RECEIVED
07 SEP 2016

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

17% Congress
First Regular Session

3523

REGISTRATION UNIT

House Bill No.

Introduced by REP. ENRICO A. PINEDA and MICHAEL ODYLON L. ROMERO

EXPLANATORY NOTE

The Supreme Court ruled in COCOFED, Et. AL. vs. Republic of the Philippines (GR No
177857-8) that the coco levy funds and assets which consist primarily of the 753,848,312 SMC
shares and their accumulated dividends are owned by the government in trust for the coconut
farmers. It is ruled that said coco levy funds and assets are to be used exclusively for the benefit
of all the coconut farmers and the development of the coconut industry. ‘The funds are therefore
public trust funds — with government as trustee for the beneficial owners who are the coconut
farmers, And the exclusive purpose of the trust is the development of a coconut industry (where

hitherto there is coconut “anarchy”) to the benefit of all the coconut farmers.

However, the Supreme Court decision does not provide for an administrative mechanism to
ensure that the coco levy funds are managed prudently and properly as intended by law. ‘The
decision does not provide guidelines for the management and use of the coco levy funds for the
benefit of the coconut industry and the coconut farmers, This is a dangerous situation for the
coconut farmers who bore the burden of the coconut levy.

In fact other sectors have started posturing to get their hand on the coconut levy funds. Worse,
these “other sectors” are not even connected to the coconut industry, and the proposed use of the

funds is not for the benefit of the coconut industry and the coconut farmer,

Hence, there is a great need to constitute the coconut levy funds and assets into a Coconut

Industry Trust Find and provide the administrative structure that will manage the trust funds and

HOUSE F REPRESENTATIVES

BILLS aND INDEX SERVICE


ensure that its use will benefit the coconut industry and the coconut farmers, ‘That structure is
proposed to be a Corporation to be called the Philippine Coconut Farmers Welfare and Industry

Development Corporation

A public trust fund of the magnitude of the coconut levy funds and assets will need not a
mere commitice but a full-fledged government-owned corporation that has the requisite
characteristics of stability, flexibility, autonomy, transparency, accountability and therefore the

capacity for good and effective governance

A mere committee can never exhibit the properties of such a corporation but can easily be

subject to the politics and vagaries of express executive governmental approval and desire.

When the “Coconut Investment Act” or R.A. 6260 was enacted in 19 June 1971 with the
avowed policy of aiding the development of the coconut industry through the establishment of a
Coconut Investment Fund or “CIF” it stipulated in the same law that not a passing committee but
4 more permanent Coconut Investment Company or “CIC” be established to manage that Fund.

One could expect nothing less.
This bill seeks to give teeth to the decision of the Supreme Court that the coconut levy funds

and assets are to be used exclusively for the development of the coconut industry to the benefit of

all the coconut farmers

Approval of this bill is therefore sought.

VW
MICHAEL'L. ROMERO Ph.D ENRICO A. PINEDA
Représenjative, 1PACMAN Party-list Representative, PACMAN Party-list


Republie of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

17% Congress
First Regular Session

i
House Bill No, 3523

Introduced by REP. ENRICO A. PINEDA and MICHAEL ODYLON L. ROMERO

AN ACT CREAT PME COCONUT INDUSTRY TRUST FUND,
PROVIDING FOR ITS MANAGEMENT AND
FOR OTHER PURPOSES

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

ARTICLE I

Sec. 1 Title — This act shall be known as “The Coconut Industry Trust Fund Act”.

Sec. 2. Definition of Terms. — The following terms shall mean:

(a) "CIE" shall refer to the Coconut Industry Investment Fund created by virtue of
Presidential Decree 1468;

(b) "CLF - Oil Mills Group” shall refer to the CIIF companies, namely, Southern I
Coconut Oil Mills; Cagayan de Oro Oil Co, Inc.; Higan Coconut Industries, Inc.;
Pablo Manufacturing Corp.; Granexport Manufacturing Corp.; and Legaspi Oil Co,
Ine.:

