(a) Advise the President on the promulgation of executive or administrative orders,
regulations, proclamations and other issuances relative to matters under the jurisdiction of the
Department;

(b) Establish the policies and standards for the operation of the Department pursuant to
the President's guidelines;

(c) Promulgate rules and regulations necessary to carry out the objectives, policies, and
functions of the Department;

(d) Exercise supervision and control over all bureaus and offices under the Department;
(e) Supervise all attached agencies and corporations in accordance with law:
(£) Represent the Department in contracts, awards, and other similar agreements;

(g) Delegate authority for the performance of any power or function, as defined herein
to officials and employees under his direction as deemed appropriate;

Page | 12


(h) Act as the Chairperson of the governing board of the attached agencies of the
Department;

(i) Designate and appoint officers and employees of the Department, excluding
the Undersecretaries, Assistant Secretaries, and Regional and Assistam Regional Directors, in
accordance with the civil service laws, rules and regulations; and

(j) Perform such other duties and responsibilities as may be provided by law.
SEC. 10. Office of the Secretary, - The Office of the Secretary shall be composed of
the Secretary, Undersecretary, Assistant Secretary and the Secretary's immediate staff,

SEC, 11, Undersecretaries. — The Secretary shall be assisted by not more than five (5)
Underseeretaries, who shall be appointed by the President upon the recommendation of the
Secretary namely: Undersecretary for Resource Regulation and Governance, Undersecretary
for Inland Waters and Water for Agriculture, Undersecretary for Resource Development,
Undersecretary for Planning and Policy and Undersecretary for Missionary Water, Indigenous
People, and Special Concerns.

The Secretary is hereby authorized to delineate and assign the respective functional
areas of responsibility of the Undersecretaries in accordance with the mandate and objectives
of the Department; Provided, That no Undersecretary shall be assigned purely to administrative
responsibilities. Within their respective functional areas of responsibility, the Undersecretaries
shall;

(a) Advise and assist the Secretary in the formulation and implementation of the
policies, plans, programs and projects of the Department;

(b) Supervise all the operational activities of the assigned units for which the
Undersecretary is responsible to the Secretary; and

(©) Perform such other functions deemed necessary as may be assigned or delegated by
the Secretary to promote efficiency and effectiveness in the delivery of public services or as
may be required by law: Provided, That the Undersceretary for Planning and Policy shall, in
coordination with the Planning and Policy Service. be primarily responsible for advancing
current efforts in attaining the ultimate goal of universal access to water supply and sanitation
systems, and sustainable management of water resources under the SDGs, and the integration
of water, energy, environment and food security.

SEC. 12. Assistant Secretaries. ~ The Secretary shall be assisted by six (6) Assistant
Secretaries 10 be appointed by the President of the Philippines upon the recommendation of the
Secretary: one each for Planning and Policy Service, Decision Support System Service,
Resource Regulatory Service, Compirollership and Financial Management Service, Legal
and Legislative Service. and Administrative and Human Resources Management Service.

No person shall be appointed Secretary, Undersecretary and Assistant Secretary of the
Department unless the person is a citizen and resident of the Philippines, of good moral
character, of proven integrity, competence and expertise in water resource management:
Provided. That at least one (1) of the Underseeretaries and at least two (2) of the Assistant

Page | 13



Secretaries shall be career officers.

SEC. 13, Organizational Snructure, ~ The Department shall be composed of the
following organizational units:

(a) Department Proper. ~ The Department shall consist of the Office of the Secretary,
the Offices of the Undersecretaries and Assistant Secretaries, the Internal Audit Office, the
Public Affairs Office, the Water Pollution Adjudication Board. the Planning and Policy
Service, Decision Support System Service. Administrative and Human Resources Service,
Legal and Legislative Service, Comptrollership and Financial Management Service, Resource
Regulation Service, and the Water Resources Regional Offices,

(b) Attached agencies, - The Department shall exercise administrative supervision over
the following agencies for purposes of policy and program coordination, monitoring. and
evaluation:

(1) The Local Water Utilities Administration (LWUA), whose mandate, powers,
and functions are defined in Presidential Decree No. 198, otherwise known as
the Public Water Utilities Act of 1973, as amended, shall be wansferred from
the Department of Public Works and Highways and attached to the Department.
It shall continue to primarily function as a specialized lending institution for the
promotion, development, and financing of local water utilities. In the
implementation of its functions, the LWUA shall:

(i) prescribe minimum standards and regulations in order to assure acceptable
standards of construction materials and supplies, maintenance, operation,
personnel training. accounting and fiscal practices for local water utilities;

(ii) furnish technical assistance and personnel training programs for local water
utilities;

(iii) monitor and evaluate local water standards: and

(iv) effect system integration, joint investment and operation, district
annexation and de-annexation whenever economically warranted as
amended by Sec. 22, Presidential Decree No, 768.

(2) The Metropolitan Waterworks and Sewerage System (MWSS), whose mandate,
powers, and functions are defined under Republic Act No. 6234. as amended
entitled. 4m Act Creating The Metropolitan Waterworks And Sewerage System
And Dissolving The National Waterworks And Sewerage Authority: And For

;. Shall be transferred from the DPWH and attached 10

"d, That the MWSS shal! continue to facilitate the

exercise by the concessionaires of their responsibility; carry out accounting and

notification functions; monitor, report. and administer loans; perform related
functions in connection with existing projects; manage and dispose its retained
assets; and manage and operate the Umiray-Angat Transbasit: Project.

(3) The National Irrigation Administration (NIA). whose mandate. powers. and
functions are defined under Republic Act No. 3601 as amended by Presidential

Page | 14


Decree No. 552 andPresidential Decree No. 1702;

(4) The Laguna Lake Development Authority (LLDA). whose mandate, powers and
functions are defined under Republic Act No. 4850, as amended entitled, An Act
Creating The Luguna Lake Developmem Authority. Prescribing lis Powers.
Functions And Duties, Providing Funds Therefor, And For Other Purposes
shalt be transferred from the DENR and attached to the Department. The LLDA
shall continue to serve as the lake management and development authority
similar to a multi-stakeholder river basin organization and shall ensure the
implementation of the Laguna Lake Master Plan which shall be updated by the
Department to ensure alignment with the NWRMP.

Any other agency performing water resources management, conservation and
protection functions may be transferred to the Department as the President
deems necessary.

(c) Offices, Functions and Personnel to be Completely Subsumed under the
Department. ~ The following offices with their powers. functions, personnel, applicable funds
and appropriations, records. equipment and property shall he subsumed under the Department:
‘The National Water Resources Board (NWRB) with all its divisions and sections. whose
mandate, powers and functions are provided in Presidential Decree No. 424, as amended; The
River Basin Control Office (RBCO) of the DENR whose mandate. powers and functions are
provided in Executive Order No. $10 and Executive Order No, 816, as amended; The Manila
Bay Coordinating Office (MBCO) of the DENR which was strengthened by virtue of DENR
Administrative Order (DAO) 2011-01 to coordinate the efforts of the fourteen (14) national
agencies covered by the Mandamus Order of the Supreme Court to rehabilitate Manila Bay;
‘The Water Resources Management Division of the Bureau of Soils and Water Management of
the Department of Agriculture (DA); The Water Supply and Sanitation Unit of the Department
of the Interior and Local Government (DILG); and The Water Quality Management Section of
the Environmental Management Bureau (EMB) of the DENR.

