Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
HOUSE BILL NO. _________ 
Introduced by Representative Paolo Henry M. Marcoleta 
EXPLANATORY NOTE 
The Constitution provides that “the State shall protect and advance the right 
of the people a balanced and healthful ecology in accord with the rhythm and 
harmony of nature.”1 
The Philippine legal system is replete with laws and regulations mirroring 
this policy. Among them are Republic Act no. 8749 or the Philippine Clean Air 
Act, and Republic Act no. 9512 or the Environmental Awareness and Education 
Act of 2008. It has also been enshrined in various landmark cases such as Oposa 
v. Factoran2, LLDA v. Court of Appeals3, and MMDA v. Concerned Residents
of Manila Bay4.
In the case of Oposa v. Factoran, the Court emphasized the primordial 
nature of the said principle, as follows: 
“While the right to a balanced and healthful ecology is to be found 
under the Declaration of Principles and State Policies and not 
under the Bill of Rights, it does not follow that it is less important 
than any of the civil and political rights enumerated in the latter. 
Such a right belongs to a different category of rights altogether for 
it concerns nothing less than self- preservation and self-
perpetuation—aptly and fittingly stressed by the petitioners—the 
advancement of which may even be said to predate all 
governments and constitutions. As a matter of fact, these basic 
1 Section 16, Article II, 1987 Constitution. 
2 G.R. No. 101083, July 30, 1993. 
3 G.R. No. 110120, March 16, 1994. 
4 G.R. No. 171947-48, December 18, 2008. 
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rights need not even be written in the Constitution for they are 
assumed to exist from the inception of humankind.” 
However, despite all these existing laws and jurisprudence, there are still 
areas for improvement and advancement insofar as the implementation of the 
people’s right to a healthful and balanced ecology is concerned. History shows 
several cases of severe ecological disasters caused by man-made incidents, such 
as: 
•
The 1996 Marcopper mining tragedy in Marinduque which destroyed
hectares of farmlands, displaced local families, caused severe illnesses to
residents, and led to the biological death of the Boac and Mogpog rivers;
•
The 2005 massive fish kill in Rapu-Rapu, Albay, caused by cyanide spill
from the mining operations of Lafayette, Philippines, Inc., which severely
impacted the local community’s livelihood; and
•
The 2012 Padcal mine spill in Benguet which led to over 20 million tons
of mine tailings being discharged to local waters.
Regrettably, despite these environmental disasters, there is still no policy 
to ensure sufficient financial coverage for communities affected by man-made 
ecological disasters. 
This bill seeks to require mandatory environmental insurance coverage for 
owners and operators of environmentally critical projects whose activities destroy 
or pose risks to the environment, the ecosystems, and their constituent elements. 
The said insurance will be used to guarantee sufficient funding coverage for the 
needed restoration and compensation in case of damage caused by their 
operations. 
In light of the foregoing, the immediate passage of this bill is earnestly 
sought. 
PAOLO HENRY M. MARCOLETA 
Representative, SAGIP Partylist 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
HOUSE BILL NO. _________ 
Introduced by Representative Paolo Henry M. Marcoleta 
AN ACT 
ESTABLISHING 
A 
NATIONAL 
FRAMEWORK 
FOR 
THE 
MANDATORY ENVIRONMENTAL INSURANCE COVERAGE OF 
ENVIRONMENTALLY CRITICAL PROJECTS 
Be it enacted by the Senate and the House of Representatives of the Philippines 
in Congress assembled: 
SECTION 1. Short Title. - This Act shall be known as the “Mandatory 
1 
Environmental Insurance Coverage Act.” 
2 
3 
4 
SEC. 2. Declaration of Policy. - Consistent with the State policy to protect 
5 
and advance the right of the people to a balanced and healthful ecology in accord 
6 
with the rhythm and harmony of nature, the State shall promote environmental 
7 
conservation and its sustainable development at all times, and shall implement, 
8 
under a system of compensation and compliance mechanisms, proper, effective 
9 
and immediate environmental rehabilitation, remediation, and protection against 
10 
pollution and degradation arising from violations of environmental laws and 
11 
regulations. 
12 
13 
14 
SEC. 3. Definition of Terms. - As used in this Act, the following terms 
15 
shall be defined as: 
16 
17 
a. Environmentally Critical Project - refers to a project that has high potential
18 
for significant negative environmental impact and is listed as such under
19 
Presidential Proclamation (Proclamation) No. 2146, series of 1981, and
20 
Proclamation No. 803, series of 1996, as well as other projects which the
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President may proclaim as environmentally critical in accordance with 
1 
Section 4 of Presidential Decree (PD) No. 1586 or the Philippine 
2 
Environmental Impact Statement System; 
3 
 