(c)__ "CIF Holding Companies" shall refer to the fourteen (14) holding companies;
namely: Anglo Ventures Corporation; ACS Investors, Ine.; Arc Investors, Inc,; AP
Holdings, Inc.; Femandez Holdings, Inc.; First Meridian Development, Inc., Randy
Allied Ventures, Inc.; Rock Steel Resources, Ine.; Roxas Shares, Inc.; San Miguel
Officers Corp,, Ine.; Soriano Shares, Ine.; Te Deum Resources, Ine.; Toda Holdings,
Inc,; and Valhalla Properties Limited, Inc.,

on



(d) — “CIIF SMC Block Shares" shall refer to the 33,133,266 shares of stock in San Miguel
Corporation (SMC), sequestered by the PCGG in April 1986 and representing 31% of
the total outstanding capital stock of SMC;

(e) “Converted SMC | Preferred Shares” shall refer to that portion of the CIIF SMC
Block Shares covering 753,848,312 preferred shares of stock in SMC and
representing 24% of the outstanding capital stock of SMC;

(f) "Coconut Levy Assets" shall refer to any and all kinds of property, whether real or
personal, tangible or intangible, wherever situated, which have been acquired through
the Coconut Levy Funds as defined in this Section, including those assets that may be
recovered in favor of the government, as well as the fruits, or income therefrom,
including those acquired in exchange or substitution thereof,

‘This shall include, among others, the following

i, The 72,2% shares of United Coconut Planters Bank’s (UCPB's) outstanding
capital stock:
ii, The CIIF - Oil Mills Group;

iii, The CIF Holding Companies; and
iv. The CIIF SMC Block Shares,

(g) “Coconut Levy Funds" shall refer to various funds generated from levies, taxes,
charges, and other fees exacted or imposed pursuant to or in connection with the sale
of copra rececada or its equivalent in other coconut produets, and collected for the
‘most part from coconut farmers, planters, millers, refiners, processors, exporters,
desiccators and other end-users of copra rececada or its equivalent in other coconut
products.

Specifically, the term shall refer to any or all of the following:

i. The Coconut Investment Fund created under Republic Act No. 6260;

ii, The Coconut Consumers Stabilization Fund, later renamed as the Coconut
Industry Stabilization Fund, created under Presidential Decree No. 276,

iii, The Coconut Industry Development Fund created under Presidential Decree No.
582
iv, The Coconut Industry Investment Fund created under Presidential Decree No,
1468; and

v, The Coconut Reserve Fund under Presidential Decree No, 1468 and Presidential
Decree No. 1842,

(h) "PCA" shall refer to the Philippine Coconut Authority, created under Presidential
Decree 232 (S. 1973) as amended by Presidential Decree 1468 (S, 1978);


(i) "PCGG" shall refer to the Presidential Commission on Good Government, created
under Executive Order No.1 (S. 1986);

(j) “Corporation” shall refer to the “Philippine Coconut Farmers Welfare and Industry
Development Corporation (the Corporation).”

(k) “CITE” shall refer to the “Coconut Industry Trust Fund (CITF).”

(1) "Trust Income" shall refer to the income, interest earnings, and other monetary
benefits, realized by and accruing to the Trust Fund or any portion thereof, and

(m) "Trust Principal” shall refer to (i) the initial Trust Principal composed of the
proceeds from the redemption of the Converted SMC I Preferred Shares, dividends declared,
paid, or issued on the Converted SMC | Preferred Shares, and all income or interest derived
therefrom as of the effectivity of this Act; and any other cash Coconut Levy Asset deposited in
the Bureau of Treasury and UCPB as administrator of the CHF; (ii) any and all proceeds of
privatization of the Coconut Levy Assets remitted thereto by the Privatization and Management
Office, and (iii) proceeds of privatization of any or all properties or assets conveyed by any
person, group orentity to the Corporation from time to time, as provided for in this Act

Sec. 3Declaration of Policy ~ It is hereby declared to be the national policy to accelerate the
development and vertical integration of the coconut industry,through the provision of adequate
medium and long-term financing for capital investment in the industry, social services for the
coconut farmers and assistance for the coconut farmers’ organizations by instituting a Coconut
Industry ‘Trust Fund capitalized with the coconut levy funds and assets and administered by the
Philippine Coconut Farmers Welfare and Industry Development Corporation (the

Corporation).
Sec. 4 Objectives ~ Pursuant to the above-mentioned policy, this Act has the following objectives

a) Promote the steady, accelerated and orderly development and vertical integration of the

coconut industry;

b) Develop and establish coconut based farming systems including but not limited to the

establishment of model coconut farms;

¢) Hasten and advance industrialization in the coconut industry and the diversification and

proper utilization of coconut products and by-products:


d)

Promote the effective utilization and marketing of coconut produets and by-products in the
domestic and foreign markets and preserve the competitiveness and reliability of the

country as a major producer and supplier of said products;

Increase production by expanding the planting and replanting program of coconut trees in

strategic areas identified as having the most potential;

Conduct scientific researches and investigations in all areas pertaining to the agricultural,
industrial, marketing and socio-economic aspect of the coconut industry and encourage the

participation of small farm holders in research and technology;

Eneourage and promote the organization of coconut farmers’ cooperatives, associations

and organizations and provide them grants, credits and financing schemes;

Generate and disseminate information and communication to farmers, producers and other
sectors to ensure the appreciation and adoption of appropriate technology and practices,
inventions, as well as the proper awareness and correct understanding of issues and

development in the coconut industry; and [any other additionals]

ARTICLE IT

Sec, 1Creation of the “Coconut Industry Trust Fund”. — There is hereby created a trust
fund to be known as the Coconut Industry Trust Fund (CITF) from the funds and assets
of the so-called coconut levy funds consisting of the 753,848,312 CLF Preferred SMC
shares and their accumulated dividends; the United Coconut Farmers Bank (UCPB);
the CL

F Oil Mills, the 14 Holding Corporations, the United Coconut Planters Life

Assurance Corporation (COCOLIFE); and all their respective assets, subsidiaries or
their cash equivalent if sold, and affiliates to the extent that the Supreme Court has ruled
or may ule in other cases to be owned by the government in trust for the coconut industry

and the coconut farmers.

Included in these funds and assets are all the coconut levy funds consisting of the

following,


e Coconut Investment Fund created under Republic Act No, 6260;
ii, The Coconut Consumers Stabilization Fund, later renamed as the Coconut
Industry Stabilization Fund, created under Presidential Decree No. 276;

iii The Coconut Industry Development Fund created under Presidential Decree

No, 582;

iv, ‘The Coconut Industry Investment Fund created under Presidential Decree
No. 1468;

v The Coconut Reserve Fund under Presidential Decree No. 1468 and

Presidential Decree No, 1842.

Immediately upon the effectivity of this Act, the Government (Trust Owner) and the
Beneficial Owners shall cause the transfer of Ten Billion Pesos (Php 10,000,000,000.00)

from the Coconut Levy Funds to the Corporation to fund its operations and the programs

‘The registered owners/stockholders of the assets/shares/corporations above-mentioned

shall cause the transfer thereof to the Corporation created in Article III hereof.

‘They are hereby declared to be special trust funds with the government as trustee for the
beneficial owners who are the coconut farmers. The CITF shall not form part of the general
fund of the government and shall be used only for the purposes and uses of the Fund as

provided by this Act,

The PCGG, the government representatives to the boards of,
sequestered/surrendered corporations, and any government agency or person having any
Coconut Levy Asset in its administration, authority, custody or control, shall perform or

cause the performance of the following

(1) reconvey title to this Corporation of the Republic of the Philippines over the
Coconut Levy Assets;

(2) deliver all stock certificates and other evidence of ownership to the
Corporation for safekeeping;

(3) deposit all cash equivalent of the Coconut Levy Assets in the Trust Fund.

Sec. 2 Audit and Inventory of Coconut Levy Assets. ~ Upon the effectivity of this Act,

the Commission on Audit (COA), in coordination with the Presidential Commission on


Good Government(PCGG), shall conduct a complete accounting and inventory of the
Coconut Levy Assets. The audit shall determine and ascertain the amount, value,

description and nature of such funds, properties, assets, records, choses in action, and other

rights, claims, or causes of action pertaining thereto. Likewise, the COA shall conduct an

audit of all investments, disbursements or expenditures arising from Coconut Levy Funds.

Within one hundred twenty (120) days from the effectivity of this Act, the COA
shall submit to the Corporation its audit report, together with a complete list of Coconut

Levy Assets and their valuation, and the empirical basis and the methodologies employed

for the said valuation
‘The Corporation shall, within fifteen (15) days from its receipt of the audit report,
publish the same in at least two (2) newspapers of national circulation

Nothing herein shall be construed as preventing the Corporation from procuring a

third-party appraisal of any of the Coconut Levy Assets,

Sec. 3Purposes and Uses of Fund ~ The CITF shall be used only for the following:

1. To finance the developmentoperating expenses of legitimate/recognized coconut
famer organizations including projects such as scholarships for the benefit of
deserving children of the coconut farmers and the establishment of coconut seedling

nurseries and the farmers planting/replanting program;

2. To finance the establishment and operation of industries and commercial

enterprises as well as research relating to the coconut industry;

To finance social services for the coconut farmers for their mutual assistance,

protection and relief in the form of social benefits, such as life, medical, and

accident insurance coverage of the coconut farmers.