(d) Functions to be Transferred to the Department. ~ The following functions of the
respective agencies, bureaus, and units shall be transferred to the Department:

(1) The hydrological surveys and groundwater mapping function of the Mines and
Geosciences Bureau (MGB) of the DENR:

(2) The hydrological surveys monitoring of stream flow and water data collection
function of the Bureau of Design and Bureau of Research and Standards of the
DPWH:

(3) The protection and conservation of natural wetlands such as lakes, marshes.
swamps of the Biodiversity Management Bureau of the DENR: and

(4) The planning. programming. administration, monitoring. management of the
National Sewerage and Septage Management Program (NSSMP) by the
DPWH.

(5) The flood management planning and sediment management function of the
Flood Control Management Cluster of the DPWH;

Page | 15


(6) The Water Resource Management Division and the water research functions of
the Soils and Water Research Division of the Bureau of Soils and Water
Management under the DA. All soil-related functions shall be retained under
the Bureau which shall be renamed as the Bureau of Soils,

(e) Support Services - The Department shall create the following support services:
(1) The Planning and Policy Service shall provide the Department with the
capability to undertake water infrastructure development planning and
programming, and shall exercise the following functions:
(i) Advise the Secretary on all matters relating to water resources planning;

(ii) Assist the Undersecretary for Planning and Policy on all matters related to
the specific functions of the position;

(ii) Formulate strategies and priorities for water resources management
and development consistent with national development objectives, and
initiate or undertake relevant surveys for development planning:

(iv) Develop and regularly update a comprehensive and integrated National
Water Resources Management Plan and ensure its integration into existing
land use plans;

(x) Coordinate river-basin planning following the integrated water resources
management framework and the river-basin approach;

(vi) Formulate or update existing River Basin Master or Comprehensive Plans
which includes all aspects of water management and development such as
water supply and sanitation, irrigation, flood control and stormwater or
urban drainage, drought risk management, water resouree development
systems and other public water works projects, including phasing of
implementation;

(wil) Identify, based on the river basin master plan, priority packages for water
re development per river basin, including water supply.
sanitation, irrigation, flood control and stormwater or urban drainage,
drought risk management, water resource development systems and other
public works projects, package project proposals for funding and prioritize
project implementation and the allocation of funds and other resources and
undertake or supervise and evaluate the conduct of feasibility studies and
project preparation thereof;
(viii) Evaluate and appraise all regional and inter-regional infrastructure water
development plans and programs as to their feasibility and consistency with
approved strategies and medium and long term plans:

(ix) Gather, analyze, and organize needed statistical data and information;

Page | 16


(x) Provide technical assistance related to its functions t@ the other services.
bureaus and the regional offices as needed;

(xi) Develop general criteria and standards on project investigation,
formulation, planning:

(xii) Develop guidelines and standards on social inclusion in water
resources management and ensure policies. programs and plans are
compliant with the gender and development framework of the
government:

(xiii) Coordinate closely with PAGASA for rainfall and other climate data
Which shall be considered in the planning for water resources
development and management and for various water infrastructure; and

(xiv) Perform such functions and activities. as may be mandated by law, which
are necessary for the effective attainment of the abovementioned
objectives.

(2) The Decision Support System Service shall provide the Department with water
resource management tools and computerized decision support system that
incorporates a data management system relating to acquisition and database and
model base in terms of physical design, planning and decision models including
services related to networking, data management, and information and
knowledge or learning management systems for administrative and non-
technical support It shall provide the Secretary timely reports on the status of
various Department projects and activities, For this purpose, it shall exercise the
following functions:

(i) Provide the Secretary the necessary data and processed information to aid in
policy and management decisions under the mandate of the Department:

(ji) Publish available real-time raw water data as well as verified or validated

water data in print or electronic form using latest internet technology,

(ii) Conduct and publish in print and/or electronic form, standard data analysis
such as basic statistical analysis. trend analysis. analysis of runs, and cluster
analysis:

(iv) Develop and continuously update water resource management.
computerized decision support systems (DSS) that incorporate data
management systems relating t© acquisition and database. model base in
terms of physical. design, planning and decision models. and user-friendly
interface such as graphical and visualization tools, The DSS is composed
of: 1) a measurement or data acquisition system; 2) information or database
management system; 3) analytical and numerical models for design.
planning. decision or evaluation purposes, and 4) a user-friendly interface
which includes graphical interface or visualization tools.

(v) Develop and maintain specific models to include the following:

Page | 17


a) long-term climatologic and weather forecasting model;

b) watershed models and river-floodplain models:

¢) groundwater models and coupled to surface water models;
d) flood forecasting model for major rivers:

©) optimization-simulation management models for watershed conservation.
conjunctive surface and groundwater use, irrigation scheduling, normal
and emergency operations of multi-purpose reservoirs; and

) water quality and ecological models.

(vi) Develop and administer the management information system and
knowledge systems of the Department to:

a) Retrieve. process, and monitor information on all projects and activities
in the web portal:

b) Conduct and apply systems and process engineering. software
development. software configuration management:

‘c) Develop and manage its corporate database, unified database for water
industry. data warehouse. other watcr information resources, library
services and document management and archiving services;

4) Develop and manage its Information and Communications Technology
(ICT) infrastructure and ICT related-services including computer
networking and voice communications services and data exchange, and

€) Manage the literacy and training services of the Deparment on various
1CT and Knowledge Management (KM) tools and applications, including
information and knowledge management.

(vii) Perform such other related functions and activities which are necessary for
the effective administration of the management information and knowledge
systems of the Department,

(3) The Administrative and Human Resource Service shall provide the Department
with services relating to human resources development. personnel, records.
facilities maintenance. medical and dental. security. property and procurement
services, and shall exercise the following function:

(i) Advise the Secretary on all matters relating to internal administration and
human resources management;

(ii) Prepare and implement an integrated personnel development plan that shall
include provisions for merit promotions, performance evaluation, job

Page | 18


rotation, incentive awards systems, and health and welfare services:

(iii) Provide services related to human resource training. education and
development including manpower, carcer_ planning and forecasting, and
development of indigenous training materials;

(iv) Develop. establish. and maintain an efficient and cost-effective property
procurement system and facilities and coordinate or otherwise interface with
relevant agencies, whether government or private, for the purpose of
developing or upgrading the system:

(v) Develop, establish, and maintain an efficient and effective security system
covering, among others. personnel. physical installations, facilities.
equipment. documents and materials including the conduct of security
investigations;

(vi) Coordinate with the appropriate government agencies for a more efficient
conduct of administrative processes;

(vii) Develop, establish, and maintain an efficient records system:

Provide assistance in its area of specialization to the Department Proper,
‘bureaus and regional and water district offices and. when requested. to the
government agencies and corporations attached to the Department; and

(ix) Perform such other related functions and activities which are necessary for
the effective management of the resources of the Department, including its
human resources.

(4) The Legal and Legislative Research Service shall provide the Department with
services on such legal affairs as contract letting and litigation, legal and
legislative research, complaints and investigation, legal counselling and other
matters of law, and shall exercise the following functions:

(i) Advise the Secretary on all matters relating to legal and legislative affairs:

(ii) Prepare Department contracts and legal instruments. review and interpret all
contracts and agreements entered into by the Department and evaluate all
legal proposals:

Gi) Conduct administrative investigation and the review of administrative
charues against officers and employees of the Department;

(iv) Exercise functional jurisdiction over the legal staffs of Regional Offices:

(v) Provide legal assistance to the Department Proper, the bureaus and regional
offices and when requested, the attached corporations:

(vi) Develop and prepare the Department's Legislative Agenda, recommend
presidential certification of the urgency of priority water bills, and other

Page | 19


water-related legislation;

(vil) Coordinate and maintain linkages between and among the various offices,
bureaus, regional offices and attached agencies 10 the Department along
with other government agencies on policy matters affecting the
Department's mandate in relation to legislation;

(viii) Perform liaison and networking activities in relation to the enactment of
related laws relating to water resources issues in legislative policymaking
bodies such as the Senate of the Philippines, the House of Representatives,
and the various Sanggunians;

(ix) Monitor the progress of the Department's priority or certified bills to ensure
their passage; and

(x) Perform such functions and activities, as may be mandated by law, which
are necessary for the effective performance of the abovementioned
objectives.

