TWENTIETH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
)
)
)
25 JUL -7 P\2 -C6
SENATE 
S.B. No.
INTRODUCED BY SENATOR RISA HONTIVEROS
AN ACT
ESTABLISHING A LEGISLATIVE FRAMEWORK FOR WATER SERVICES IN THE 
PHILIPPINES, BY REFORMING NON-PERFORMING JOINT VENTURE 
AGREEMENTS AND ENHANCING INSTITUTIONAL OVERSIGHT AND 
ACCOUNTABILITY
EXPLANATORY NOTE
The Philippines confronts a deepening water crisis, particulariy evident in the 
widespread faiiures of Locai Water Districts (LWDs) operating under Joint Venture 
Agreements (JVAs) with private concessionaires. These arrangements, often spanning 
25 years, have frequently led to deteriorating service quality, inciuding tea-coiored, 
foui-smeliing, or intermittent water supply, weak pressure, reduced service hours, and 
surging Non-Revenue Water (NRW) leveis far exceeding efficiency benchmarks, as 
seen in the experiences of PrimeWater and various LWDs like Metro San Fernando 
Water District.
Despite commitments to increase water production and expand service 
coverage, many private partners have aliegediy falien short, leaving miliions of 
Filipinos with inadequate access to a basic human right. The difficuity of extricating 
from these onerous contracts, often met with legal challenges such as restraining 
orders, underscores a criticai need for a robust iegisiative intervention.
A significant root of these problems lies in the flawed inception and execution 
of many JVAs. Audit reports by the Commission on Audit (CoA) consistentiy reveal 
irregularities. Furthermore, these agreements often feature unjustified revenue­
sharing schemes, a giaring absence of effectively elucidated penaity ciauses for non­
performance. Many JVAs originated from unsoiicited proposais, a procurement method 
that, if not rigorousiy managed, can bypass competitive bidding and result in contracts 
where cruciai bid parameters, price, and performance metrics are vagueiy defined or 
determined later, creating opportunities for disadvantageous terms.
1


The current oversight architecture for LWDs and their private partnerships is 
severely fragmented, contributing to a "governance crisis" in the water sector. 
Overlapping mandates and unclear roles among numerous agencies, including CoA, 
Local Water Utilities Administration (LWUA), Governance Commission for GOCCs 
(GCG), Public-Private Partnership (PPP) Center, National Water Resources Board 
(NWRB), and Department of the Interior and Local Government (DILG), lead to 
regulatory conflicts, uncoordinated efforts, and a lack of decisive action.
This institutional disarray enables "forum shopping" by parties, delaying 
accountability and perpetuating service deficiencies. The absence of a clear division 
of labor and a unified legal team to determine contract legitimacy, mandate 
corrections, and provide legal assistance has left many water districts vulnerable and 
unable to effectively address contractual breaches.
Past legislative efforts, such as the National Water Crisis Act of 1995 (Republic 
Act No. 8041), proved temporary and reactive. While RA 8041 aimed to address 
immediate water supply issues and allowed for privatization, its critical "sunset clause" 
meant the Joint Executive-Legislative Water Crisis Commission ceased its functions 
after a mere six months. This temporary mandate failed to establish a permanent, 
robust framework for continuous oversight of private sector participation, 
inadvertently contributing to the proliferation of onerous contracts that now burden 
LWDs. The continued existence and exacerbation of the water crisis, decades after RA 
8041, underscore a critical failure in legislative design and implementation, demanding 
a new, comprehensive, and enduring legal framework focused on systemic 
governance and contractual issues.
The 2025 Water Crisis Act directly addresses these systemic failures by 
establishing a clear legal and institutional framework for LWD-private sector JVAs. It 
mandates the creation of a specialized JVA Oversight and Legal Team (JVA-OLT) 
within LWUA, tasked with comprehensive review, legal determination of contract 
legitimacy and nullity, and strategic intervention. This team will refine oversight 
processes, provide direct legal and technical assistance to LWDs in negotiations and 
pre-termination, and establish guidelines for tariff and Key Performance Indicator 
(KPI) reviews. The Act also introduces stricter guidelines for unsolicited proposals, 
mandating competitive bidding with clearly defined parameters from inception to 
prevent disadvantageous terms.
Crucially, this Act prioritizes the restoration and expansion of water services to 
the public, even amidst extended legal disputes, by empowering LWDs, local 
government units (LGUs), and community water systems to undertake immediate 
service improvements. It formalizes collaborations with various local actors and