4. In general to finance the attainment of the objectives enumerated in Art. 1, Sec, 3

of this Act.

Sec. 4 Limitation of Usage of the Fund - Subject to the provision of See, 4, hereof only
the income of the CITF shall be used and only for the purposes and uses provided in See

2 hereof, except for the initial amount provided for in Article II, Section | hereof


Sec. 5Allocation of Income of the Fund — The net income of the CITF shall be allocated

as follows:

~ 5% of the net income of the Trust Fund shall be allocated for the

administrative/operating expenses of the Corporation:

- 25% of the net income of the Trust Fund shall be allotted back to the ‘Trust
Fund;

- 70% of the net income of the Trust Fund shall be used to fund the

programs/projects enumerated in See. 2 hereof

See. 6Depositoryof the Fund ~ Pursuant to Sec, 5. PD 755, the United Coconut Planters
Bank (UCPB) as long as itis principally owned by the government and the coconut farmers
shall be the depository of the CITF, the principal and income thereof, subject to the terms
and conditions as the Corporation and UCPB may stipulate. In the event the UCPB is sold
to a private entity, the Corporation shall choose the new depository of CITF provided that

the new depository shall be a government owned and controlled bank.

Sec, 7Investment of the CITF — The CITF shall be invested or allowed to be invested by the

Corporation only in the following

a) Shares of stock of corporations which have been at least annually declaring

dividends thereon for at least three consecutive yt

ars;

b) Evidence of indebtedness of the Republic of the Philippines or any other
government agency or corporation guaranteed by the Republic of the Philippines

which pay interest quarterly/semi-annually:

©) Bonds, debentures, preferred shares or guaranteed stocks of any solvent
corporations or institutions created or existing under the laws of the Philippines

which pay interest quarterly/semi-annually;

d) Time deposits and other investment products of reputable banking institutions,
including institutions in the international complex of Sovereign Wealth Funds, that

are non-speculative in nature and which pay interest quarterly/semi-annually.


ARTICLE I

Sec. 1 Creation of the Philippine Coconut Farmers Welfare and Industry
Development Corporation - There is hereby created under the office of the President of
the Philippinesthe Philippine Coconut Farmers Welfare and Industry Development
Corporation which shall manage, administer, utilize or dispose certain assets of the
Coconut Industry Trust Fund (CITF) established in Art, I, Sec. 1 hereof. It shall be
organized by the appointment of its 15-man Board of Trustees within 6 months from the

effectivity of this Act

Sec 2 Principal Office — The Corporation shall have its principal place of business in
Makati City, Metro Manila which shall be its domicile, and such branches or agencies or
subsidiaries within or outside the Philippines as may be necessary for the proper conduct

of its operations.

Sec. 3 Purposes and Objectives - The Corporation shall have the following purposes and

objectives:

a) To fully tap the potential of the coconut farmers in order to maximize their
production and give them greater responsibility in directing and developing the

coconut industry;

b) To accelerate the growth and vertical integration of the coconut industry and
other related coconut products from the raw material stage to the semi-finished

and finally, the finished product stage:
©) To improve , develop and expand the marketing system; and
d) To ensure stable and better incomes for coconut farmers;

©) In general to promote the attainment of the objectives if this Act as provided in
Art. 1, Sec.3 and Art. II, Sec. 2 hereof,
Sec. 4 Specificand General Powers ~ In order to carry out the purposes mentioned in the

preceding Section, the Corporation shall have the following purposes

a) To invest in shares of stock of corporations, at least sixty percent (60%) of the

capital stock of which is owned by Filipinos for the purpose of financing the


establishment, development and expansion of new and/or existing coconut
industrial, financial and marketing enterprises with proven profitability or great

profit potential;

b) To organize subsidiaries for the purpose of constructing, establishing and operating
coconut centrals or mills and other collateral and support enterprises which will

enhance the development, integration and modernization of the coconut industry;

©) To provide financing or grants for technical and economic research studies,

promotional programs, scholarship and social benefits and industrial manpower

development projects for the coconut industry and the coconut farmers:

d) To enter into contracts and execute such other acts and exer

¢ such powers as

may be necessary to carry the purpose of this Act;

‘To provide funds for the implementation of Art I Sec. 3 and Art. II Sec. 2 of this

Act:

f) To appoint the members of the Board of Directors of the companies/entities it

administers/manages enumerated in Sec| Art, II of this Act.