(5) The Comptrollership and Financial Management Service shall provide the
Department with coordinated services relating to financial systems and
procedures, budget, cash, accounting and all financial housekeeping matters.
and shall exercise the following functions:

i) Advise the Secretary on all matters relating to the accounting of government
expenditures and reccipts, budgeting and cash management, project finances
and financial systems and procedures,

Gi) Prepare budget proposals and pursue formal budget authorizations,
undertake budget execution, and prepare and submit all appropriate reports
to the proper offices;

(iii) Develop and maintain accounting, financial and assets management
systems, procedures and practices in the Department Proper, Bureaus and
Regional Offices;

{iv) Review and appraise systems and procedures, organizational structure.
assets management practices, accounting, and other records, reports, and
performance standards such as budgets and standard costs of the
Department, bureaus, and regional offices;

(®) Provide assistance in its area of specialization to any unit of the Department
and, when requested, to government corporations and councils attached to
the Department; and

(vi) Perform such other related functions and activities which are necessary for
the effective financial management of the Department.

(6) The Resource Regulation Service shall provide the Department with services for
the effective regulation of all water-related services and activities and shall

Page | 20


exercise the following functions:
(i) Advise the Secretary on all matters relating to resource regulations;

(ii) Determine, grant and regulate water rights for the appropriate, optimal and
sustainable use of surface and ground water,

(iii) Determine and evaluate waterworks and sewerage licenses, and submit
evaluation results to the Water Regulatory Commission for the latter's
consideration in granting of licenses:

(iv) Investigate violations of the water rights and the Water Code. and impose
the appropriate sanctions in accordance with existing laws, rules and
regulations as well as future rules and regulations which the Department

shalt promulgate;

(v) Adjudicate water use conflicts; and
(vi) Perform such other related functions and activities which are necessary for
the effective regulation of water-related services.

(7) The Internal Audit Service shall regularly conduct # comprehensive audit of
various Department activities and shall exercise the following functions:

(i) Advise the Secretary on all matters relating to management control and
operations audit:

(ii) Conduct a performance audit of the management and operations of the
Department, its activities. the performance of all units. and determine the
degree of compliance of all operating units with established objectives.
policies, standards. methods and procedures. government regulations and
contractual obligations of the Department;

(iii) Review and appraise systems and procedures. organizational structure.
assets. management practices, accounting and other records, and
performance standards such as budgets and standard costs of the Department
Proper, bureaus and regional offices;

{iv) Analyze and evaluate management deficiencies and recommend realistic
courses of action: and

(v) Perform such functions and activities. as may be mandated by law. which
are necessary for the effective performance of the above memioned
objectives.

(8) The Public Affairs Service shall enhance relations with all stakeholders

including the media, for the effective dissemination of information relating to
lated issues. including important announcements on policies and
ities of the department that are of interest to the general public. It shall
‘ensure that women. men. elderly. and people with disabilities shall be consulted.

Poge | 21


organized and take active part in all aspects of water resources development and
management activities, It shall also lead the planning and organizing of special
vents, and shall exercise the following functions:

(i) Public Awareness

a)
b)

e)

d)

e)

g)
hy)

D

Advise the Secretary on matters pertaining to public affairs;

Develop and supervise the implementation of comprehensible
communications programs on relevant policies, programs and plans of
the Department:

Produce and supervise the dissemination of communication materials in
line with the priorities of the Department and national government
public information programs:

Conduct public opinion and attitude surveys to identify the interests and
concems of the stakeholders of the Department:

Establish policies on the presentation and publication of the content of
the communication materials for dissemination to print and broadcast
media;

Establish and maintain linkages with the tri-media and a presence in
social media:

Coordinate the conduct of interviews and news conferences;

Make public announcements on matters relating to the work and
activities of the Department through the print and broadcast media.
cither through press releases or live interviews;

Coordinate with various Department units. concerned government
agencies. tri-media and other stakeholders on matters related to the
above-enumerated functions; and

Coordinate with the appropriate national government agencies involved
in public information affairs.

(ii) Promote Participation

a)

b)

¢)

Conduct public consultations and discussions;

Develop and disseminate relevant and appropriate materials and
programs for public information and education, as well as advocacy

campaign:

Conduct seminars and workshops involving the LGUs and the general
public on current water issues and problems; and meaningful
participation in the Department's policy making. planning,

Page | 22


development and implementation of various programs and projects.

special Events

a) Coordinate the organization and promotion of special events and water
exhibits;

'b) Actas the focal office for all water related events; and

¢} Perform such functions and activities, as may be mandated by law,
which are necessary for the effective performance of the
abovementioned objectives.

(A Bureaus, — The Department shall create bureaus which shall cach be headed by #
Bureau Director. The Bureau Director shall be responsible for the efficient and effective
discharge of the functions of the Bureau concerned. The Bureau Director shail be assisted by
one (1) Assistant Director.

(1) Bureau of Flood Control and Drainage shall plan and design flood control and
drainage structures and facilities in according with technical standards.
guidelines and manuals. For this purpose. it shall have the following duties and
responsibilities:

(i) Formulate policy, strategies and programs on flood risk management in the
context of integrated flood management (IFM) which integrates water, land
coastal zone and multi-hazard management. In integrating land use planning
and water management, the Director. The Burcau Director shall be
responsible for the efficient and effective discharge of the functions of the
Bureau concemmed. The Bureau Director shall be assisted by one (1)
Assistant Director. (1) Bureau of Flood Control and Drainage shalt plan
and design flood controt and drainage Department shall harmonize and
synthesize plans to enable the sharing of information between land-use
planning and water management authorities. In this regard, a holistic
approach shall be adopted by making the IFM a part of a wider risk or multi-
hazard management system that includes earthquakes. landslides. fires.
‘tsunami, and other calamities of the same gravity or nature:

(ii) Integrate climate change and disaster risk reduction and management in
policies and plans;

(iii) Prepare master plans of flood management and drainage in river basins in
coordination with the concerned water resources region and river basin
organizations:

(iv) Prepare master plans for urban drainage in cities and municipalities:

(v) Prepare feasibility studies of recommended measures in the master plans;

(vi) Plan and design structural measures for flood control and drainage:

Page | 23


(vii) implement and collaborate with concerned agencies on the formulation and
adoption of non-structural measures for flood control and drainage;

(viii) Patrol and investigate rivers, and monitor stream flows;

(ix) Conduct post-disaster investigation and evaluation and damage assessment
of flood infrastructures after extreme events;

(x) Conduct research and development on water and sediment-related disasters:

(xi) Develop design guidelines, criteria, and standards on flood control and
drainage structures;

(xii) Provide technical assistance to other agencies, LGUs, and other
stakeholders;

Advise the Secretary on declaring flood control areas and recommended
guidelines for floodplain management plans in these areas; and

(xiv) Perform such related activities which are necessary for the effective
performance of its functions.