4 
b. Heavy Industries - refer to non-ferrous metal industries, iron and steel 
5 
mills, petroleum, and petrochemical industries, including oil and gas 
6 
smelting plants; 
7 
 
8 
c. Infrastructure Projects - refer to major dams, major power plants, major 
9 
reclamation projects, and major roads and bridges; and, 
10 
 
11 
d. Resource Extractive Industries - refer to major mining and quarrying 
12 
projects; forestry projects involving logging, major wood processing 
13 
projects, introduction of fauna or exotic animals in public or private forests, 
14 
forest occupancy, extraction of mangrove products, and grazing; and 
15 
fishery projects, specifically fishpond development projects and dikes for 
16 
such projects. 
17 
 
18 
 
19 
SEC. 4. Establishment of a National Framework for Mandatory 
20 
Environmental Insurance Coverage. – Within one (1) year following the 
21 
effectivity of this Act, a national framework for Mandatory Environmental 
22 
Insurance Coverage (MEIC) shall be established. The framework shall consider 
23 
the following: 
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25 
 
26 
a. Coverage. All owners and operators of environmentally critical projects 
27 
(ECPs) shall be required to secure MEIC for ECPs as prescribed under this 
28 
Section to compensate for the adverse environmental consequences which 
29 
include damage to health and property, and costs for environmental 
30 
rehabilitation, remediation, cleanup, and other environmental impairments 
31 
arising from their operations. For purposes of this Act, ECPs shall include 
32 
heavy industries, major manufacturing industries, major resource-
33 
extractive industries, major infrastructure projects, and other similar 
34 
projects that could pose serious risks to people and the environment. 
35 
 
36 
b. Forms of MEIC. – The MEIC shall be in the form of: 
37 
 
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1. Environmental guarantee cash fund established pursuant to 
39 
existing environmental laws; or 
40 
 
41 
2. Environmental Insurance Policy (EIP) obtained from bonding or 
42 
insurance companies, whenever the environmental guarantee 
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cash fund is insufficient to cover the said adverse environmental 
1 
consequences, upon determination and recommendation of the 
2 
Inter-Agency Technical Committee created pursuant to Section 6 
3 
of this Act. 
4 
 
5 
The EIP may take the form of the following: 
6 
 
7 
i. 
Environment Performance Bond (EPB) – which shall be required for 
8 
all ongoing activities or projects issued with Environmental 
9 
Compliance Certificate (ECC) pursuant to PD 1586, to guarantee 
10 
adequate and timely compliance with the environmental standards 
11 
and the terms and conditions set forth by the Department of 
12 
Environment and Natural Resources (DENR) during the pre- 
13 
development, development, and construction phases of the project. 
14 
The EPB shall answer for all environmental damages, penalties, and 
15 
legal obligations, which may arise from the failure of the project 
16 
proponent 
to 
comply 
with 
its 
undertakings 
during 
the 
17 
aforementioned phases; and, 
18 
 
19 
ii. 
Environment Pollution, Impairment, and Cleanup Liability 
20 
Insurance (EPICLI) – which shall be required for all existing and 
21 
future activities or projects issued with ECC pursuant to PD 1586, 
22 
to cover the operational phases. The EPICLI shall answer for all 
23 
claims arising from damages to the environment; bodily injury and 
24 
property damage arising from a pollution event; and for the cost of 
25 
environmental rehabilitation, cleanup, or remediation to address the 
26 
contamination or impairment of the environment. 
27 
 
28 
 
29 
SEC. 5. Prerequisite to the Construction or Operational Phase. – Owners 
30 
and operators of ECPs shall not be allowed to commence construction or 
31 
commercial operation without initially obtaining the MEIC required under 
32 
Section 4 of this Act. 
33 
 
34 
 
35 
SEC. 6. Creation of an Inter-Agency Technical Committee. – Within one 
36 
(1) year following the effectivity of this Act, the Secretary of the DENR shall 
37 
establish and chair an Inter-Agency Technical Committee (IATC), with the 
38 
Commissioner of the Insurance Commission, and representatives of the insurance 
39 
industry, the mining industry, and other stakeholders that the DENR may deem 
40 
fit as members. Within the same period, the IATC shall: 
41 
 
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a. Identify the perils or possible negative environmental impacts, 
1 
activities, processes or undertakings that need to be mandatorily insured 
2 
as provided in Section 4 hereof; 
3 
 
4 
b. Conduct risk assessment to determine the appropriate insurance 
5 
coverage for different ECPs and activities; 
6 
 
7 
c. Formulate guidelines for the identification of primary impact areas and 
8 
prescription of rehabilitation or remediation measures in cases of 
9 
environmental damages; 
10 
 