Sec. 5 Composition of the Board of Directors, Term of Office, Compensation - The
corporate powers of the Corporation shall be vested in a Board of Directors to be appointed
by the President of the Philippines consisting of fifteen (15) trustees eight (8) of whom
shall represent government sector provided that the Philippine Coconut Authority (PCA)
Administrator shall be a Director, and seven (7) of whom shall come from the coconut
industry sector provided that the three largest nationwide coconut farmers organization, the
Philippine Coconut Producers Federation, Ine. (COCOFED), the Philippine Association of
Small Coconut. Farmers Organizations. (PASCO) — andthe
PambansangKoalisyonngmgaSamahangMagsasaka at ManggagawasaNiyugan
(PKSMMN) shall have one nominee each, The depository bank ~ United Coconut Planters
Bank (UCPB) subject to See, 5. Art. Il hereof'shall have one nominee as well as the coconut
industry umbrella organization United Coconut Association of the Philippines, Inc.

(UCAP). Other nationwide coconut farmer organizations duly recognized and accredited

by the Philippine Coconut Authority may be represented in the Board, provided that in



their absence, in the meantime, the COCOFED, PASCFO and PKSMMN shall jointly

nominate such Directors,

Sec. 6 Term of Office — The members of the Board of Directors shall have a term of office

of six (6) years except those coming from the government sector whose term shall be co-
terminus with their respective government position, The term of office of those appointed
to replace these government Directors shall also be co-terminus. In any case, they shall
hold office only for a maximum of six (6) years, ‘The President may reappoint any of the
private sector Directors. Those appointed to replace the private sector Director shall serve

only the remaining term of the vacating Director

Sec. 7 Powers of the Board of Directors — Unless otherwise provided by law, the
corporate powers of the Corporation shall be exercised, all business conducted and all

property of the Corporation controlled and held by the Board of Directors,

Sec. 8 Compensation of the Directors — The Directors shall receive no salaries except
when serving as officers of the corporation, ‘They shall however receive for every board
meeting per diems as fixed by the Board as well as monthly representation, transportation,
and other allowances. Their travel and lodging expenses incurred for every meeting shall

be borne by the Corporation.

Sec. 9 Officers/Professional Management of the Corporation ~ Except for the
Chairman and Vice-Chairman the Corporation shall be managed and operated by
professional managers who have a record of proven competence and experience of at least

five (5) years in their respe

ive fields of competence in managing a corporation, for profit
or non-profit, or a department or division hereof. ‘These Officers are hereby classified as
professional managers and shall be exempt from the rules and regulations of the Civil
Service Commission

a, Chairman

b, Vice-

“hairman

President/Chief Operating Officer

d. Vice President


e. The Treasurer/Chief Financial Officer
f The Corporate Secretary

g. Comptroller/Internal Auditor

h. Compliance Officer

i. Chief Legal Counsel

j, Such other officers as may be necessary and appointed by the Board of Trustees.

Sec. 9 Powers and Duties of the Officers of the Corporation.

THE CHAIRMAN, The Chairman of the Board who shall be a Director shall preside

at all meetings of the Board of Directors, in his absence or inability to so preside, the meeting shall

be presided over by the Vice-Chairman, and in the absence of both, by the President.

The Chairman of the Board shall be the CHIEF EXECUTIVE OFFICER of the Corporation

and shall have such other powers as may be prescribed by the Board

a

b.

d

‘To preside at all meetings of the Board of Directors;
To direct the implementation of the policies of the Board:

To take active supervision and control over the property, interest, business and affairs
of the Corporation, and subject to the approval of the Board, may appoint, suspend or
remove any appointive officer or employee whenever in his judgment it may become

necessary to do so;

To present to the Board at any regular or special meeting or at such other times as it

may require, a report in the state of the business of Corporation;

To attend meetings of the Board, and render such assistance or advice as it may need

concerning the state of the business of the Corporation

VICE-CHAIRMAN ~ The Vice-Chairman who shall be a Director and who

comes from the coconut farmers organizations shall have such powers and perform such duties as

the Board of Directors may from time to time prescribe and as may be delegated to him by the

Chairman.

