Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City .

26.nov 2012
FIFTEENTH CONGRESS

Third Regular Session

HOUSE BILL No._6'710

Introduced by REPRESENTATIVE JESUS N. SACDALAN
First District North Cotabato

EXPLANATORY NOTE

Palm oil is the vegetable oil produced and consumed in largest quantity. The
demand for palm oil is global, and is forecast that palm oil shall become the
world’s most produced, consumed and internationally traded edible oil (Center
for Science in the Public Interest, Washington, DC.), with Malaysia and
Indonesia producing around 83 percent of the total volume. Without the large
volume of exported palm oil from said countries, there would be a mi jor
problem in meeting world demand for vegetable oil. The demand for palm oil is
forecast to double in 2020 and in order to achieve this production increase, there
is a need to also increase the areas to be planted for each year. This increasing
demand is attributed to the many uses of palm oil as a food and non-food
ingredient. . It is used in such foods as margarine, shortening, baked goods and
candies, and in non-foods as soaps, washing powders and cosmetics Among its
major markets are Asia, led by India and China and Europe.

In the Philippines, palm oil has been developed as an altemative for edible
oil supply , next to coconut. Palm oil has been widely grown in the Provinces
of Agusan del Sur, Agusan del Norte, Sultan Kudarat, North Cotabato,
Maguindanao, Bohol, Palawan and Bukidnon. Present data on palm oil
production show that there are already 54,748 hectares of land planted in the
above provinces. Palm oil is efficient oil producers, with each fruit containing
about 40% oil. As a result, they require ten times less area than other oil-


producing crops. Palm oil production as an agri-business industry has a lot of
potentials because it can be produced both as a plantation crop and as a small
holder crop. It is also an environmentally-sound commodity since it can thrive
in rolling areas and does not require frequent land cultivation.

Palm oil industry is consistently growing, more farmers and agri—business
groups are engaged in its production however, a lot has still to be done in
support to this growing industry. This industry needs support among others in
terms of policies, research and development, smallholder support services,
related technology in relation to health and environmental protection, and
infrastructure like oil mill facilities.

At present, there is a need for a government institution to look into the
welfare, concerns and situation of the palm oil industry.

In view of the above, the approval of this bill is most respectfully prayed for.

lo —

REP. JESUS N. SACDALAN.
First District, North Cotabato


Republic of the Philippines
HOUSE OF REPRESENTATIVE

Quezon City
FIFTEENTH CONGRESS
Third Regular Session

HOUSE BILL No._6719

Introduced by: Representative Jesus N. Sacdalan
First District-North Cotabato

AN ACT
CREATING THE PHILIPPINE PALM OIL RESEARCH AND
DEVELOPMENT CENTER TO PROMOTE THE PHILIPPINE PALM
OIL INDUSTRY AND FOR OTHER PURPOSES

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

SECTION 1. Title. — This Act shall be known as the “Philippine Palm
Oil Research and Development Center Act of 2012”.

SEC. 2. Declaration of Policy. — It is a declared policy of the State to
develop self-reliant and competitive industries through research, innovation,
education and training in science and technology. Moreover, the state
encourages investments and provides incentives to private enterprises, promote
employment and livelihood opportunities, overcome poverty and ensure long
term productivity and sustainability in the use of natural resources for
agriculture and industrial purposes, which focuses on long-term sustainability
and mitigation of climate change.

In support of this State policies, the establishment of the Philippine Palm
Oil Research and Development Center aims to harness the potential of oil palm
farming as a means of addressing poverty , ensure food security, enhanced
nutrition, generate employment opportunities, and sustainable use of unutilized
and underutilized land through programs and projects that will bring about
increase in palm oil production among smallholders. Moreover, the center shall
implement programs and projects to develop the production, processing and
utilization of palm oil and its various products and by-products and thus,
improve the quality of life in rural communities where oil palm is currently and
will be grown.
1


SEC. 3. Definition of Terms. — As used in this Act, the following terms
are defined as follows:

(a) “Philippine Palm Oil Research and Development Center” refers to the
main center for palm oil research, development and extension based
at the University of Southern Mindanao (USM) in the Municipality of
Kabacan, Province of Cotabato , Region XII , and its subsequent
satellite units as may be established, whose mandate is to initiate and
administer research and development programs and projects to expand
production, increase productivity and promote the development of oil
palm-based farming in the country.

(b) Palm Oil — a vegetable oil resulting from the milling or crushing of oil
palm fresh fruit bunches.