facilitates access to emergency funding and technical assistance. Furthermore, the Act 
mandates robust accountability for public officials involved in JVA formulation and 
oversight, imposing civil, criminal, and administrative liabilities for disadvantageous 
contracts or gross negiigence. For private JVA partners, it establishes corporate 
criminal and civil liability, and critically, introduces successor iiability, ensuring that 
changes in ownership do not extinguish existing obligations or liabilities for past 
performance failures, thereby reaffirming commitments and fostering a truly 
legitimate and pubiiciy-oriented water sector.
In view of the forgoing, the passage of this bill is earnestly sought.
RISA HONTIVEROS 
Senator


TWENTIETH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
S.B. No.
)
)
)
SENATE
216
25 JUL-7 R2:07
INTRODUCED BY SENATOR RISA HONTIVEROS
AN ACT
ESTABLISHING A LEGISLATIVE FRAMEWORK FOR WATER SERVICES IN THE 
PHILIPPINES, BY REFORMING NON-PERFORMING JOINT VENTURE 
AGREEMENTS AND ENHANCING INSTITUTIONAL OVERSIGHT AND 
ACCOUNTABILITY
CHAPTER 1
GENERAL PROVISIONS AND DECLARATION OF POLICY
1 
SECTION 1. Short Title. - This Act shall be known as the "Water Crisis Act of
2 
2025."
3 
Sec. 2. Declaration of Policy. - The State hereby declares its policy to recognize
4 
and uphold water as a fundamental human right and a public trust, ensuring access
5 
to safe, sufficient, affordable, and sustainable water supply, sewerage, and sanitation
6 
services. The provision of these services, particularly through Local Water Districts
7 
(LWDs) and their joint venture agreements (JVAs), is imbued with paramount public
8 
interest and shall be subject to stringent regulation and oversight to ensure efficiency,
9 
reliability, and affordability. This Act specifically addresses the pervasive issues of non-
10 
performing and onerous JVAs, including flaws in their inception, execution, and
11 
monitoring. It aims to rectify systemic failures in contractual terms, performance
12 
measurement, institutional oversight, and transparency. Furthermore, it seeks to
13 
resolve the existing institutional overlaps and inadequacies among government
14 
agencies in providing effective assistance and regulatory guidance to water districts,
15 
ensuring coordinated action and robust accountability for both public officials and
16 
private entities involved in these agreements.


1 
Sec. 3. Scope and Applicability. - This Act shall primarily focus on the
2 
governance, regulation, and oversight of Local Water Districts (LWDs) and their joint
3 
venture agreements (JVAs) or other forms of public-private partnerships (PPPs) with
4 
private water service providers nationwide, particularly concerning issues of contract
5 
inception, performance, and termination. It shall also cover the roles and
6 
responsibilities of national government agencies and local government units in
7 
ensuring the effective management and delivery of water services by LWDs and their
8 
partners.
9 
Sec. 4. Definition of Terms. -
10 
For the purpose of this Act, the following terms shall mean:
11 
a. Joint Venture Agreement (JVA): A contractual arrangement between a local
12 
water district (LWD) and a private entity for the operation, repair, development,
13 
and construction of water infrastructure, maintenance of supply and septic
14 
management, and collection of service fees.
15 
b. Local Water District (LWD): A government-owned and controlled corporation
16 
(GOCC) created under Presidential Decree No. 198, responsible for water
17 
supply and distribution in provincial cities and municipalities outside Metro
18 
Manila.
19 
c. Non-Revenue Water (NRW): Water that has been produced and lost before it
20 
reaches the customer, whether through real losses (leaks) or apparent losses
21 
(theft or metering inaccuracies). A benchmark of 20% or less indicates
22 
efficiency.
23 
d. Onerous Contract: A contract that is excessively burdensome, oppressive, or
24 
one-sided, particularly when its terms are so unjust that they shock the
25 
conscience of the court, or when they contravene law, morals, good customs,
26 
public order, or public policy.
27 
e. Performance-Based Regulation: A regulatory approach that links tariffs and
28 
contractual incentives/penalties to the achievement of pre-defined service level
29 
standards and efficiency targets.
30 
f. Public-Private Partnership (PPP) Code of the Philippines (RA 11966): The
31 
governing law for PPP projects in the Philippines, 
providing a framework for
32 
private sector participation in infrastructure and development projects.