In the absence of the Chairman, the Vice-Chairman shall act in his stead and shall

perform any and all such powers and duties pertaining to the office


3. THE PRESIDENT ~ The President who shall be elected by the Board shall be the
CHIEF OPERATING OFFICER of the Corporation under the supervision of the Chief Executive
Officer. Aside from those which have been assigned to him by the Board, his powers and duties

shall include the following
a, To implement the policies formulated by the Board;

b, To supervise, control and direct subordinate officers and employees in the

discharge of their duties;

¢. To ensure that operations of the Corporation comply with the rules and
regulations of the Securities and Exchange Commission, Bureau of Internal
Revenue, the Commission On Audit, Corporation Code, other laws and

regulatory agencies;
d, ‘To act as an Ex-Officio Member of all Committees of the Board:
e. ‘To recommend salary adjustments, promotions of officers and staff,
£ To sign documents representing the Corporation in all its transactions,

The President may delegate to any other officer any of his powers and duties whenever in

his judgment such delegation is expedient and practicable

4. THE VICE-PRESIDENT. The Board of Directors may elect one or more Vice-
Presidents who may or may not be members of the Board, whose powers and duties in general,
shall be determined by the Board, In the absence or inability of the President, the Board shall
designate the Vice-President, to perform and discharge the powers and duties of the Office of the
President, If the Vice-Presidents are not members of the Board, the Board shall designate who

among the Board members shall act in place of the President.

5, THE TREASURER, The Treasurer shall be elected by the Board and shall have the
care and custody of the funds, securities and properties of the Corporation. He shall deposit all
moneys and other valuable effects in the name and to the credit of the Corporation in the designated
depository Bank, or with such other depositories as the Board may from time to time designate,
and any funds so deposited shall be withdrawable only by checks or other instruments signed by
duly authorized officers of the Corporation. He shall render to the Board of Directors or the

President whenever required an account of the financial condition of the Corporation and of all his


transactions as a Treasurer. He shall perform such other duties as the Board of Directors may from
time to time assign to him or are incident to his office. In the absence of the Treasurer or his
inability to act, his duties shall be performed by such person as may be designated by the Board of

Directors,

6. THE SECRETARY. The Secretary shall be elected by the Board, must be a Filipino
citizen, be a lawyer of good standing and a resident of the Philippines, He shall have the following

powers and duties:

a) He shall keep accurate minutes of all meetings of the Board;

b) He shall be custodian of the corporate seal, record, documents and papers of the

Corporation;

¢) He shall perform such other duties as may be assigned to him from time to time by the

Board or the Chairman, or the President, and such other duties incidental to his office;

d) He shall prepare such reports and statements as are required by the Board and/or the

President

During the absence or inability of the Secretary, the Board shall select the person to act in

his stead.

7. THE COMPTROLLER/INTERNAL AUDITOR. The Comptroller/Internal Auditor
who shall be a Certified Public Accountant shall be elected by the Board and shall be directly
responsible only to the Board of Directors, He shall have the following duties, in addition to those

which may be prescribed by the Board, to wit

a) To see to it that adequate records of all assets, liabilities and transactions of the
Corporation are maintained and safeguarded;

b) To see that adequate audits thereof are currently and regularly made;

©) To pass upon all vouchers, payrolls and other accounts payable, and to determine that
they are properly authorized and certified;

d) To initiate and enforce measures and procedures relating to all accounting/auditing
matters, including clerical and office methods, records, reports, to the end that the

business of the Corporation shall be conducted in accordance with the law, lawful rules,


h)

regulations and directive of the Commission on Audit and with the maximum safety

efficiency and economy;

To assess the accuracy and reliability of the accounting and auditing systems, and

certify such statements of financial conditions/income statements, as required by the

Board or as requested by the President,

To act as budget director and, in conjunction with other officers and heads of
departments, to prepare annual budget covering all activities of the Corporation and to

submit the same to the Board before the calendar year begins;

To attend meetings of the Board of Directors and the standing committee when so
required by the Chairman of the Board and to render such assistance and advice as the
Chairman, President, or Board may desire concerning the books, accounts, and systems
of financial transactions of the Corporation, and all its branches, and of any person,

entity or Corporation in which the Foundation may be interested:

In case of any defalcation, default, or dereliction of duty coming to his knowledge at

any time to notify at once the Chairman and the President

In the absence of the Comptroller/Internal Auditor or his inability to act, his duties shall be

performed by such person

8, COMPLIAN

as may be designated by the Board.