(©)Oil palm ~ refer to the plant species botanically known as Elaeis
guineensis Jacq.

(@)Oil palm FI hybrid — refers to a cross between a Dura (mother) and
Pisifera pollen source which produce the commercial type F1 hybrid
seed known as Tenera.

() Palm oil by-products — products coming out of the processing of fresh
fruit bunches of oil palm such as empty fruit bunches.

(© Oil palm farmer ~a farmer engaged in oil palm farming.

(g)Smallholder oil palm producer ~ a farmer cultivating an area of five
hectares or less of oil palm plantation.

(h)Palm Oil millers — business enterprises engaged in the primary
processing of oil palm fresh fruit bunches into crude palm oil and
other related by-products.

SEC. 4. Creation of the Philippine Palm Oil Research and Development
Center — There is hereby created the Philippine Palm Oil Research and
Development Center, hereinafter referred to as the PPRDC, which shall be
under the control and supervision of the Department of Agriculture (DA).


SEC. 5. Powers and Functions of the PPRDC. — It shall have the
following powers and functions:

(a) Initiate and carry out genetic research, conservation and utilization of
oil palm for research and development purposes;

(b)Initiate and administer a multi-disciplinary fesearch program to
generate high yielding oil palm hybrids, establish oil palm plant
nursery, develop innovative production and processing technologies
including the utilization of palm oil and palm oil by products for
economic and scientific purposes;

(©)Imitiate research and development projects on oil palm to address
technology, policy and regulatory gaps so as to promote a robust and
sustainable oil palm industry, ensuring high standard in production
and meeting demands for quality palm oil in both domestic and
international trade:

(d) Empower palm oil farmers, palm oil millers and other stakeholders on
the modern methods in the production, processing, and marketing
through various support services such as training, demonstration
farms, forums, market matching, technology publications and other
communication media;

(e) Sponsor training , forums, capacity-building, including scholarships
both local and abroad to improve the expertise of PPRDC staff , oil
palm producers and other industry stakeholders;

(®) Promote and provide support in the establishment of value — added
palm oil enterprises to generate livelihood opportunities and improve
general well-being of the smallholder oil palm producers;

(g)Promote cooperative development among smallholder oil palm
producers and provide them access to oil palm planting materials,
technological know-how, as well as entrepreneurial competency for
the enhancement of their palm oil based enterprises and the protection
of their welfare:

(h)Establish demonstration farms of modem technologies in strategic
places of the country to encourage the widespread use of modern
technology in oil palm plantations; and


(@ Enter into memoranda of agreement and receive grants from local and
foreign donors either directly or through the Department of
Agriculture , upon the recommendation of the PPRDC Advisory
Board; or through the respective academic boards of satellite units
housed in concerned state universities and colleges upon the
recommendation of the PPRDC Advisory Board;”

SEC. 6. Composition of the PPRDC Advisory Board. — There is hereby

created an Advisory Board which is mandated to develop policies and programs
aimed at improving the state of services needed by the Philippine palm oil
industry in order to meet local and global opportunities.

The Advisory Board of PPRDC shall be composed of the following:
(a) Secretary of the Department of Agriculture (DA), as Chairman;

(b)President of the University of Southern Mindanao, as Vice-
Chairman;

(©) Undersecretary of Department of Science and Technology
(DOST), as member;

(d) Undersecretary of Department of Environment and Natural
Resources (DENR), as member;

(c) Undersecretary, Department of Trade and Industry as member;
(® President of the Philippine Palm Oil Industry Development
Council, as member:

(g)A representative of smallholder oil palm producers cooperative;
and

(h) Executive Director of the PPRDC, as member and Secretary of the
Advisory Board.


SEC. 7. Functions and Powers of the Advisory Board. — The Advisory
Board shall meet on quarterly basis or as may be necessary, and shall perform
the following functions and powers:

(a) Recommend the selection of the Executive Director to be appointed by
the DA Secretary. —

(b)Formulate policies and initiate programs and projects for the
development of the Philippine palm oil industry;

(©) Review and approve the annual budget of the PPRDC;

(d)Evaluate the implementation, efficiency and effectiveness of the
programs and projects of the PPRDC;

(e) Approved the creation of positions, appointments to the positions and
staffing pattem for the effectiveness and smooth implementation of
PPRDC upon the recommendation of the Executive Director; and

(f) Recommend the establishment or abolition of satellite units or
branches as may be deemed necessary.