1 
g. Swiss Challenge: A competitive process for unsolicited proposals where third
2 
parties are invited to submit superior offers, with the original proponent having
3 
the right to match the best proposal.
4 
h. Successor Liability: The principle by which a new entity may be held responsible
5 
for the obligations or liabilities of a previous entity, particularly in cases of asset
6 
acquisition, merger, or change of ownership, especially when there is continuity
7 
of business operations or intent to evade obligations.
8 
i. Water Service Provider (WSP): Any entity, public or private, providing water
9 
supply, sewerage, or sanitation services.
10
11 
CHAPTER 2
12 
INSTITUTIONAL OVERSIGHT AND COORDINATION FOR JVAs
13
14 
Sec. 5. Rationalization of Oversight Bodies for Water Districts and JVAs. -
15 
(a) Establishment of a Unified JVA Oversight and Legal Team.
16 
There is hereby created a specialized JVA Oversight and Legal Team (JVA-OLT)
17 
within the Local Water Utilities Administration (LWUA), which shall serve as the
18 
primary body responsible for the comprehensive review, legal determination, and
19 
strategic intervention in joint venture agreements (JVAs) and other private sector
20 
participation contracts involving Local Water Districts (LWDs). This team shall be
21 
composed of legal, financial, engineering, and public administration experts, and shall
22 
directly address the historical fragmentation, overlaps, and inadequacy in oversight
23 
functions of various agencies concerning LWD JVAs.
24 
To ensure effective and coordinated oversight, the JVA-OLT shall, at a minimum,
25 
require relevant government agencies, including the Commission on Audit (CoA),
26 
National Water Resources Board (NWRB), Governance Commission for GOCCs (GCG),
27 
Anti-Red Tape Authority (ARTA), and the Public-Private Partnership (PPP) Center, to:
28 
i. Information Gathering and Assembly: Systematically gather and assemble
29 
comprehensive information on the investment plans, actual service levels,
30 
compliance with contractual procedures, and reporting requirements of all
31 
LWDs and their JVA partners. This includes data on Non-Revenue Water (NRW),


1 
service coverage, water quality, pressure, and hours of supply, which are critical
2 
for performance evaluation and public disclosure.
3 
ii. Process Refinement and Capacity Building: Refine their own internal processes
4 
for capacity building of LWDs, rigorous monitoring of contractual covenants,
5 
strengthening of internal audit mechanisms, and enhancing public disclosure of
6 
operations and performance. This also extends to improving external auditing
7 
methodologies to identify and flag irregularities more effectively.
8 
iii. Elucidation of Implementing Rules and Regulations (IRRs): Elucidate and,
9 
where necessary, amend their respective implementing rules and regulations
10 
for existing laws, with a view to establishing clear, consistent, and legally
11 
binding rules and norms. These refined IRRs shall serve as the authoritative
12 
reference for LWUA's own regulatory engagement with water districts and their
13 
joint venture partners, thereby minimizing ambiguities and conflicts in
14 
interpretation and enforcement.
15 
(b) Mandate of the JVA-OLT.
16 
The JVA-OLT shall have the following specific mandates:
17 
i. Legitimacy and Nullity Determination: To conduct in-depth legal and financial
18 
audits of existing JVAs to determine the legitimacy, validity, and potential nullity
19 
of specific contractual provisions, particularly those deemed onerous,
20 
disadvantageous to the government or the consuming public, or entered into
21 
without proper due diligence or competitive bidding. This includes scrutinizing
22 
the basis of revenue-sharing schemes, cost recovery mechanisms, and the
23 
absence of adequate penalty clauses.
24 
ii. Procurement Procedure Review: To review the procurement procedures
25 
followed for existing JVAs, especially those initiated through unsolicited
26 
proposals (e.g., Swiss Challenge), to determine if proper bid parameters, price,
27 
and performance metrics were adequately defined at inception, or if these were
28 
problematically determined later, leading to disadvantageous terms. The JVA-
29 
OLT shall recommend corrective actions for such procedural deficiencies.
30 
iii. Coordination and Division of Labor: To serve as the central coordinating body
31 
for all oversight activities related to LWD JVAs, ensuring a clear division of labor
32 
and preventing forum shopping among agencies such as the Commission on