OFFICER — The Compliance Officer of the Corporation who shall be

elected by the Board shall have the following duties, to wit:

a)

b)

d)

To oversee and coordinate the implementation of the Corporation’s compliance system

and to provide a compliance update, at least on a quarterly basis;

To establish an effective and efficient regulatory program and coordinate its

implementation;

To report to the Board or its various committees thru the President, all significant

compliance issues requiring immediate corrective actions;

To monitor compliance with the corporate governance manual;


e) To disseminate new laws, rules and regulations upon receipt from regulatory bodies,
provide highlights/synopsis/clarifications pertinent to the new regulatory issuance in a

timely and accurate manner;

f) To serve as the primary contact with the regulators and to review, consolidate and
submit management replies to the findings/exceptions of regulatory bodies;

g) To develop and maintain a constructive working relationship with regulatory agencies
who will be called upon from time to time to clarify specific provisions of laws, rules

and regulations and to discuss/clarify compliance findings/exceptions,

9,CHIEF LEGAL COUNSEL ~ The Chief Legal Counsel shall be a member of good
standing of the Integrated Bar of the Philippines (IBP). He shall be the chief legal adviser

of the Board ot

Trustees and its officership and he shall liaise/coordinate with the Office
of the Government Corporate Counsel (GCC) and/or the Office of the Solicitor General
(OSG) concerning legal issues that may affect PCFF for which the assistance of these

offices may be necessary.

Sec. 10 Tenure of Office, Subject to the provision of Sec. 6 hereof all executive officers
shall hold office at the pleasure of the Board and all other officers, agents and employees
shall hold office for such time as provided for in their contracts of employments and if

none is provided, at the pleasure of the Board.

Sec. 11 Other Officers. The Board of Trustees may appoint such other officers as may be

deemed necessary, provide for their powers and duties, and fix their compensation.

ARTICLE IV.

Sec, | Members/ Beneficiaries of the Corporation - The following are the
minimum requirements to be defined as a coconut farmer and be a member of the

Corporation


a) Coconut Farmer - Any coconut farmer may apply as a Coconut Farmer
Member/Beneficiary of the Corporation, A coconut farmer is a natural person

who:

1. Owns and tills the coconut farm by himself and /or with the assistance

of member of his family, or farm laborers;

2. Owns the coconut farm but does not till it by himself but with the

assistance of farm laborers;

3. As lessee, usufructuary, who tills the coconut farm by himself and/or
with the assistance of the farm laborers;

4, As mortgagee, who tills the coconut farm by himself and/or with the

assistance of the farm laborers;

5. Harvests and processes the coconut products and is compensated in the

form of the produce which he sells as his own; or
6. Works in the coconut farm and is compensated either in cash or in kind.

Sec, 2. All the coconut farmers of the Philippines who respond to the Ground
Survey authorized under this Act and who express their desire to be members shall be the

members of the Corporation subject to the provision of See. 1 hereof.

ARTICLE V

Sec, | Ground Survey. For purposes of determining the respective identities and
addre:

s of coconut farmers who will be eligible to become members of the Corporation,
a ground survey of coconut farmers (Ground Survey) under the supervision of the
Philippine Coconut Authority (PCA) through its Coconut Development Officers who are

stationed in all municipalities of the coconut regions of the country shall be conducted and

of the

completed within two (2) years after the appointment of the Board of Director

Corporation subject to these rules:

a) There is hereby created a Ground Survey Working Committee

Committee”) which shall be composed of:


b)

1. An official representative of PCA who shall act as the Chairman;

RB

A representative of the COCOFED ~ Philippine Coconut Producers

Federation, Inc.;

A representative of PambansangKoalisyonngmgaSamahangMagsasaka at
ManggagawasaNiyugan (PKSMMN); and

=

A representative of Philippine Association of Small Coconut Farmers
Organizations (PASCFO),

The Survey Committee shall, within thirty (30) days from the formal
organization of the Corporation, meet to start the drafting of the rules and
regulations to govern the conduct of the Ground Survey and the
computerization of its results which shall be submitted for the approval of the

Board of Trustees of the Corporation.