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d. Formulate cleanup guidelines; 
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13 
e. Formulate guidelines for the identification of beneficiaries of the 
14 
MEIC; 
15 
 
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f. Ensure that the premium rates of the EIP are commensurate to the risks 
17 
covered; 
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g. Formulate guidelines for the determination of veracity of claims; 
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h. Formulate guidelines for the establishment of insurance facilities; and, 
22 
 
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i. Undertake such activities as may be necessary to fulfill the objectives 
24 
of this Act. 
25 
 
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For purposes of paragraph (h) of this Section, the Insurance Commission, 
27 
in coordination with the DENR, shall formulate guidelines for the establishment 
28 
of insurance facilities, within one (1) year following the effectivity of this Act. 
29 
 
30 
 
31 
 
SEC. 7. Beneficiaries. – The beneficiaries of the MEIC include affected 
32 
communities, stakeholders, and local government units within the projects’ 
33 
primary impact areas. Also included as beneficiaries are government 
34 
departments, bureaus, and agencies which are tasked under the law to undertake 
35 
the rehabilitation, cleanup, and monitoring of the sites affected by the pollution 
36 
or insurable event, for which no responsible private or public entity is specified. 
37 
 
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The beneficiaries shall be represented by the government, particularly the 
39 
DENR. The IATC shall identify the affected areas and prescribe the rehabilitation 
40 
or remediation measures pursuant to Sec. 6 of this Act. 
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42 
 
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SEC. 8. Payment of Claims. – The insurance company shall place all 
1 
payments of claims into special escrow accounts in government depository banks, 
2 
which shall in turn disburse the corresponding payment to beneficiaries, upon 
3 
advice of the DENR and with proper documentation. 
4 
 
5 
The DENR may create an ad-hoc body composed of representatives from 
6 
business, labor, government, civil society, and other stakeholders to assure that 
7 
claims are verified and rightful parties are compensated, and the environment is 
8 
properly rehabilitated, cleaned up, remediated, stabilized, and protected. 
9 
 
10 
The DENR shall not receive and handle payment of claims for 
11 
environmental damages, penalties, and charges, except for the claims component 
12 
which properly accrues to it as an insurance beneficiary. 
13 
 
14 
The government agency tasked with rehabilitation and assigned as the 
15 
beneficiary of the MEIC as provided under Section 7 of this Act, shall undertake 
16 
the same utilizing funds coming from the insurance claim upon approval of the 
17 
DENR. 
18 
 
19 
 
20 
SEC. 9. Penalties. – The failure of the owner and operator of an ECP to 
21 
secure a MEIC as prescribed under Section 4 hereof, or of the insurance company 
22 
to pay a verified claim in violation of the provisions of this Act within a 
23 
reasonable time, shall be punished with a fine of Five hundred thousand pesos 
24 
(Php 500,000.00) but not more than Two million pesos (Php 2,000,000.00) or 
25 
imprisonment of not less than six (6) years but not more than twelve (12) years, 
26 
or both, at the discretion of the court. 
27 
 
28 
In the case of a partnership, association, corporation, or any juridical entity, 
29 
the fine shall be imposed upon the president, treasurer, or any other officer or 
30 
person responsible for the violation. 
31 
 
32 
 
If the offender is a foreigner, the offender shall, after the service of 
33 
sentence, be deported immediately without further proceedings by the Bureau of 
34 
Immigration. 
35 
 
36 
 
Government officials, employees and agents who approve the operation of 
37 
ECPs without the necessary MEIC, in violation of the provisions of this Act, shall 
38 
suffer the penalty of suspension of not less than thirty (30) days, but not more 
39 
than six (6) months after due notice and hearing in the appropriate administrative 
40 
proceedings. 
41 
 
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SEC. 10. Implementing Rules and Regulations. – Within sixty (60) days 
1 
from the approval of this Act, the DENR shall, in coordination with the Insurance 
2 
Commission, promulgate the rules and regulations for the effective 
3 
implementation of this Act. 
4 
 
5 
SEC. 11. Separability Clause. – If any provision or part of this Act is 
6 
declared invalid or unconstitutional, the remaining parts not affected shall remain 
7 
in full force and effect. 
8 
 
9 
 
10 
SEC. 12. Repealing Clause. – All laws, presidential decrees, executive 
11 
orders, letters of instructions, administrative orders, proclamations or 
12 
administrative regulations that are inconsistent with the provisions of this Act are 
13 
hereby repealed, amended, or modified accordingly. 
14 
 
15 
 
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SEC. 13. Effectivity. – This Act shall take effect fifteen (15) days after its 
17 
publication in the Official Gazette or in a newspaper of general circulation. 
18 
 
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Approved, 
20