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Audit (CoA), Local Water Utilities Administration (LWUA), Governance 
Commission for GOCCs (GCG), Public-Private Partnership (PPP) Center, National 
Water Resources Board (NWRB), and Department of the Interior and Local 
Government (DILG). The JVA-OLT shall issue executive and administrative 
orders to clarify roles, streamline processes, and mandate coordinated actions.
iv. Assistance in Negotiations: To provide direct legal, financial, and technical 
assistance to LWDs in their negotiations with private partners for contract 
amendments, renegotiations, or pre-termination, ensuring that LWDs are 
adequately represented and empowered.
V. Guidelines for Reviews: To establish and enforce comprehensive guidelines for 
5th-year tariff and Key Performance Indicator (KPI) reviews for all JVAs, 
ensuring transparency, public disclosure, and strict adherence to performance 
benchmarks.
Vi. Pre-termination and Legal Representation: To mandate and facilitate the pre­
termination of non-performing JVAs based on established grounds of material 
breach or disadvantageous terms, and to provide legal representation to LWDs 
in any related legal proceedings, including those challenging restraining orders 
or injunctions.
vii. Overruling OGCC Opinions: To establish a mechanism, through executive and 
administrative orders, for the JVA-OLT, with the approval of the President, to 
overrule opinions from the Office of the Government Corporate Counsel (OGCC) 
or other legal bodies that unduly restrict LWDs' ability to act in the public 
interest regarding JVA legitimacy, nullity, or termination, especially when such 
restrictions lead to continued public detriment.
Sec. 6. Strengthening LWUA's Role in JVA Oversight and Intervention. - The Local 
Water Utilities Administration (LWUA) shall be specifically empowered and adequately 
resourced to act as the primary oversight and intervention agency for LWDs 
concerning their JVAs. LWUA shall conduct regular, in-depth performance audits of all 
LWDs with JVAs, focusing on service delivery, financial viability, and compliance with 
contractual obligations, and shall report findings directly to the JVA-OLT. LWUA shall 
have clear authority to recommend and, if necessary, implement the takeover of 
mismanaged or non-performing LWDs or their JVA-related operations, as provided


1 
under Article V of PD 198, without undue delay, especially when public health and
2 
welfare are at risk.
3 
Sec. 7. Role of the PPP Center in JVA Procurement and Monitoring. - The PPP
4 
Center shall develop and enforce stricter guidelines for the evaluation and approval of
5 
unsolicited proposals for water supply and sanitation projects, particularly those
6 
involving LWDs. These guidelines shall mandate the clear definition of bid parameters,
7 
technical specifications, and measurable performance indicators (e.g., NRW reduction
8 
targets, service coverage expansion, water quality standards) from the initial stages
9 
of proposal submission, ensuring that price and performance metrics are not left to
10 
be determined later in negotiations. The PPP Center shall also enhance its monitoring
11 
of JVA implementation, with a focus on contract compliance and public interest
12 
protection, and shall share all relevant data with the JVA-OLT.
13 
Sec. 8. Role of COA, GCG, NWRB, and DILG in JVA Accountability. -
14 
a. Commission on Audit (CoA): CoA shall continue its mandate of auditing LWDs
15 
and their JVAs, with a specific focus on identifying and reporting instances of
16 
overpricing, unjustified revenue sharing, non-compliance with investment
17 
commitments, and procurement irregularities. CoA reports shall serve as
18 
primary evidence for the JVA-OLT's legitimacy and nullity determinations.
19 
b. Governance Commission for GOCCs (GCG): GCG shall integrate JVA
20 
performance and compliance with this Act into its performance evaluation
21 
scorecards for LWDs and their boards, ensuring that good governance
22 
principles are applied to private partnerships. GCG shall also vet LWD board
23 
nominees for competence in JVA oversight and management.
24 
c. National Water Resources Board (NWRB): NWRB shall collaborate with the JVA-
25 
OLT and LWUA to ensure that water permits, tariff grants and corresponding
26 
resource allocations for investments and operations for JVA projects are
27 
consistent with service delivery targets and sustainable water management,
28 
and shall provide data on water resource availability and usage to support JVA
29 
performance assessments.
30 
d. Department of the Interior and Local Government (DILG): DILG shall assist
31 
LGUs in understanding their oversight roles concerning LWDs and their JVAs,
32 
and shall facilitate LGU and community participation in monitoring JVA
6