(2) Bureau of Water Quality Management shall supervise and exercise control over
all aspects of water quality management to ensure the sustainability of the
country’s water resources and the protection of the environment. It should take
into account proper and integrated treatment of freshwater and wastewater
within the whole process, For this purpose, the Bureau shall exercise the
following functions:

() Establish water quality guidelines for freshwater and coastal or marine waters
as basis for classifying water bodies in the country. Specifically, develop
water quality indices or composite metrics to measure the quality status and
health of natural water bodies in relation to ecological integrity and function;

(ii) Establish efMuent standards for point discharges to receiving bodies of
water,

(iii) Establish internationally accepted procedures for sampling and analysis:

(iv) Prepare an integrated water quality management framework:

(v) Prepare the ten-year water quality management plans for each water quality
management area as part of the River Basin Master Plans and in support of
the NWRMP;

(vi) Classify groundwater sources and prepare a national groundwater
vulnerability map:

(vii) Classify or reclassify all water bodies according to their beneficial usages
using the established water quality guidelines established;

Page | 24


(viii) Issue permits, clearances, and similar instruments pursuant to the Clean
Water Act of 2004;

(ix) Collect the wastewater discharge fees for all permittees;

(x) Monitor the compliance of water discharge permittees with the effluent
standards;

(xi) Regularly monitor the water quality of major water bodies in the country
and analyze the data to identify possible sources of pollution:

(xii) Issuc notices of violations and/or cease and desist orders for those found in
violation;

(xiii) File the needed cases against violators with the Water Pollution
Adjudication Board (WPAB);

(xiv) Serve as secretariat of the WPAB; and

(xy) Perform such functions and activities, as may be mandated by law, which
are necessary for the effective performance of the above mentioned
objectives.

(3) A Water Resources Regional Office (WRRO) shall be organized per water
resources region and shall be responsible for implementing the mandates,
powers and duties of the Department at the field level, except for policymaking
which will be vested solely in the Department. The formulation of the master
plan for the nearby river basins such as the Pasig-Marikina-Laguna Lake-
Cavite, shall be the responsibility of the Department. Each WRRO shall perform
the following duties and responsibilities:

(i) Formulate or update and coordinate the river basin master plans for river
basins within its jurisdictions ensuring consistency with the National Water
Resources Management Framework Plan;

(ii) Advocate and strongly support the creation and fanctioning of multi-
stakeholder river basin organizations (RBOs) and serve as the secretariat of
the said RBOs;

(iii) Undertake and evaluate the planning, design. and work supervision
functions of the Department for the water infrastructures within the region;

(iv) Ensure the implementation of laws, policies, programs, rules and
regulations regarding the above mentioned infrastructure as well as public
and private physical structures;

(¥) Provide technical assistance related to the water-related functions of other
agencies within the region especially the local goverment;

Page | 25


(vi) Coordinate with other departments, agencies, institutions and organizations,
especially local goverment units within the region in the planning and
implementation of the river basin master plans;

(vii) Conduct consultations with the local communities, take appropriate
measures to ensure that the services of the Department are responsive, and
recommend such appropriate actions as may be necessary; and

(viii) Perform such functions and activities, as may be mandated by law, which
are necessary for the effective performance of the above mentioned
objectives. The Department shall retain existing Project Management
Offices as may be required, which shall be under the supervision and control
of the appropriate Water Resources Regional Office unless otherwise
determined by the Secretary for reasons of supra- regional scope, magnitude
and multi-functional coverage.

Each Water Resources Regional Office shall be headed by a Water Resources Regional
Director who shall be responsible for efficiently and effectively carrying out the duties and
responsibilities of the Office, Towards this end. the Water Resources Regional Director shall
exercise functional and administrative supervision over all units within the region and is
authorized to commit resources and assign personnel to integrated regional water resources
management, water supply and sanitation management. and flood control and flood risk
management initiatives, The Water Resources Regional Director shall also perform such other
related duties and responsibilities as may be assigned or delegated by the Secretary or as may
be required by law, The Water Resources Regional Director shall be assisted by two (2)
Assistant Water Resources Regional Office Directors who shall exercise supervision over (1)
the planning, project design and evaluation function and (2) technical assistance to the River
Basin Organizations within the water resources region.

SEC. 14, Water Pollution Adjudication Board, ~ There is hereby created a Water
Pollution Adjudication Board under the Office of the Secretary. The Board shall be composed
of the Secretary as Chairperson, two (2) Undersecretaries as may be designated by the
Secretary, the Director of Water Quality Management Bureau, and three (3) other
representatives from other stakeholders to be designated by the Secretary as members. The
Board shall assume the powers and functions of the National Pollution Control Commission
with respect to the adjudication of water pollution cases under Republic Act No. 3931 entitled,
An Act Creating The National Water And Air Pollution Control Commission, Presidential
Decree 984 emitled Providing For The Revision Of Republic Act No, 3931. Commonly Known
as the Pollution Control Law, And For Other Purposes, particularly with respect to Section 6
letters e, fg, j,k and Republic Act No. 9275, The Bureau of Water Quality Management shall
serve as the Secretariat of the Board. These powers and functions may be delegated to the field
officers of the Department in accordance with rules and regulations to be promulgated by the
Board.

CHAPTER ILI
INTERDEPARTMENTAL RELATIONS AND
INSTITUTIONAL ARRANGEMENTS OF THE DEPARTMENT

SEC. 15. Interface and Institutional Arrangements with Other Agencies. ~

Page | 26


(a) The Department of Health (DOH) shall continue to have primary authority and
responsibility for setting and enforcing drinking water quality standards. The Department shall
coordinate with the DOH in this aspect, and sball ensure consistency of standards and targets,
as well as the compliance of permittees with mandated standards;

(b) The Department of Environment and Natural Resources (DENR) shall continue to
have primary authority and responsibility for protecting the environment and managing the
country’s watersheds;

(c) The Department of Energy (DOF) and the National Power Corporation (NPC) shall
continue to have primary authority and responsibility for establishing and operating
hydropower plants, but shall ensure that hydropower plant development plans are consistent
with the National Water Development and Management Plan;

(d) The Department shall coordinate with the DA to ensure agricultural development
that reduces long-term pollution for surface water and groundwater. and agricultural and
industrial economic development that employs water efficiency, water recycling or reuse, and
the appropriate treatment of wastewater;

(c) The Department shal! coordinate with the National Disaster Risk Reduction
Management Council (NDRRMC) to ensure that its plans and designs for flood control, flood
risk management and drought risk management are aligned with the objectives and plans of the
Department;

(f) The Department shall coordinate with Climate Change Commission (CCC).
Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA},
and National Mapping and Resource Information Authority (NAMRIA) for scientific studies,
integrated surveys, mapping, charting, and decision support systems

(g) The Department shall coordinate with the Department of Tourism (DOT) on
recreational use of water resources;

(h) The Department shall coordinate with the Philippine Reclamation Authority and
economic zone authorities on water resources development and water requirements within
reclamation areas and economic zones, respectively; and

(i) The Department shall coordinate with relevant government agencies, including local
‘government units (LGUs), with respect to development projects and shall ensure cross-cutting
collaboration between and among all water subsectors and facilitate inter-agency subsector
coordination, strategic development, planning, monitoring and provision of technical,
institutional and financial capacity building support to their different stakeholders at the water
subsector level.

