THIRTEENTH CONGRESS OF THE 
First Regular Session 
Republic of the Philippines 
;f 
SENATE 
S.B. No. I 
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~~ 
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air,rh*C-S , 
Introduced by Senator Luisa ccLoi" P. Ejercito Estrada 
EXPLANATORY NOTE 
Oil spills pose a great danger and damage to the country's marine environment 
and the living organisms, which it supports. Over the years, such danger is heightened by 
the unprecedented increase in the size and number of oil tankers traversing waters within 
Philippine territorial jurisdiction. 
The country's capability to handle oil spills is wanting in terms of the necessary 
equipment to contain, clean up or remove spilled oil. More alarmingly, it is wanting in 
terms of laws, rules or regulations which make the polluter or "oil-spiller" responsible or 
liable for the clean-up operation at his own expense and not at the expense of the 
Government or a government instrumentality like the Philippine Cost Guard. 
In oil spills specifically, the current state of Philippine law remains exculpatory, 
i.e., it virtually exempts the owners or operators of vessels which discharge oil or oily 
mixture from the payment of clean-up costs. 
This "exculpatory1' state of the law is 
evident in Sec. 7 of P.D. No. 600 (Prevention and Control of Marine Pollution). Sec. 7 
states merely that "the owner or operator of a vessel or facility which discharged the oil 
or oily mixture may be liable to pay for any clean-up cost." While it is true that Section 
20 of P.D. No. 1152 (Philippine Environmental Code) makes it the responsibility of the 
polluter to contain, remove and clean up water pollution incidents at his own expense, 
still there is no law that gives flesh to the spirit of the statute. What exists are mere 
administrative orders and memorandum circulars which, however fail to address the 
problem of malting ships, oil tankers and oil barges directly and immediately responsible 
and liable for the clean-up costs of oil spill caused or occasioned by them. 
To remedy this anomalous situation, early passage of this bill is earnestly sought. 
LUISA i i ~ o ~ f i  
P.~JERCITO 
ESTRADA 
Senator 


I 
.. 
THIRTEENTH CONGRESS OF THE 
) 
Republic of the Philippines 
1 
First Regular Session 
1 
SENATE 
1
,
 - , r .  
Introduced by Senator Luisa "Loi" P. Ejercito Estrada 
AN ACT 
Creating the Oil Spill Liability Fund 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
Section I .  Title. - This Act shall be known as the "Oil Spill Liability Fund Act." 
Sec. 2. Statement of Policy. - It is hereby declared a national policy to prevent, 
abate and control the pollution by oil and oily mixture of the seas within the territorial 
jurisdiction of the Philippines. 
Sec. 3. Definition of Terms. - As used in this Act: 
"DENR" means the Department of Environment and Natural Resources. 
"Discharge" in relation to oil or to an oily mixture means any discharge or 
escape or spillage, however caused. 
"Fund" means the Oil Spill Liability Fund. 
"LGU" means Local Government Unit. 
"MARINA" means Maritime Industry Authority 
"Oil" means oil of any kind or in any form including but not limited to 
crude oil, fuel oil, heavy diesel oil and lubricating oil, oil refuse and sludge 
"Seas" means the waters surrounding, between and around the islands 
comprising the Philippine Archipelago. 


(h) 
"Vessel" means every description of watercraft, or other artificial 
contrivance used, or capable of being used, as a means of transportation on 
water except : 
(i) 
(ii) 
ships which are, or for the time being used as naval auxiliaries; and 
ships of under 500 tons gross tonnage; 
Sec. 4. Creation of the Oil Spill Liability Fund; Manner of Constitution. - 
There is hereby created an Oil Spill Liability Fund to be managed and administered as a 
Trust Fund by the Department of Environment and Natural Resources (DENR). The 
Fund shall be sourced from contributions of owners and operators of tankers and barges 
hauling oil and/or petroleum products in Philippine waterways and coast wise shipping 
routes. During its first year of existence, the Fund shall be constituted by an impost of 10 
centavos per liter for every delivery or transshipment of oil made by tanker barges and 
tanker haulers. 
For the succeeding fiscal years, the amount of contribution shall be 
jointly determined by the DENR, other concerned government agencies, and 
representatives from the owners of tanker haulers, and ships hauling oil and/or petroleum 
products. In determining the amount of contribution, the purpose for which the Fund was 
set up shall always be closely considered. 
Sec. 5. Purpose of the Fund. - Amounts in the Oil Spill Liability Fund shall be 
available for purposes of malting expenditures for the payment of clean-up and/or 
removal costs and natural resources damage assessments and claims as determined by the 
Department of Enviroivnent and Natural Resources (DENR) and administrative expenses 
related to such costs, assessments and claims caused or occasioned by any ship, tanker 
vessel, tanker barge or any other watercraft as understood in this Act which accidentally 
or otherwise discharges oil or oily mixture on waters subject to the jurisdiction of the 
Philippines; Provided, however, that the assessment or claim made by the DENR of the 
natural resource damage caused by an oil spill shall be payable, without need of demand, 
to the Local Government Unit (LGU) within whose territorial jurisdiction are situation 
waters affected by the oil spill; Provided, finally, that, the Fund shall also be used to 
enable the Philippine Coast Guard to develop an adequate capability for containment, 
recovery and removal or clean-up of spilled oil or oily mixture in waters within the 
territorial jurisdiction of the Philippines. 
Sec. 6. Limitations on Expenditures. - The maximum amount which may be 
paid from the Oil Spill Liability Fund with respect to - 


(i) 
removal costs resulting from a single incident shall not exceed 
P5,000,000.00; and 
(ii) 
natural resource damage assessments and claims in connection with any 
single incident shall not exceed P2,500,000.00. 
Provided, however, that removal costs and natural resource damage assessments 
and claims in excess of the amount so fixed shall be chargeable to any oil/marine 
pollution cover which may have, or had, been required to be procured by them by the 
Marine Industry Authority (MARINA). 
Sec. 7. Liability of Owners of Ships, Tanker Barges and Tanker Haulers for 
Oil Spill Limited to Contribution in the Fund. - The liability of owners of tanker 
barges and tanker haulers or of ships or watercraft as understood in this Act for any oil 
spill or natural resource damage however caused or occasioned shall be limited to their 
contribution to the Fund. 
Sec. 8. Responsibility for Physical Removal and/or clean up of oil spills. - 
Without prejudice to the right of the DENR to engage the services of a private contractor, 
the Philippine Coast Guard, using available funds from the Oil Spill Liability Fund, shall 
be the agency primarily responsible for the physical removal and/or clean-up operations 
of oil spills. 
Sec. 9. Repealing Clause. - All laws, rules and regulations inconsistent with this 
Act are hereby repealed or modified accordingly. 
Sec. 10. Effectivity Clause. - This Act shall take effect fifteen (1 5) days from the 
date of its publication in at least two (2) newspapers of general circulation. 
Approved,