SEC. 8. Executive Director of the PPRDC. - The PPRDC shall be
headed by an Executive Director who shall be responsible for the planning,
implementation and supervision of its programs, projects and activities. He
shall be appointed by the Secretary of Agriculture for a term renewable every
four (4) years, upon recommendation of the Advisory Board. Alll other officers
and employees shall be appointed by the Executive Director of the PPRDC,
upon the approval of the Advisory Board in accordance with the criteria set by
the Advisory Board and the Civil Service Commission.

The Executive Director must possess a high degree of educational,
technical and managerial competency in research and development, as well as
of integrity and proven probity in public service.

SEC. 9. Functions and Powers of the PPRDC Executive Director. — The
following are the functions and powers of the Executive Director.

(a) Recommend the creation of divisions and sections including the
staffing patterns of the PPRDC for approval by the Advisory Board;


(b)Recommend to the Advisory Board the appointment of personnel and
consultants. The involvement of personnel from the plantilla position
of the University of Southem Mindanao or any other satellite units as
may be established, either in full-time or part-time with PPRDC shall
be done in consultation with the respective head of such state college
or university, and shall be paid on honorarium bases;

(c) Oversee the planning, implementation and evaluation of the policies,
programs and projects of the PPRDC;

(d) Consolidate and recommend the overall budget of the PPRDC for
approval by the Advisory Board; and

(e) Perform such other functions as may be assigned by PPRDC Advisory
Board.

SEC. 10. Appointment of Division Chiefs and Unit Heads of the PPRDC.
— Division chiefs, unit heads, coordinators, project leaders and other positions in
the PPRDC shall be recommended by the Executive Director, and appointed by
the Secretary of the Department of Agriculture. Appointments to various
positions in the PPRDC are subject to corresponding qualification standards to
be established by the Advisory Board of PPRDC, and the rules and regulations
set by the Civil Service Commission.

SEC. 11. Hosting and Development of PPRDC. The University of
Southern Mindanao situated at Kabacan, Cotabato shall serve as the main host
of PPRDC. Satellite stations may be designated later upon the approval of the
Advisory Board. For this purpose an area of one hundred (100) hectares of the
land grant of the University of Southem Mindanao at Kabacan , Cotabato
Province will be allocated as area for research and office/administrative
functions of PPRDC. Part of the fund of PPRDC will be allocated for the
infrastructure development and strengthening the manpower of PPRDC
including that of the University of Southern Mindanao and such other satellite
units as may be established, who may be involved in the programs and projects
of the center.

SEC. 12. Coordination among Stakeholders of the PPRDC and Linkage
with other Research & Development Institutions. - The PPRDC shall regularly
monitor and evaluate the palm oil research and development programs and
identify the immediate gaps, needs and essential concerns in the palm oil
industry in consonance with the domestic and international development and


opportunities. It shall likewise coordinate with other national government
agencies and international RDE bodies in order to formulate strategies that
would sustain the long-term growth of the palm oil industry.

The PPRDC shall initiate and provide leadership in partnering with other
national, regional agencies and local government units in jointly implementing
programs in areas suitable for oil palm farming and to enhance the achievement
of the goals of this Act. :

SEC. 13. Allocation of Funds. — Not more than forty percent (40%) of
funds allocated under this Act and in subsequent annual appropriations shall be
used for personnel services, and maintenance and operating expenses; thirty
percent (30%) for research, training and extension and other development
support services; and thirty percent (30%) for plant dispersal of hybrid palm oil
seedlings with emphasis on the welfare of smallholder palm oil producers.

SEC. 14. Annual Report. — The PPRDC shall provide copies of the
annual report to the Office of the President, the Senate and the House of
Representatives indicating among others, the administration and institutional
development of the PPRDC, an the progress of programs and projects on the
palm oil industry and its stakeholders.

SEC. 15. Appropriations. — The amount necessary to carry out the
provisions of this Act shall be include in the General Appropriations Act of the
year following its enactment into law and thereafter.

SEC. 16. Separability Clause. — If any part, section or provision of this
Act shall be held invalid or unconstitutional, the rest of the provisions shall not
be affected thereby.

SEC. 17. Repealing Clause. — All laws, executive orders, rules and _
regulations or parts thereof which are inconsistent with this Act are hereby
repealed or modified accordingly.

SEC. 18. Effectivity Clause.— This Act shall take effect fifteen (15) days
from the date of its publication in the Official Gazette or in at least two (2)
newspapers of general circulation.

Approved: