a

Republic of the Philippines
HOUSE OF REPRESENTATIVES

Quezon City

FIFTEENTH CONGRESS,
Second Regular Session

House Bill No. __ 600 4

Introduced by AKBAYAN Partylist Representatives

Hon. KAKA J. BAG-AO and Hon. WALDEN F. BELLO

EXPLANATORY NOTE

The advent of increasing interest on land investments in the Philippines fuelled
by the rising global demand for food and raw materials for agro-fuel production,
tourism and mining calls for a strong regulatory mechanism for the allowance
particularly of large scale foreign land investments in the Philippines. This is highlighted
by the fact that in the last 5 years our government has been involved in numerous
transactions involving the lease of large tracts of land nationwide for the production of
biofuel feedstocks, food crops and mariculture investments. The influx of foreign
investments in our country has exposed the basic sectors, particularly the farmers,
fisher folk and indigenous peoples, to the threat of displacement and loss of control,
ownership and possession over their lands.

The State's intervention is crucial in regulating large scale foreign investments on
land. This is based on the premise that the Filipino population, especially the basic
sectors, should have preferential use of and benefit from our land resources, and that
our national interest, food security, cultural integrity, healthy environment and right to
self determination be protected and upheld in any investment agreement entered into
between the Philippine entity and its foreign counterpart involving the use of land in the
country.

In this regard we are endorsing the adoption of the proposed Regulation on
Foreign Investments on Land Act. This proposed bill seeks to ensure that negotiations
and agreements entered into by any Filipino entity with foreign entities will be beneficial


to Filipinos and local communities. It provides for guidelines and criteria for the
regulation of transactions involving vast tracts of lands. The bill further aims to ensure
that any such agreement will not result in food insecurity, degradation of the
environment and displacement of communities.

In particular, the bill provides for the:
1) Guiding principles for approval of large scale foreign investments on land;

2) Mechanism for the regulation of agreements and contracts involving large
scale foreign investments on land and ;

3) Adoption of measures ensuring the protection of the rights of the basic

sectors in agreements and transactions entered into with foreign investors in
relation to land investments.

In view of the foregoing, the immediate passage of the bill is earnestly sought.

KLMLYEE

HON. WALDEN F. BELLO
AKBAYAN Partylist



Republic of the Philippines
HOUSE OF REPRESENTATIVES

Quezon City

FIFTEENTH CONGRESS
‘Second Regular Session

House Bill No.2

Introduced by AKBAYAN Partylist Representatives

Hon. KAKA J. BAG-AO and Hon. WALDEN F. BELLO

AN ACT REGULATING LARGE SCALE FOREIGN INVESTMENTS ON LAND.
Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

Section 1. Short Title. — This Act is known as the "Large Scale Foreign Investment

on Land Regulatory Act.

Section 2. Declaration of Policy. It is hereby declared the policy of the State to
promote the general welfare of the public, and protect them from any risk or
negative impacts brought about by negotiations and investment deals which involve
large-scale transnational acquisitions and leases of lands in the Philippines. It is also
the policy of the State to adopt and implement sufficient measures that shall
guarantee the rights of the Filipino population, especially the basic sectors, to
preferential use of the land resources and ensure that there are enough agricultural

lands for the present and future domestic needs without compromising and


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encroaching on ancestral domain lands, lands for socialized housing, lands for
environmental integrity, watersheds, fisherfolk settlement and livelihood, and other
social use of the land.

The State shall prioritize food security of the country through sustainable
utilization and protection of lands for food production. The State shall uphold the
sovereignty of the nation and protect the national interest, national food security,
food sovereignty, cultural integrity, healthy environment and the right to self-
determination in any investment agreement entered between Philippine and foreign
entities involving the use of land in the Philippines

Congress shall give the highest priority to the enactment of measures that
protect and enhance the right of all the people to human dignity, reduce social,
economic, and political inequalities, and remove cultural inequities by equitably
diffusing wealth and political power for the common good. To this end, the State
shall regulate the acquisition, ownership, use, and disposition of property and its
increments. The right of the people and their organizations to effective and
reasonable participation at all levels of social, political, and economic decision-
making shall not be abridged. The State shall facilitate the establishment of

adequate consultation mechanisms.

SEC. 3. Objectives. —This Act aims to:
a) ensure that foreign investments on lands will benefit Filipinos especially

the most vulnerable sectors in the country;


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b) guarantee that any negotiations and agreements entered into by any
Filipino entity with foreign entities are transparent and beneficial to the
Philippines and local communities;

) ensure that any agreements will not result in food insecurity, degradation
of the environment, create illegitimate foreign debt or violation of any
human rights law and administrative issuances;

d) take into account the rights of small farmers, farmworkers, fisherfolk,
informal settlers and the indigenous peoples; to ensure the right to self-
determination and the right to development of Filipinos and indigenous
peoples ;

e) protect the environment from any hazard that can possibly be brought by
such foreign agreements; and

f) preserve and promote indigenous culture, practice and knowledge in

agriculture.

Section 4. Definition of Terms. —

a. Agricultural land shall refer to lands devoted to or suitable for the
cultivation of the soil, planting of crops, growing of fruit trees, raising of
livestock, poultry, fish or aqua-culture production, including the
harvesting of such farm products, and other farm activities and practices
performed in conjunction with such farming operations done by persons
whether natural or juridical and not classified by law as mineral land, forest
land, residential land, commercial land, or industrial land;

b. Agricultural land use conversion refers to the undertaking of any
development activity which modifies or alters the physical characteristics of
agricultural lands to render them suitable for non-agricultural purposes with


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‘an approved order of conversion issued exclusively by the Department of
Agrarian Reform (DAR);

. Agricultural Sector is the sector engaged in the cultivation of the soil,

planting of crops, growing of fruit trees, raising of livestock, poultry, or fish,
including the harvesting and marketing off such farm products, and other
farm activities and practices;

Alienable and disposable lands of the public domain refers to lands of
the public domain which have been delineated, classified, and certified as
such and available for disposition under Commonwealth Act No.141,
otherwise known as the "Public Land Act,” as amended;

Ancestral domains shall refer to all areas generally belonging to ICCs/IPs as
defined in Republic Act No, 8371, otherwise known as the "Indigenous
Peoples Rights Act (IPRA) of 1997;

. Basic Sectors refers to but not limited to farmers, fisherfolk, indigenous

peoples, informal settlers, forest dwellers or formal and informal labor;

Biopiracy refers to the claiming of ownership or taking unfair advantage of
the indigenous genetic resources and traditional knowledge and technologies
of the Philippines by foreign entities;

Coastal Area/Zone refers to a band of dry land and the adjacent ocean
space (water and submerged land) in which terrestrial processes and uses
directly affect oceanic processes and uses, and vice versa. Its geographic
extent may include areas within a landward limit of one (1) kilometer from
the shoreline at high tide to include mangrove swamps, brackish water ponds,
nipa swamps, estuarine rivers, sandy beaches and other areas within a
seaward limit of 200 meters isobath to include coral reefs, algal flats,
seagrass beds, and other soft-bottom areas. For purposes of initiating and
implementing sustainable coastal resources protection and management, it
shall include foreshore lands;


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i. Conflicting Claim is a dispute over a piece of land by various groups
claiming some right to own or possess the land;

ino Entity refers to the Philippine National government or local
government units (LGU) or Philippine registered private associations;

k. Foreign Entity refers to a Foreign Government or instrumentality or Foreign
Corporation or business associations (i.e. joint venture) with non-Filipino
‘owners. A corporation is considered a foreign entity if:

a) more than 40% of its shares of stocks at any time is owned by
non-Filipinos.
b) organized under laws other than those of the Philippines;

1. Food Security refers to the policy objective, plan and strategy of meeting the
food requirements of the present and future generations of Filipinos in
substantial quantity, ensuring the availability and affordability of food to all,
either through local production or importation, or both, based on the
country's existing and potential resource endowment and related production
advantages, and consistent with the overall national development objectives
and policies;

m. Food self-sufficiency refers to the policy objective of meeting the food
requirements through intensive local food production in a sustainable manner
based on the country's existing and potential resource endowments and
related production advantages;

n. Foreign Land Grab is defined as Large-scale Foreign Investment on Lands
which benefits the foreign party or disadvantageous to the Philippine entity;
or that results to the displacement and/or loss of livelihood of the basic
sectors, food insecurity, soil degradation, agricultural land conversion, bio-
piracy, land speculation, labor malpractice and conflicting claims.