SEC. 16, National Water Sector Policy Board. - The National Water Sector Policy
Board (NWSPB) shall be created and shall be headed by the Secretary of the Department of
Water Resources with the Secretary of the National Economic and Development Authority as
the Vice-Chairperson, and the Secretaries of the DOH, DILG, DOE, DA, Department of Social
Welfare and Development; DPWH; Department of Budget and Management (DBM); Office
of the President, and DENR, and National Commission on Indigenous Peoples as members.
The Department shall provide personnel to serve as Secretariat to the Board,

Page | 27


SEC. 17. Powers and Functions of the National Water Sector Policy Board — The
NWSPB shall perform policymaking. coordination, integration, supervision, monitoring and
evaluation functions, and shall have the following responsibili

(a) Approve the NWRMP which shall serve as a principal guide to water management
efforts in the country and shall be reviewed every five (5)-years interval. or as may be deemed
necessary. in order to ensure its relevance to the times;

{b) Provide overall policy direction and recommend policies on water resources
requiring Presidential decision;

(c) Advise the President on the status of water management and supply, recommend to
the President the declaration of a state calamity in areas affected by water supply, and submit
proposals to restore normalcy in the affected areas:

(d) Ensure a multi-stakeholder panticipation in the development, updating, and sharing
of information systems as policy. planning and decision-making tools consistent with IWRM.

SEC.18. Transfer of Rights and Obligations. — The Deparment shall. by virtue of this
Act, be subrogated to all the rights and assume all the obligations of the government agencies
and units whose powers and functions have been subsumed, absorbed, transferred or attached
to the Department in accordance with the rules and regulations of the Commission on Audit,
and the Civil Service Commission, and other applicable laws. The transfer of powers and
functions as herein provided shall take effect within six (6) months of the effectivity of this
Act, As such, all affected agencies. offices, units shall continue to function under their present
mandates.

CHAPTER IV
WATER REGULATORY COMMISSION

SEC.19. Water Regulatory Commission, ~ There is hereby created and established as
an independent, quasi-judicial regulatory body to be known as the Water Regulatory
Commission, hereinafter referred to as the Commission. which shall be organized within one
hundred twenty (120) days after the effectivity of this Act, The Commission shall be placed
under the administrative supervision of the Department as an attached agency. The
Commission shall have a Board of Commissioners. and shall be vested with powers and
fumetions, as conferred and set forth hereunder.

SEC. 20. The Regulatory’ Units. — The regulatory units of the Commission shall be
composed of the central regulatory unit and the regional regulatory units. The economic
regulatory units and functions of the MWSS. NWRB. LWUA. SBMA. PEZA, and TIEZA are
hereby transferred to the Commission, and shall collectively comprise its central regulatory
unit for water supply and sanitation services that: (a) provide services to more than one
province; and (b) are owned. operated and/or maintained by special economic zones and Metro
Manila concessionaires. The regional regulatory units shall be established by the Commission
in accordance with this Act and the rules. regulations. guidelines. and standards that the
Commission shall issue.

SEC. 21. Powers and Functions of the Commission, — The overall authority and powers

Page | 28


of the Commission shal] cover and apply to all service providers, whether private or public,
providing or intending to provide levels If & Il water supply, including suppliers to
subdivisions and er other service providers, sewerage, and/or septage treatment and disposal
services for domestic, residential, institutional, industrial or commercial use.

The Commission shall exercise the following powers and functions:

{a) Issue and promulgate rules, regulations end guidelines as may be necessary to
implement and enforce its powers and functions under this Act;

(b) Promulgate and enforce just and reasonable technical standards, classifications and
measurements of service;

(c) Establish rules and regulations to monitor, avoid, and provide remedies for any
market power abuse or anti-competitive or discriminatory act or behavior by or against any
participant in the water supply and sanitation sector. Upon finding that a market participant has
engaged in, or has fallen victim to such act or behavior, the Commission shall act to stop or
redress the same. Such remedies may, without limitation, include the imposition of price
controls, issuance of injunctions. requirement of divestment or disgorgement of excess profits,
invalidation of contracts and imposition of fines and penalties pursuant to this Act.

(a) Adopt and require that books, records, and accounts be Kept and maintained in
accordance with the prescribed uniform accounting system;

(e) Fix and determine proper and adequate rates of depreciation of properties and
equipment used in water supply and sanitation services;

(f) Impose and collect annual levies determined as a percentage of gross revenue
accruing in relation to the licensed activities, and reasonable fees and surcharges as may be
necessary for achieving the purposes, powers and functions of the Commission;

(g) Require the submission reports of finances and operations, verified under oaths by
the owner or president and secretary of the board of the licensee;

(h) Determine and require the monitoring and submission of such data, statistics and
other information from the regulatory units and any or all licensees es mey be necessary for the
effective and efficient exercise of its duties, functions, powers and responsibilities.

(i) Investigate, motu propio or upon a written complaint, any matter conceming the
‘operation of the service and issues on price manipulation and anti-competitive behavior:

(j) Impose penalties and fines against any licensee or against its owners, directors,
officers, agents or representatives for any violation of this Act or of the license, order, rule
regulation or requirement issued by the Commission;

(k) Require any licensee to pay the actual expenses incurred by the Commission in any
investigation if it shall be found that a licensee violated any provision of this Act or of the
license, order, rule regulation or requirement issued by the Commission;

(J) Advise, apprise and coordinate with other relevant agencies of the national or local

Page | 29


government on any matter relating to water supply and sanitation services;

(m) Deputize agents, whether from the public or private sector, to assist in the
performance of any of the powers and functions of the Commission;

{n) Appoint an interim or temporary management committee upon appeal and after due
hearing, to ensure continuity of service in case a licensee fuils to meet conditions of the license
and the concerned Regulatory Unit fails or refuses to appoint an interim management
committee as provided in the following section.

(0) Appoint, hice and maintain adequate staff and personnel, advisers, or consultants,
with suitable qualifications and experience, as necessary;

(p) Exercise original and exelusive jurisdiction over all cases contesting rates, fees,
fines and penalties imposed by the regulatory units in the exercise of their powers, functions
and responsibilities, as provided under this Act, and over all cases involving disputes between
and among participants or stakeholders in the water supply and sanitation services; and

(q) Such other incidental powers and functions as may be necessary to attain the
objectives of this Act.

SEC. 22. Powers and Functions of the Regulatory Units. ~ The regulatory units of the
Commission shall have the following powers and functions:

(a) Issue licenses authorizing the operation of water supply and sanitation services in
any specified area or areas within the Philippines.

(b) Impose fines, charges and other penalties upon any provider and/or its officers and
stockholders who shall fail or refuse to register or obtain a license prior to operation or
commencement of business, as provided hereunder.

(c) Review, determine, fix, and approve, consistent with the rules, guidelines,
procedures and methodologies which the Commission shall provide, proposed water and
sewerage and septage management tariffs. rates and charges that licensces may impose upon
their consumers;

(d) Appraise and value property and equipment used by licensees in providing water
supply and sanitation services.

(e) Enforce technical, financial, and other performance standards set by the
Commission for licensees or utilities:

(f) Respond to consumer complaints and ensure the adequate promotion of consumer
interests and investigate motu propio price manipulation and anti-competitive behavior;

(g) Investigate accidents directly or indirectly arising from or connected with the
maintenance or operation of the service, and make such order or recommendation as the public
interest may warrant;

(h) Require the review and/or approval of contracts or agreements that may impact on

Pare | 30


the tariff and rates of service provision entered into by service providers upon petition o mor
propio where in its determination public interest so dictates;

@ Require the submission of reports, plans, and other documents that define the
rep
performance targets of the licensees or utilities, and regular accomplishment reports:

(@ Impose and collect annual levies determined as a percentage of gross revenue
accruing in relation to the licensed activities, and reasonable fees and surcharges as may be
necessary for achieving the purposes, powers, and functions of the regulator;

(k) Conduct benchmarking and monitor the performance of licensees or utilities under
their jurisdiction, and publish reports detailing the results thereof, as may be necessary or
required by the Commission;

() Amend, modify, suspend, or revoke any license issued by them, after due notice and
hearing, on any of the following grounds: (1) when the facts and circumstances on the strength
of which the license was issued have been materially misrepresented or have materially
changed; (2) where the Hcensee has failed to meet or comply with terms, conditions, and
performance targets, including but not limited to service expansion, that may have been set in
the license; (3) where the licensee is found to be manifestly inefficient in the operation of or
provision of water supply and sanitation services in its area; or (4) when the licensee thereof
has violated of willfully refused to comply with any order, rule or regulation of the Commission
or any provision of this Act;

to ensure continuity of service in case
nd

(m) Appoint an interim management commi
a licensee fails to meet the conditions of the licer

(n) Submit performance plans and reports as required by the Commission.
SEC. 23. Composition of the Water Regulatory Commission. —

{a) The Commission shall be a collegial body composed of five (5) full-time members
consisting of a Chairperson and four (4) members, who shall all be appointed by the President
of the Philippines. All members of the Commission must be citizens and residents of the
Philippines, at least thirty five (35) years of age, and of good moral character, of recognized
integrity and competence in the field of law, business, commerce, finance, accounting or public
administration, water or utility economics, management, physical or engineering services,
hydrology and other related services, with at Jeast three (3) years of actual and distinguished
experience in their respective fields of expertise: Provided, That out of the four (4) members.
of the Commission, at least one (1) shall be a member of the Philippine Bar with at least ten
(10) years of experience in the active practice of law, and at least onc (1) shall be a certified
public accountant with at least ten (10) years of experience in active practice.

(b) The term of office of each member of the Commission shall be seven (7) years:
Provided. That among the members first appointed, the Chairperson shall serve for a period of
seven (7) years, two (2) members shall serve for five (5) years and the other two (2) members
shall serve for three (3) years; Provided further, That any member whose term has expired as
specified herein shall serve as such until a successor shall have been appointed and qualified:
Provided furthermore, That any appointment to fill a vacancy in the Commission arising from.
death, removal, retirement or resignation shall be made only for the unexpired term: Provided.

Page | 31


‘finally, That in no case shall any member serve for more than seven (7) years in the
Commission.

(c) The Commission shall mest as often as may be necessary on such days or days as
the Chairperson may fix, The presence of at least three (3) members of the Commission shall
constitute a quorum, which shall be necessary for the transaction of any business. The
affirmative vote of majority of the members of the Commission where a quorum is present
shall be necessary for the adoption of any order, resolution, decisions, or other act of the
Commission in the exercise of its quasi-judicial functions: Provided, That in promulgating
rules, regulations, guidelines and in exercising its quasi-legislative functions, an affirmative
vote of three (3) members shall be required.

(@) The Chairperson of the Commission shall exercise gencral executive control and
supervision over the Commission and its members, staff and personnel, agents and
representatives. Within three (3) months from the creation of the Commission and the
appointment of all Members of the Commission, the Chairperson shall determine and
establish the organizational structure and planiilla positions necessary’ to carry out the powers
and functions of the Commission, including those of the central and provincial regulatory units
subject to the review and approval of the DBM. The plantilla positions of the Commission
shall be filled by regular appointments in accordance with Civil Service laws, rules, and
regulations. Members of the Commission shall enjoy security of tenure and shall not be
suspended or removed from office except for just cause as specified by law.

(e) The Chairperson and members of the Commission or any of their relatives within
the fourth civil degree of consanguinity or affinity, legitimate or common law, shall be
prohibited from holding any interest whatsoever, either as investor, stockholder, officer or
director, in any company or entity engaged in provision of water supply and distribution,
septage management and sewerage services and must, therefore, divest through sale or legal
disposition of any and all interests in the water sector upon assumption to office.

SEC. 24. Secretariat of the Commission. - The Commission shall establish a Secretariat
which shall provide the Commission with technical and support services including the
following:

(a) Provide the necessary technical inputs and secretariat support to the Commission to
facilitate the conduct of its functions;

(b) Coordinate with Regulatory Units to ensure proper implementation of the rules,
regulations and guidelines promulgated by the Commission:

(c) Monitor and assess activities of the Regulatory Units vis-a-vis their respective
annual performance plans and targets;

(@) Maintain a database on the water supply and sanitation subsector: and

(e) Coordinate with other relevant agencies of the national ot local government on any
matter relating to water supply and sanitation.

SEC. 25. Executive Director. — The Commission shall appoint an Executive Director
who shall head the Commission Secretariat, keep and maintain the official records of the

Page | 32


Commission, render a report on the proceedings of the Commission, and administer oaths in
all matters falling within the jurisdiction of the Commission.

‘The Executive Director shal! be responsible for the effective implementation of the
policies, plans, programs, rules, regulations and directives of the Commission; coordinate and
supervise the activities of the different operating units under the Commission; and perform
such functions as may be assigned by the Chairperson and/or other members of the
‘Commission.

SEC. 26. Compensation and Other Emoluments, — The compensation of the members
of the Commission and its staff shal] conform to provisions of Republic Act No. 6758 as
amended, otherwise known as the Compensation and Position Classification Act of 1989,

CHAPTER V
REGISTRATION AND LICENSING

SEC. 27. Registration and Licensing of Ail Water Supply and Sanitation Services, ~ Al
water supply and sanitation service providers, including bulk water suppliers and those
providing scrvices to subdivisions and other service providers, shall register with the
Commission and, subject to such rules, guidelines, procedures and other issuances of the
Commission, obtain a license to operate from the appropriate regulatory units.

‘The Commission shall ensure that the grant and revocation of licenses are carried out
fairly, transparently, and without discrimination. Issuances of the Commission shall specify,
among others, the qualifications, requirements, and procedure for the grant and revocation of
licenses including the standards and performance targets that shall continuously be complied
with to keep the licenses valid,

Unless otherwise provided in this Act or by the Commission, no public water supply
and sanitation service provider shall commence or conduct the business of providing water
supply and sanitation services without first obtaining a license, Concession agreements and
other contracts for water supply provision and water sanitation and treatment services currently
existing shall remain valid and enforceable unless otherwise terminated, after due notice and
hearing for reasons provided in the existing terms and conditions under the concession or
service agreement or contract, or when invalidated by the Commission, after due notice and
hearing, where national security, national emergency or public interest so dictates,

SEC 28. Conditions of License. — The Commission or the concerned regulatory unit,
may impose such conditions on the licensee as it may deem necessary, such as:

(a) Tariffs, rates and charges that may be imposed from its customers or consumers.
(b) Term fixing the duration of the privilege.

(c) Grounds for modification, suspension or cancellation of the License.

(a) Minimum technical performance and service level standards,

(e) Expansion targets and service level improvements over time.

Page | 33


(8) Restrictions or conditions for transferability of the business or controlling interest in
the business.

(g) Reportorial requirements and obligations of the grantee.

{h) Submission to annual performance audit by the Commission or its duly authorized
representative(s}, The Commission shall specify the requirements and procedure for existing
holders of a Certificate of Public Convenience (CPC), Certificates of Public Convenience and
Necessity (CPCN) issued by NWRB, or Certificate of Conformance (CoC) issued by LWUA,
to convert their existing certificates into licenses to operate in accordance with Sec. 27 herein.
All existing providers of water supply and sanitation services without a legal and valid
Certificate of Public Convenience, Certificate of Public Convenience and Necessity, or
Certificate of Conformance shall register with the Commission and apply for a license within
six (6) months from the effectivity of this Act.

SEC. 29. Rights and Duties of Licensees, —

(a) Any person granted a license under this Act shal! have the obligation to ensure that
licensed activities are conducted to further public interest and, in particular:

(1) Foster the maintenance and development of efficient, coordinated, and viable
operation of their licensed activities;

(2) Ensure that their water supply and sanitation services are provided in a diligent,
conscientious and workmanlike manner, in accordance with applicable laws
rules and regulations issued by the Commission and the generally accepted
standards and practices of the water supply and sanitation industry; and

(3) Comply with drinking water quality requirements and standards that may be
established by the Commission.

(b) Any person granted a license under this Act shall, to the extent allowed by law and
specified in the license, have the right to acquire or lease land, lay or repair Water or sanitation
main Fines and other relevant facilities in public way’ to Fulfill the terms and conditions under
the license.

(c) Subject to any condition of limitation laid down in the license, a licensee may
discontinue water supply and sanitation services to a customer if such customer defaults in the
payment of fees duc to the licensee for the water supplied or sanitation services provided, or
for acts of pilferage pursuant to Sections 8. 9, 10, and 11 of Republic Act No. 8041, otherwise
known as the Warer Crisis Act of 1993.

(@) Any license issued under this Act shall contain provisions designed to ensure that
licensees:

(1) Publish the Tariff and other charges approved by and the terms and conditions
imposed by the Commission for the provision of water supply and sanitation
services.

(2) Prepare, within three (3) months from the issuance of a license, in consultation

Page | 34


with its customers, a Customer Service Code specifying the manner and
procedure for: (a) metering, billing, and collection of the licensee's approved
tariff and other changes, (b) disconnection or suspension of service in case of
non-payment of tariffs and/or other charges, or acts of pilferage. and (c)
recommendation and recovery of arrears in tariffs and other charges;

(3) Maintain financial accounts in accordance with the manner and procedure
specified in the license and as may be required by the Commission; and

(4) Maintain and upon request by anyone during regular office hours, promptly
make available for scrutiny and inspection such data, statistics and other
information, as may be required by the Commission,

SEC, 30. Setting Tariffs, Rates, and Other Charges. ~ Regulatory units shall establish
tariffs, rates and other charges which are fair and reasonable, and ensure economic viability
and a fair return on investments, Tariffs, rates and charges shall be based on and consistent
with a rate-setting methodology that the Commission shall, after due consultation, define and
publish, taking into account the following, among others:

(a) Reasonable and pradent capital and recurrent costs of providing the service
including a reasonable rate of retum on capital

(b) Efficiency of the service;

(©) Incentives for enhancement of efficiency;

(d) Willingness to pay of the customers/consumers;
(e) Equity considerations; and

(8 Administrative simplicity. Tariff, rates, and charges sct by the regulatory units shall
be presumed valid and reasonable unless a protest or contest is filed with the Commission,

SEC.31. Direct Access. Fifty-one (51) percent of the registered water consumers in a
municipality, city or province may petition for direct access to water from any water service
provider subject to concurrence by the service provider and approval by the Commission. The
Commission shall promulgate rules and procedures for this mode of service.

SEC, 32. Innovative Schemes to Improve Efficiency and Management of Systems. ~The
‘Commission shall promote innovative schemes such as the consolidation or integration of
‘water supply and sanitation services, or providers in the same service area, where it shall result
in improved efficiency, service expansion and lower costs, To this end, the Commission shall
establish and issue such rules and guidelines as may be necessary to (a) create incentives to
encourage efficiency and service expansion; (b) establish the standards and targets that service
providers are required to meet; and (c} define the fines and penalties that shall be imposed for
failure to meet such standards and targets.

Page | 35


CHAPTER VI
QUASI-JUDICIAL FUNCTIONS OF THE COMMISSION

SEC. 33. Proceedings Before the Commission. — For the purpose of any investigation,
inquiry or proceeding. the Commission shall:

{a) Issue subpoena duces recum and subpoena ad testificandumt:
(b) Appoint hearing officers to hear and receive evidence on behalf of the Commission:

(©) Cite any person or party for contempt for refusal to appear, testify, or comply with
an order of the Commission on any matter that is the subject of investigation, inquiry or
proceeding before the Commission.

SEC. 34. Orders and Decisions of the Commission. - Any order, resolution, or
decisions of the Commission shall be promulgated promptly. expeditiously, reasonably, and in
writing, and shall state clearly and distinctly the facts and law on which it is based. The
Commission shall publish and make available for public inspection, all decisions and final
orders in the adjudication of contested cases or applications.

SEC. 35. Appeals Procedure and Prohibition Against Injunction. ~

(a) The orders, rulings, and decisions of the Commission are final and executory unless
appealed to the Court of Appeals within fifteen (15) days from receipt of notice of such order,
ruling or decision: Provided. That orders, rulings, and decisions of the Commission approving
riffs, shall be immediately executory and may be suspended only upon appeal and filing of a
bond. in an amount to be fixed by the Commission, 10 answer for damayes occasioned by the
suspension or stay of execution of such orders, rulings. and decisions.

(b) No injunction may be issued by any court or administrative agency to restrain any
proceeding before. or the implementation or execution of any order. ruling. or decision of the
Commission, except on the basis of a question of law brought before the Supreme Court on
certiorari.

(c) Any act or decision of the Commission shall not be invalidated merely because of a
defect or irregularity in, or in connection with, the appointment or vacancy in the Office of the
Chairperson or any other member of the Commission.

CHAPTER VIE
INTERDEPARTMENTAL RELATIONS OF THE COMMISSION

SEC. 36, Jmerface with Other Sector Regulators, —

(a) The DENR shall continue (o exercise primary jurisdiction over programs aimed at
protecting the environment and the quality of water sources from waste and pollution, and shall
promulgate rules. regulations. and standards in this regard. The Department of Health (DOH)
shall continue to exercise primary jurisdiction over the determination and enforcement of
standards for quality drinking water and sanitation.

(b) The Commission shall coordinate with the:

Page | 36


(1) DOH to ensure that the standards and targets for quality drinking water and
sanitation are consistently complied with:

2) LGUs for development projects relating to water supply and sanitation; and

(3) Department of Public Works and Highways for flood control and harnessing
and impounding of water.

SEC. 37. Transfer of Rights and Obligations. - The Commission shall, by virtue of this
Act, be subrogated to all the rights, and assume all the obligations, of the Water Utilities
Division of the NWRB. the regulatory offices of MWSS and LWUA, the regulatory units of
all special economic zones, and all other government agencies and units whose powers and
functions have been transferred to the Commission. The transfer of powers and functions to
the Department of the concemed agencies as herein provided for, shall be decmed completed
within six (6) months after the effectivity of this Act. The transfer of powers and functions shall
include all applicable funds, personnel, records, property and equipment, as may be necessary.
The same shall apply to agencies which have been attached to the Department by virtue of this
Act.