Simultaneously, the Survey Committee shall also prepare the Budget for the
Ground Survey and the computerization of the results thereof which prepared
budget shall be submitted to the Board of Directors of the Corporation for its

final approval

The results of the survey shall be computerized under the Office of the
Corporate Secretary of the Corporation for the preparation of the Membership
Book of the Corporation and for use of the Board of Directors in determining
the viability, sustainability and impact of development projects for the benefit

of the coconut farmers submitted for its approval and financing

The result of the Ground Survey may also be used by the PCA and the UCPB

in the discharge of their statutory functions.

Thereafter, the Board of Directors may require periodic ground surveys of
coconut farmers for the purpose of updating the Membership Book of the
Corporation and such other purposes as the Board of Directors may deem
appropriate, The Corporation shall provide a mechanism for the admission of

new members as a result of new ground surveys.


Sec, 2 Use of Survey Results ~ The results of the survey herein authorized shall become
the official list of coconut farmers in the country and the official members of the
Corporation. Only these farmers shall be recipients, and beneficiaries of any and all
projects/programs that the Corporation directly or through their own farmers’ organization

may undertake.

Sec. 3 Content of Survey — The survey shall among others, identify the coconut farmer
either as landowner, landowner tiller, tenant, lessee, mortgagee, trustee, or worker either
paid in cash or in kind. The coconut farmer shall also be asked to which coconut farmer

organization they belong and whether they agree to be a member of the Corporation

Sec. 4 Identification Cards — All the surveyed coconut farmers shall be issued the
Corporation's tamper proof Membership 1D’s which shall indicate to what category of
coconut farmer they belong and the mother coconut farmer organization to which they

belong

Sec, 5 Survey Committee Rules ~ The Survey Committee shall promulgate the rules and
regulations for the survey and prepare the necessary survey forms which shall observe the

provision of this Article

Sec. 6 Funds for the Survey — The Corporation shall appropriate the Funds necessary to
conduct the ground survey herein authorized from the funds authorized by this Act to be

used for the Corporation’s projects and programs

Sec. 7 TheSurvey Committee may seek the assistance from the National Statistics Office
in the formulation and implementation of its survey methodologies, analyses and

computerization,

ARTICLE VI

Sec, 1 Commission on Audit ~ The funds and disbursements of the Corporation shall be

subject to the rules and regulations of the Commission on Audit


ARTICLE VII

Sec. 1 Exemption from Civil Service Rule - The officers and employees of the
Corporation shall be exempt from the rules and regulations of the Civil Service
Commission, Further, they shall be exempt from the Salary Standardization Law (RA

6758) as well as the Law on Compensation in Government Corporations (RA 10149),

ARTICLE VII

See. 1 The Corporation may sell any of its trust fund assets. Any sale however shall be by
open and transparent public bidding and pursuant to the existing rules and regulations on

the disposition of government assets,

See, 2 All the proceeds of any sale authorized under this act shall form part of the capital
trust fund (CITF).

See. 3 Any sale authorized under this Act shall respect and shall not result in the diminution
of the rights of private, non-sequestered stockholders of any of the assets of the CITF
subject of the sale. Said private non-sequestered stockholders may however be invited to

sell their assets separately to the winning bidder at mutually agreed terms and conditions

Sec. 4 Intervention in the sale process by any persons or groups who have no interest in the

coconut levy funds, shall not be allowed,

AR

LE IX

Sec. | Immediately upon the effectivity of this Act, the parties to Sandiganbayan Case #
033 and its subdivided complaints shall sit down and negotiate an Amicable Settlement of
the cases which shall result in the lifting of the sequestration of corporations/assets subject

matter of said cases.

Sec. 2 The Amicable Settlements resulting in the implementation of Sec, | shall be jointly
submitted by the parties to the Sandiganbayan for approval and subsequent dismissal of

the cases,


Sec. 3 Intervention in the process by any persons or groups who are not parties to the cases

shall not be allowed,

A

ICLE X

Sec. | Repealing Clause - All laws, decrees, executive orders, rul

s and regulations and
other issuances or parts thereof, inconsistent with the provisions if this Act, are hereby
repealed or modified accordingly; PD 1469 in so far as it is suppletory to this Act shall

remain in effect,

Sec. 2 Separability Clause ~ If any part or provision of this Act is declared
unconstitutional, other parts or provisions thereof which are not affected thereby shall

continue to be in full force and effect,

Sec. 3 Effectively - This Act shall take effect upon its publication in at least two (2) national

newspapers of general circulation.

Approved.