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©. Forest refers to an ecosystem or an assemblage of ecosystems dominated by
trees and other woody vegetation; a community of plants and animals

interacting with one another and its physical environment;

p. Forestlands refer to lands of the public domain which have been inventoried,
assessed and classified as public forest, permanent forest or forest reserves
and forest reservations;

q. Foreshore land refers to a string of land margining a body of water, the part
of a seashore between the low-water line usually at the seaward margin of a
low tide terrace and the upper limit of wave wash at high tide usually marked
bya beach scarp or berm;

r. Indigenous Cultural Communities/Indigenous Peoples (ICCs/IPs)
refer to groups of people or homogenous societies identified by self —
ascription and ascription by other, who have continuously lived as organized
community on communally bounded and defined territory, and who have,
under claims of ownership since time immemorial, occupied, possessed
customs, tradition and other distinctive cultural traits, or who have, through
resistance to political, social and cultural inroads of colonization, non-
indigenous religions and cultures, became historically differentiated from the
majority of Filipinos. ICCs/IPs shall likewise include peoples who are regarded
‘as indigenous on account of their descent from the populations which
inhabited the country, at the time of conquest or colonization, or at the time
of inroads of non-indigenous religions and cultures, or the establishment of
present state boundaries, who retain some or all of their own social,
economic, cultural and political institutions, but who may have been displaced
from their traditional domains or who may have resettled outside their
ancestral domains;

s. Labor Malpractice refers to the labor practices of management which is
below the standards set by the International Labor Organization (ILO), the
Philippine Labor Code or the Department of Labor and Employment issuances.


146 Tt may also include the unfavorable environment in the workplace for

147 organizing unions or workers’ association.

143‘ t._Land refers to resources, both human-made and natural, found on the
149 surface, below, and above the ground including inland waters and the air
150 therein;

151 u. Land Speculation is the practice of acquiring land at a lower price in
152 anticipation of an increase in the market price because of some
153 development like, but not limited to, building a road or reclassification by the
154 LGU of the land into commercial or industrial zone, etc.

155 _v. Large-Scale Foreign Investment on Lands refers to the following:

156 1) the leasing, acquisition or use of land exceeding an aggregate area of 5
157 hectares in the Philippines by foreign entities; or

158 2) entering into a joint venture agreement, partnership, cooperation or similar
159 business arrangements where the control or the beneficial use of land with
160 an aggregate area exceeding 5 hectares is given to the foreign entity;

161 w. Mandatory public hearings/consultations refer to the mechanism to
162 ensure the involvement of affected sectors and communities. It involves
163 giving notice of hearing/consultation to affected sectors and communities
164 through publication and posting in conspicuous places, conduct of a
165 reasonable number of hearings, and solicitation of positions and the public
166 presentation and validation of the planning results before the final adoption of
167 the plans;

168 x. Mineral lands shall refer to lands of the public domain, excluding those in
169 permanent forestlands and protection lands, where mineral resources are
170 found in sufficient quantity and quality for extraction and development;

171 ___y, National Land Use Plan refers to the national government's plan for the

172 rational, holistic, and just allocation, utilization, management, and


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development of the country’s land resources to ensure their optimum use
consistent with the principle of sustainable development;

z. Prime agricultural lands refer to all contiguous irrigated areas and irrigable
lands already covered by irrigation projects; all alluvial plain land highly
suitable for agriculture whether irrigated or not that have been identified to
satisfy the country’s needs for food self-sufficiency and security; agro-
industrial croplands or lands presently planted and suitable to industrial
and high value crops; highlands, or areas located at elevation of 500 meters
or above and have the potential for growing semi-temperature and high value
crops outside of declared permanent forestlands and protection forests and not
located in ecologically-fragile and environmentally-critical areas;

aa. Resettlement sites refer to areas identified by the appropriate national
agency or by the local government unit, with respect to areas within its
jurisdiction, which shall be used for the relocation of the underprivileged and
homeless, as defined under Republic Act No. 7279 or the Urban Development
‘and Housing Act (UDHA);

bb. Settlements shall refer to communities or built-up environment areas
where people prefer to live in; and

cc. Shoreline refers to a strip of land covering at least one (1) kilometer from
the point where seawater reaches during the highest high tide.

Section 5. Regulation of all Large Scale Foreign Investments on Lands
exceeding an aggregate area of 5 hectares. All contracts, agreements,
negotiations, talks and deals involving foreign investment on land exceeding an
aggregate of 5 hectares shall be publicly disclosed. It shall be approved by the
National Regulatory Board on Foreign Land Investments before it is legally

implemented. The regulation covers all investment deals on land between:


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1. Philippine Registered Private Entity with a Foreign Entity; or

2. Philippine Registered Private Entity with a Foreign National or Local
Government or its instrumentality; or

3. Philippine National Government or instrumentality with a Foreign Entity; or

4. Philippine National Government or instrumentality with a Foreign National
or Local Government or its instrumentality; or

5. Philippine Local Government unit or its instrumentality with a foreign
Entity; or

6. Philippine Local Government unit or its instrumentality with a Foreign
National or Local Government or its instrumentality.

Notwithstanding the provisions in the Local Government Code, local

government units are hereby required to seek the approval of the Board for

agreements involving Large Scale Foreign land Investments.

Section 6: Creation of a National Regulatory Board on Foreign Land
Investments. There shall be a National Regulatory Board on Foreign Land
Investments (hereinafter known as the “Board”) which is directly under the Industry
Development and Trade Policy Group of the Department of Trade and Industry and
has the power to approve or disapprove Large Scale Foreign Investment agreements
on land based on the guidelines it will formulate.

Except for the representatives from the basic sectors who will serve for a
term of three (3) years, the other Board members shall have concurrent term with

their position. Representatives from the basic sector shall be appointed by the


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President for a term of 3 years among the nominees submitted by the National Anti-

Poverty Commission (NAPC).

The members of the Board are the:

1. NEDA Director General;

2. Director of Board on Investments;

3. NAPC Chairperson;

4. Chairperson of the NCIP;

5. Chairperson of the Philippine Commission on Women;

6. One representative each from four (4) basic sectors directly involved in
land issues, namely the urban poor, peasants, fisherfolk and indigenous
peoples. Of the four (4) representatives, two (2) shall be women.

7. Secretary of the Department of Agriculture;

8. Secretary of the Department of Environment and Natural Resources; and

9. Secretary of the Department of Agrarian Reform.

The Board shall have the power to create its own secretariat, formulate its

‘own organizational plan, staffing pattern and internal rules.

Section 7. General Principles for Approval of Large Scale Foreign
Investments on Land. The guidelines to be formulated by the Board shall include
and strengthen the following essential principles. No investment will be approved if

the following conditions are not complied:

a) Impact assessment shall be conducted at the start of the investment talks
and prior to the finalization of agreement and at pre-defined intervals from
the finalization to implementation of the agreement, in order to assess the

consequences of the investment on food security, local employment and

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249 incomes; on access to productive resources by the local communities

250 especially the basic sectors and the effect on the environment. Potential
251 impacts to be studied and taken into account for the approval or
252 disapproval of the investment agreement include:

253 1) the eviction or displacement of land users with or without formal
254 security of tenure over the land they have been cultivating;

255 2) the loss of access to land for indigenous peoples and informal forest
256 dwellers;

257 3) competition for the use of natural resources like water;

258 4) decreased food security if local populations are deprived of access
259 to productive resources;

260 5) conversion of agricultural land;

261 6) depletion of soil quality;

262 7) loss of critical biodiversity;

263 8) increase in greenhouse gas emissions;

264 9) destruction of watersheds and water resources;

265 10)diminution of cultural or historical significance of the land; and

266 11) any similar aspect which the Board may include.

267 b) All investment agreements must be written in English and Tagalog with
268 translations to the local dialect of the area where the land is located.

269 c) All investment agreements shall include provisions on:

270 1) Mandatory setting aside of at least fifty percent (50%) of the crops
271 for sale to domestic market with a qualification that if prices of food
272 commodities in international market reach certain levels and there

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is an acute domestic shortage of the crops produced, all the
harvest shall be sold in the local market at prevailing market price;

2) Non-displacement of any person from the land because of the
project unless favorable relocation and livelihood shall be provided
by the investor prior to the start of the project.

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Application of Philippine laws and regulations especially but not
limited to CARL, IPRA, Fisheries Code, Labor Code, UDHA, AFMA,
Clean Air Act, Solid Waste Management Act, NIPAS Act which shall
be incorporated in the investment agreement and effective
remedies for violations thereof clearly provided.

4) Respect, promotion and protection of human rights and related
international standards of the affected sectors and provide effective
remedies of violations.

5)

Adoption of Sustainable Agriculture as the farming practice.

6) Utilization of local labor.

7) Waiver of confidentiality. The written agreement can be accessed
by the public at any reasonable time.

d) Negotiations leading to investment agreements shall be conducted in full
transparency and with the participation of the affected local stakeholders
who may be affected as a result of the investment. Before any deal is
approved, mandatory consultation and consensus approval or the free,
prior and informed consent shall be given by the local communities

concerned.

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) Mandatory publication of the investment deal. At the inception of the
investment by the foreign party, its intention to invest shall be published
in two (2) newspapers of general circulation. If there is no opposition, the
foreign investor shall proceed with the negotiation and finalization of the
agreement. The agreement shall be submitted for approval to the Board.
The agreement will be published in two (2) newspapers of general
circulation. The public is given the opportunity to scrutinize and oppose
the contract. If there is no opposition, the agreement shall be approved by
the Board and the foreign investor shall proceed with the project.

f) The workers for the project must be afforded living wages and social
protection like, but not limited to, health insurance and membership in the
Social Security System which is a key component of the human rights.

) Particular to agro-ecological approaches and low external input farming
practices, sustainable agriculture shall be included in the agreements,
recognizing that a safe and productive environment is indeed an element
in the realization of the right to food and sustainable development of local
communities.

h) “User's fee” will be charged for the utilization of land by the foreign party,
which shall be determined and collected by the Municipality/ City where
the project is located. It will be used for alternative off-farm livelihood
projects/enterprises, agriculture infrastructures and funds for credit to
small farmers and farmworkers.

i) The investment agreement shall be subject to a yearly review by the

Board and any violation may be a ground for its revocation.


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Section 8. Minimum Lease Rental of Agricultural Lands by Foreign Entities.
In the negotiation of the annual lease rental per hectare, the parties shall factor in
the annual land amortization value per hectare for agrarian reform lands, the annual
Real Property Tax on the land per hectare, the annual poverty threshold in the area,
and the gross income of company operating on the land based on its audited
financial statements. The minimum lease rental shall be computed based on the
formula set by the Board considering the above factors. The computed lease rental
approved by the Board shall be incorporated in the terms and conditions of the lease
agreement. All the pertinent data and documents used in the determination of the
lease rental shall be submitted to the Board and made public. Renegotiation of the
‘amount of lease rentals shall be undertaken every five (5) years or earlier if any of
the following arise: extra-ordinary inflation, drastic price fluctuation on both
production input and output, declaration of the areas as calamity or disaster area

due to force majeure and other similar grounds.

Section 9, Inventory of Lands Open for Investment to Foreign Entities. The
Board shall undertake an inventory of all lands targeted for large scale foreign

investment in the Philippines within six (6) months from the approval of this Act.

Section 10. Implementing Rules and Regulations. The Board is hereby
mandated to formulate rules and regulations for the implementation of this Act

within sixty (60) days from effectivity hereof.

Section 11. Congressional Oversight Committee. A congressional oversight

committee on Foreign land investments shall be created to monitor the

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performance of the Board and to propose legislative actions in relation to foreign
land grabbing. The oversight committee shall be composed of two (2) members of
the House of Representatives and two (2) from the Senate. The members should

elect among themselves their chairperson who shall preside their meetings.

Section 12. Appropriation for the Board. The Board shall have a yearly
appropriation from the General Appropriations Fund of Fifty Million Pesos (Php
50,000,000) for its operations and can request for additional appropriation when
necessary. The Congressional Oversight Committee shall be allocated a yearly
budget of One Million Pesos (Php 1,000,000) for its operations to be sourced from

the General Appropriations Fund.

Section 13. Prohibitive Acts and Penalties. Foreign Land Grabbing shall be
prohibited and is punishable with a penalty of One Million Dollars ($1,000,000) as

fine and confiscation of its assets in the Philippines.

Any person or entity who violates, attempts to violate, or conspires to violate,
any provision of this Act shall be punishable with a penalty of imprisonment for a
period of not exceeding six (6) months or a fine of not less than Five Hundred
Thousand Pesos (Php 500,000.00) but not more than One Million Pesos (Php
1,000,000.00), or both, at the discretion of the court. If the violator is a corporation,
the sitting members of the Board of Directors during the violation shall be held liable
and, in addition to the penalty, the foreign entity shall be black listed from doing

business in the Philippines.

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Section 14. Separability Clause. If any provision of this Act shall at any time be
found to be unconstitutional or invalid, the remainder thereof not affected by such

declaration shall remain in full force and effect.

Section 15. Repealing Clause. All laws, decrees, rules or regulations inconsistent

with the provisions of this Act are hereby repealed or modified accordingly.

Section 16. Effectivity Clause. This Act shall take effect after fifteen (15) days

following its complete publication in two (2) newspapers of general circulation.

Approved,

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