All agencies transferred, subsumed and attached to the Department, shall continue 10
function under their presemt mandates until the six-month transition period mandated under this
Act shall have lapsed. The heads of the affected agencies shal] continue to serve until replaced,
All rights and obligations of the affected agencies are hereby transferred to and assumed by the
‘Commission, and shall be acted upon in accordance with the rules and regulations of the
Commission on Audit and other pertinent laws. rules. and regulations.

SEC. 38. Absorption or Separation from Service of Employees of the Subrogated
Agencies. ~ The current employees of the Water Utilities Division of the NWRB. the regulatory
offices of MWSS and LWUA, the regulatory units of all special economic zones. and all other
government agencies and units whose powers and functions have been transferred to the
Commission shall enjoy security of tenure, and shall be absorbed by the Department, in
accordance with their staffing pattern and the selection process as prescribed under Republic
Act No. 6656 or the Government Reorganization Law. Employees opting to be separated from
the service as a consequence of the consolidation. and reconstitution under the provisions of
this Act shall, within one (1) month from their separation or phase out from the service. receive
‘separation benefits in accordance with existing laws, and those who are qualified to retire shall
be allowed to retire and be entitled to all benefits under existing retirement laws,

SEC. 39. Water Trust Fund. — There is hereby created a Water Trust Fund in the Bureau
of Treasury, All non-tax revenues, including raw water pricing, permit fees. regi: fees.
supervision and regulation enforcement fees. filing fees. testing fees, and other service income
from the use of water resources shat! be remitted to the Water Trust Fund, The trust fund shall
be accounted separately from the government's general revenues and shall be automatically
appropriated to the Department. Proceeds from the trust fund shall be utilized for water
development, water sanitation and waste water treatment and management. and water
sustainability programs and projects authorized under this Act: Provided. That a maximum of
ten percent (10%) of the total income generated from raw water extraction shall be given as
share of the concemed local government unit or indigenous peoples (JP) community who own
the specific areas or land where the raw water was sourced.

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CHAPTER VII
FINAL PROVISIONS.

See. 40, Applicability of Ease of Doing Business Law. ~ The prescribed processing time
provided under Section 9,b of Republic Act No. 11032. otherwise known as the Ease of Doing
Business and Efficient Government Service Delivery Act of 2018, shall be applicable to all
agencies and LGUs covered under this Act particularly on accessing government services.

Sec. 41. Transitory Provisions, — Performance audit of all water-related agencies and
institutions, including LWUA and water districts, MWSS, MWSS-RO and its coneessionaires,
LGU- run utilities, Tourism Infrastructure and Enterprise Zone Authority, Philippine Economic
Zone Authority, Bases Conversion and Development Authority, Subic Bay Metropolitan
‘Authority, DILG, and NIA, shall be conducted by the Department.

SEC. 42. Appropriations ~ The amount necessary to cover the initial implementation
of this Act shall be charged against the currents year’s appropriations of the agencies and
offices transferred
and subsumed by the Department and the Commission in the General Appropriations Act.
Thereafier, such sums as may be necessary for the continued implementation of the Act shall
be included in the annual GAA.

SEC, 43. Implementing Rules and Regulations. ~ Within one hundred eighty (180) days
from the effectivity of this Act, the Department, NEDA, DBM, DENR, CSC, in consultation
with concerned government agencies, the Presidential Legislative Liaison Office shall
promulgate rules and regulations for the effective implementation of this Act.

SEC. 44, Separabiliry Clause — If for any reason. any portion or provision of this Act
shall be held unconstitutional or invalid, the remaining provisions not affected thereby shall
continue to be in full force and effect.

SEC. 45. Repeating Clause. ~
(a) The following provisions are hereby repealed:

(1) Section 3 (h) and Section 12 on the provision with respect to fixing of water
rates and sanitation service fees. Section 3 (n) on the provision with respect to
regulation of waterworks and deep wells, and Section 3 (p) on the provision
with respect to regulation of waterworks and sanitation systems in privately
owned subdivisions of Republic Act 6234 entitled. An Act Creating The
Metropolitan Waterworks And Seweroge System And Dissolving The National
Waterworks And Sewerage Authority, And For Other Purposes. as amended.

(2) Title TIL on Local Water Utilities Administration Law of Presidential Decree No,
198 otherwise known as the Provincial Water Utilities Act of 1973, as amended
by Letter of Instruction No, 700 - Providing Measures To Control And Regulate
Increase In Water Rates. Letter of Instruction No. 744 - Relative To Reliable
Water Supply At Reasonable Rates in The Countryside on the. Executive Order
No. 124, 30 January 1987 - Reorganization Aet of the Ministry of Public Works
and Highways, Executive Order No, 123, 30 January 1987 - Reorganization Act

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of Ministry of Social Services and Development,

(3) Republic Act No. 3601 as amended by Presidential Decree No. $52. and
Presidential Decree No, 1702 pertaining to the creation of the National
Irrigation Administration;

(4) Section 1 of Executive Order No. 124-A S. 1987 Amending Executive Order
No. 124, dated 30 January 1987, Reorganizing the Depariment of Public Works
and Highways, Redefining Its Powers and Functions, and For Other Purposes
on renaming and reorganizing the National Water Resources Council into the
National Water Resources Board.

(b) The following provisions are hereby amended accordingly:

(2) Section 3 paragraph 3 Commonwealth Act No. 146, as amended, otherwise
known as the Public Service Act pertaining to all cases involving the fixing of
rates:

(2) Section 154, Article V, Chapter I, Title One, Book Il of Republic Act No. 7160,
as amended, otherwise known as the “Local Government Code of 1991", and
its implementing rules and regulations on the power of the local government
units to fix the rates of water utilities owned, operated and maintained by them
within their jurisdiction is hereby repealed or modified accordingly.

(3) Section 13 (b) on the regulation of enterprises within the Economic Zone under
Republic Act No. 7916 as amended, otherwise known as “The Special
Economic Zone Act of 1995”;

(4) Section 69 of Republic Act No. 9593 otherwise known as “The Tourism Act of
2009” and its implementing rules and regulations which mandate the Tourism
Infrastructure and Enterprise Zone Authority to grant franchises, supervise the
operation of public utilities, and register, monitor and regulate enterprises
within Tourism Enterprise Zones, are hereby repealed or modified accordingly:

(5) Sections 7 and 8 on the adjudication of water pollution cases under Republic
Act No, 3931 entitled, An Act Creating The National Water And Air Pollution
Control Commisston, particularly with respect to Scction 6 letters ©, f, gj.
Presidential Decree 984 entitled, Providing for the Revision of Republic Act No.
3931, Commonly Known as the Pollution Control Law, and For Other
Purposes;

(6) Sections 4(1) and 7 of Republic Act No. 9275, otherwise known as the
“Philippine Clean Water Act of 2004”;

(7) Articles 3(d) and 79 of Presidential Decree No. 1067, otherwise known as The
‘Water Code of the Philippines;

(8) Sections 9, 10, 11, 12 and 13, Chapter II of Presidential Decree No. 856.
otherwise known as the “Code on Sanitation of the Philippines”: and

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(9) Section 3.2 (b) of Executive Order No. 149 Series of 1993 transferring the
Laguna Lake Development Authority from the Office of the President to the
Department of Environment and Natural Resources, All other laws, presidential
decrees, executive orders, presidential proclamations. rules and regulations, or
parts thereof which are inconsistent with the provisions of this Act are hereby
repealed or amended accordingly.

SEC. 46. Effectivity. - This Act shall take effect fificen (15) days after its publication
in the Official Gazette or in a newspaper of general circulation.

Approved,

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