1 
performance and advocating for service improvements. The DILG shali also
2 
advise LGUs on their role as potential investors in water districts, even with the
3 
presence of a JVA.
4
5 
CHAPTER 3
6 
FACILITATING REFORM AND STRENGTHENING IMMEDIATE AND MEDIUM-
7 
TERM SERVIVE PROVISION ARRANGEMENTS
8
9 
Sec. 9. Primacy of Public Service and Capacity Restoration. - In the event of
10 
extended legal disputes, non-performance, or marked deterioration of services under
11 
existing Joint Venture Agreements (JVAs), this Act declares the immediate restoration
12 
and expansion of water and sanitation services to the public as paramount. Where
13 
there is a conflict between private contractual interests and the public's right to
14 
essential water services, the latter shall take primacy. Recognizing the vastly atrophied
15 
capacities of many Local Water Districts (LWDs) resulting from the reduction and
16 
retirement of their personnel, and the near-complete handing over of revenue
17 
collection, capital investment, and operational roles to private JVA partners, this Act
18 
mandates the immediate reinstatement and strengthening of LWD capacities. This
19 
includes the formalization of collaborations with local governments (LGUs), nearby
20 
water districts, community water service providers (e.g., cooperatives, homeowners
21 
associations), investors, and other private water operators to ensure continuous and
22 
improved service delivery.
23 
Sec. 10. LWUA Intervention in Deteriorating Water Districts. - The Local Water
24 
Utilities Administration (LWUA) or its duly authorized agents shall be empowered to
25 
replace members of the Board of Directors of a Local Water District (LWD) upon the
26 
recommendation of the local chief executive. LWUA may perform these functions even
27 
when a water district is not in default of its financial obligations, provided that LWUA
28 
determines, based on objective and verifiable criteria, that there is a marked,
29 
precipitous, and possibly irreversible deterioration of the services, assets, and financial
30 
capacities of the water district. This determination shall be made after due
31 
investigation and consultation with relevant stakeholders, ensuring due process for
32 
the affected board members.


1 
Sec. 11. Catch-Up Plans and Contractual Re-Legitimizatlon. - Joint Venture (JV)
2 
partners and Local Water Districts (LWDs) may pursue the formaiization of "catch-up
3 
pians" as an approach to address past service deficiencies and investment gaps.
4 
However, the formaiization of such catch-up pians shaii be deemed as conciusive
5 
evidence of past faiiure to execute and finance on investment and service-ievel
6 
improvement commitments as stipulated in the originai JVA. Such formaiization shaii
7 
not be construed as a waiver by the water district of its rights to demand payment
8 
refunds, impose penaities, effect forfeiture of performance bonds, or initiate entry into
9 
new joint venture arrangements that may reduce the roie of incumbent,
10 
underperforming private joint venture partners. Nevertheiess, it is hereby deciared
11 
that a drastic and sustained improvement in the performance of private joint venture
12 
partners, coupled with fuil compensation to the water district and its customers for
13 
past service deiivery gaps and finandai iosses, can, after the initiai five years of the
14 
JVA, put the 25-year joint venture agreement on a fresh, iegitimate footing, subject
15 
to the review and approvai of the JVA-OLT. Moving forward, the LWUA and the PPP
16 
Center shaii jointly determine the need to ciassify existing and future joint venture
17 
agreements as concession agreements that, among other things, wili require the
18 
private joint venture partners (similar to those in Metro Maniia) to secure congressionai
19 
franchises, thereby subjecting them to a higher ievel of pubiic accountabiiity and
20 
legisiative oversight.
21
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CHAPTER 4
23 
CONTRACTUAL REFORMS AND TRANSPARENCY FOR JVAs
24
25 
Sec. 12. Mandatory Review and Revision of Onerous JVAs. -
26 
(a) Comprehensive Review of Existing JVAs.
27 
Within one (1) year from the effectivity of this Act, the JVA-OLT shaii conduct
28 
a mandatory, comprehensive review of all existing joint venture agreements (JVAs)
29 
between iocai water districts and private water service providers. This review shaii
30 
specificaily identify provisions that are onerous, disadvantageous to the government
31 
or the consuming public, or have ied to persistent service faiiures and non-compiiance
32 
with contractuai obligations, inciuding but not iimited to: overpricing of capitai


1 
expenditures (CAPEX), unjustified revenue-sharing schemes, inadequate penalty
2 
clauses for non-performance, failure to meet investment and service delivery targets
3 
(e.g., water production, service coverage, water quality, NRW reduction), and non-
4 
provision of mandated services like septage management.
5 
(b) Grounds for JVA Revision or Termination.
6 
A JVA may be revised or terminated if the review determines that:
7 
i, There is a material breach of contract, including persistent failure to meet
8 
performance standards (e.g., water production targets, service coverage, water
9 
quality, NRW benchmarks).
10 
ii. The contract contains provisions that are manifestly and grossly
11 
disadvantageous to the government or the public interest, such as those
12 
allowing excessive cost recovery, prohibiting government interference in
13 
regulatory functions, or lacking proper basis for revenue sharing.
14 
iii. The private concessionaire or JV partner has failed to provide sufficient funds
15 
or investment for service improvement as stipulated in the agreement.
16 
iv. The contract was entered into without proper competitive bidding or due
17 
diligence, or involved unlawful acts or procedural irregularities (e.g.,
18 
problematic unsolicited proposals where bid parameters were not clearly
19 
defined at inception).
20 
V. The contract's terms have become so difficult or manifestly inequitable due to
21 
unforeseen supervening developments, justifying judicial readjustment or
22 
termination.
23 
(c) Legal Mechanisms for Revision and Termination ("Use It or Lose It").
24 
The JVA-OLT shall have the authority to initiate renegotiation of onerous JVAs.
25 
If renegotiation fails, the JVA-OLT shall recommend to the President the termination
26 
of such contracts, adhering to principles of due process and existing laws on contract
27 
termination for default, convenience, or unlawful acts. The government's ability to
28 
terminate contracts without prior court approval, particularly when provisions are
29 
deemed disadvantageous or irregular, has been affirmed. This Act explicitly grants the
30 
JVA-OLT and relevant government agencies the power to pursue all legal avenues,
31 
including judicial action, to restore public control over water services where private


1 
performance has failed, embodying a "use it or lose it" attitude towards non-
2 
performing private partners.
3 
Sec. 13. Enhanced JVA Transparency and Disclosure. -
4 
(a) Public Disclosure of JVA Contracts.
5 
All new and existing joint venture agreements (JVAs) for water supply,
6 
sewerage, and sanitation services shall be made publicly accessible through the official
7 
websites of LWUA, PPP Center, and relevant LWDs. This disclosure shall include, but
8 
not be limited to, full contract terms, financial provisions (e.g., tariffs, revenue sharing,
9 
investment commitments), detailed performance indicators, and audit reports.
10 
(b) Standardized Reporting and Performance Indicators.
11 
The JVA-OLT, in coordination with LWUA and NWRB, shall develop and enforce
12 
a standardized framework for performance measurement and disclosure for all water
13 
service providers operating under JVAs. This framework shall include key performance
14 
indicators (KPIs) such as Non-Revenue Water (NRW), service coverage, water quality,
15 
pressure, hours of supply, and customer satisfaction, with clear targets and penalties
16 
for non-compliance. All LWDs and their private JVA partners shall be required to
17 
submit regular, independently verified performance reports to the JVA-OLT, which
18 
shall be publicly disclosed. This directly addresses past failures in performance
19 
measurement and disclosure by water districts and concessionaires, consistently
20 
flagged by CoA.
21 
Sec. 14. Prohibition of Unsolicited Proposals for Core Water Services. -
22 
Unsolicited proposals for new water supply, sewerage, and sanitation projects that fall
23 
under the core public utility mandate of LWDs shall be prohibited, unless they
24 
demonstrably introduce truly innovative technologies or solutions not otherwise
25 
available through solicited processes. All new projects for core water services shall
26 
undergo competitive public bidding, ensuring transparency, fairness, and optimal
27 
value for money from inception, with clearly defined bid parameters and performance
28 
metrics. Any exceptional unsolicited proposal shall be subject to a rigorous Swiss
29 
Challenge process with strict oversight by the JVA-OLT and PPP Center, ensuring that
30 
the public interest is paramount and that ail terms, including price and performance,
31 
are competitively determined from the outset.
10


1 
CHAPTER 5
2 
ENABLING LWD, LGU, AND COMMUNITY INVESTMENTS
3
4 
Sec. 15. Immediate Service Improvement During Contract Disputes. -
5 
Recognizing the severe and immediate nature of water service deficiencies, this Act
6 
shall establish mechanisms to enable Local Water Districts (LWDs), Locai Government
7 
Units (LGUs), and community water systems (e.g., cooperatives, homeowners
8 
associations) to undertake service-ievel improvements, including rudimentary but
9 
promising initiatives, even while JVA pre-termination or contract renegotiation
10 
processes are ongoing.
11 
(a) Emergency Funding and Technicai Assistance.
12 
The LWUA, in coordination with the DILG and the JVA-OLT, shali estabiish a
13 
dedicated emergency fund and technical assistance program to support LWDs and
14 
LGUs in implementing collaborations for immediate service improvements in areas
15 
affected by non-performing JVAs. This fund shall be accessible without undue
16 
bureaucratic delays, recognizing the criticai need for continuous water supply.
17 
Technical assistance shall include rapid assessment of infrastructure needs,
18 
engineering support, and operational guidance to ensure continuity of service.
19 
(b) Empowering LGU and Community Co-Design and Co-Financing.
20 
LGUs shall be formally empowered to co-design and co-finance service-level
21 
improvements, including those that are rudimentary at the start but promising
22 
sustained improvements, in coordination with LWDs and affected communities (e.g.,
23 
cooperatives, homeowners associations). This shall include:
24 
i. Formal Integration of Community-LGU Financing: The support for community-
25 
LGU co-financing shali be formally made a part of the obligation of water
26 
districts towards their unserved constituencies, especially during but not iimited
27 
to periods of JVA transition or failure.
28 
ii. Minimum Design Templates for Citizens' Charters: The DILG, in consultation
29 
with LWUA and the JVA-OLT, shail issue minimum design templates for LWD
30 
Citizens' Charters, requiring the formai inclusion of provisions for community
31 
involvement in service improvement pianning, grievance redress, and co­
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1 
financing mechanisms. These templates shall ensure transparency in LWD
2 
operations and foster active participation from unserved constituencies.
3 
iii. Facilitating Access to Funds: Mechanisms shall be established to facilitate LGU
4 
and community access to national government funds, concessional loans, and
5 
blended finance for water supply and sanitation projects, especially in areas
6 
where JVAs are under review or being terminated.
7
8 
CHAPTER 6
9 
ACCOUNTABILITY AND ENFORCEMENT FOR JVA FAILURE
10
11 
Sec. 16. Accountability of Public Officials in JVA Formulation and Oversight -
12 
(a) Strict Accountability for Public Trust.
13 
Public officials and employees involved in the formulation, negotiation,
14 
approval, and oversight of joint venture agreements (JVAs) in the water sector,
15 
including those in LWDs, LWUA, PPP Center, GCG, NWRB, DILG, and other relevant
16 
agencies, shall be held to the highest standards of accountability, integrity,
17 
competence, and loyalty, upholding public interest over personal interest at all times.
18 
They shall be civilly, criminally, and administratively liable for any acts or omissions
19 
that cause injury, loss, or damage to the public or the government, particularly in
20 
relation to disadvantageous contracts, graft, corruption, gross negligence, or manifest
21 
partiality in the performance of their duties related to JVAs.
22 
(b) Enhanced Oversight and Penalties.
23 
The Office of the Ombudsman, the Commission on Audit (CoA), and other
24 
relevant oversight bodies shall be strengthened to investigate and prosecute cases of
25 
malfeasance, misfeasance, and nonfeasance by public officers in the water sector,
26 
specifically concerning JVA irregularities. Penalties shall be commensurate with the
27 
gravity of the offense, including imprisonment, fines, forfeiture of ill-gotten wealth,
28 
and perpetual disqualification from public office.
29 
Sec 17. Corporate Accountability and Successor Liability for Private JVA
30 
Partners. -
31 
(a) Corporate Criminal and Civil Liability.
12


1 
Private water service providers, including concessionaires and joint venture
2 
partners, shall be held criminally and civilly liable for violations of this Act, other
3 
relevant laws, and the terms of their JVAs. Penalties shall extend to responsible
4 
corporate officers and directors who assent to patently unlawful acts, are guilty of
5 
gross negligence or bad faith in directing the affairs of the corporation, or acquire
6 
personal or pecuniary interest in conflict with the corporation's interests, leading to
7 
damages to the public or the government.
8 
(b) Successor Liability for Onerous Contracts.
9 
In cases of changes in private sector ownership of a JVA partner, including
10 
mergers, acquisitions, or asset transfers, the successor entity shall be held liable for
11 
the existing obligations, liabilities, and judgments against the predecessor entity,
12 
particularly those arising from onerous contracts, service failures, or procurement
13 
irregularities related to the JVA. This principle of successor liability shall apply where
14 
there is continuity of business operations, workforce, or facilities, or where there is
15 
evidence of intent to evade obligations. Due diligence requirements for acquiring
16 
entities shall be enhanced to identify and account for all potential JVA-related
17 
liabilities. The PPP Code of the Philippines already emphasizes that PPP borrowers
18 
remain responsible for their obligations regardless of ownership changes, a principle
19 
reinforced and expanded by this Act for JVAs.
20 
Sec. 18. Penalties and Sanctions. - Any person, public official, or private entity
21 
found in violation of the provisions of this Act related to JVAs shall be subject to severe
22 
civil, criminal, and administrative penalties, including fines, imprisonment, forfeiture
23 
of property, and revocation of licenses or franchises, as determined by the appropriate
24 
courts or regulatory bodies.
25
26 
CHAPTER 8
27 
FINAL PROVISIONS
28
29 
Sec. 24. Implementing Rules and Regulations. - Within one hundred twenty
30 
(120) days from the effectivity of this Act, the Local Water Utilities Administration
31 
(LWUA), through the JVA Oversight and Legal Team (JVA-OLT), in consultation with
32 
relevant government agencies (PPP Center, GCG, NWRB, DILG, CoA), local
13


1 
government units, civil society organizations, and private sector stakeholders, shall
2 
promulgate the necessary rules and regulations for the effective implementation of
3 
this Act, specifically focusing on the detailed procedures for JVA review, renegotiation,
4 
termination, and accountability.
5 
Sec. 25. Separability Clause. - If any provision or part of this Act is declared
6 
unconstitutional or invalid, the remaining parts or provisions not affected thereby shall
7 
remain in full force and effect.
8 
Sec. 26. Repealing Clause. - All laws, decrees, executive orders, proclamations,
9 
rules, and regulations, or parts thereof inconsistent with the provisions of this Act are
10 
hereby repealed, amended, or modified accordingly.
11 
Sec. 27. Effectivity. - This Act shall take effect fifteen (15) days after its
12 
complete publication in the Official Gazette or in at least two (2) newspapers of general
13 
circulation.
Approved,
14