Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
First Regular Session

28093

House Bill No.

Introduced by AKBAYAN Party-List Representatives
Hon. Kaka Bag-ao and Hon. Walden Bello

AN ACT PROTECTING THE RIGHTS OF FARMERS AND TENANTS AND ENSURING
CONTINUOUS FOOD SECURITY AMID COMMERCIAL PRESSURES ON LAND
RESULTING FROM BIOFUEL PRODUCTION, AMENDING FOR THIS PURPOSE,
CERTAIN PROVISIONS OF REPUBLIC ACT. NO. 9367, OTHERWISE KNOWN
AS THE BIOFUEL ACT OF 2006, AND APPROPRIATING FUNDS THEREFOR.

Prefatory Statement

The Biofuel Act of 2006 seeks to reduce dependence on imported fuels and invigorate
over-all development by mandating the use of locally-grown biofuels purported to mitigate toxic
and greenhouse gas emissions while at the same time increasing rural employment and income.

Experiences on the ground, however, have demonstrated that allowed to go unabated,
biofuel production in large tracts of agricultural lands can result in competition with food
production for scarce resources (land, water, etc.), and, contrary to glowing promises of improved
rural income, can result in massive displacement of tenants and farmers and loss of livelihood. If
the lands to be used for biofuel production have yet to be distributed under the Comprehensive
Agrarian Reform Program (CARP), it must be ensured that the state policy encouraging biofuels
not be used to thwart acquisition and distribution. If the lands are already distributed to agrarian
reform beneficiaries, then minimum standards must be in place to protect the rights of the
‘owner-cultivators from abuse.

Moreover, in light of the many commercial pressures on land wrought by global trends and
the free market, and the diminishing supply of food reserves, it has become crucial to impose a cap
on the lands to be used for biofuel production - enough to meet the domestic biofuel requirement
in RA 9367, but leaving enough agricultural lands free to meet the food consumption needs of a
burgeoning population.

Given the relentless assault on agricultural lands and the steady diminution of our food
reserves, sustainable strategies must be swiftly institutionalized. The protection of our finite
resources is this generation's urgent task and its obligation to future generations.

SE LM/

Hon. WALDEN BELLO
Representative, Akbayan Party-list,

The passage of this bill is earnestly sought.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
First Regular Session

2809

House Bill No.

Introduced by AKBAYAN Party-List Representatives
Hon. Kaka Bag-ao and Hon. Walden Bello

AN ACT PROTECTING THE RIGHTS OF FARMERS AND TENANTS AND ENSURING
CONTINUOUS FOOD SECURITY AMID COMMERCIAL PRESSURES ON LAND
RESULTING FROM BIOFUEL PRODUCTION, AMENDING FOR THIS PURPOSE,
CERTAIN PROVISIONS OF REPUBLIC ACT. NO. 9367, OTHERWISE KNOWN
AS THE BIOFUEL ACT OF 2006, AND APPROPRIATING FUNDS THEREFOR.

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

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SECTION 1.
Act of 2010".

Congress assembled:

SECTION 2. Section 2 of Republic Act 9367 is hereby amended to read as follows:

SEC. 2. Declaration Policy- itis hereby declared the policy of the
State to reduce dependence on imported fuels with due regard to
the protection of public health, the environment, and the natural
ecosystems consistent with the country's sustainable economic
growth that would expand opportunities for livelihood by mandating
the use of biofuels as a measure to:

a) Develop and utilize indigenous renewable and
sustainable-sources clean energy sources to reduce dependence on
imported oil.

b) Mitigate toxic and greenhouse gas (GSG) emissions;

) increase rural employment and income; and PROMOTE
IN:

BENEFITS OF BIOFUEL PRODUCTION REDOUND TO THE
COMMUNITIES WHERE THE BIOFUEL PRODUCTION SITES
ARE LOCATED;

d) Ensure the availability of alternative and renewable clean energy
without any detriment to the natural ecosystem, biodiversity and
food reserves of the country, AS WELL AS TO THE TENURIAL
SECURITY AND RIGHT TO LIVELIHOOD id
FARMERS AND FARM W. ARTICULATED _IN
REPUBLIC ACT 9700.

Short Title. - This Act shall be known and cited as the “Biofuels Reform


SECTION 3. Section 3 of RA 9367 is hereby amended to read as follows:

a) AFTA- shall refer to the ASIAN free trade agreement initiated by
the Association of South East Asian Nation;
b) AGRARIAN REFORM - MEANS REDISTRIBUTION OF
LANDS, REGARDLESS OF CROPS OR FRUITS
RODUCED, _TO _ FARME! D LAR
FARMWORKERS WHO ARE LESS, SPECTIVE
TENURIAL ARRANGEMENT, TO INCLUDE THE
TOTALITY OF FACTORS AND SUPPORT SERVICES
DESIGNED TO LIFT THE ECONOMIC STATUS OF THE
BI RIES Al LL_OTHER ARRANGEMENTS
ALTERNA’ THE PHYSICAL REDISTRIBUTION
LANDS, SUCH AS PROD! NOR PROFIT-SHARIN:
)R ADMIN! IN, AND THE DISTRIB IF
SHARES OF STOCKS, WHICH WILL __ALLOW
BENEFICIARIES TO RECEIVE A JUST SHARE OF THE
F F THE LANI EY WORK.
°) ILTURA: - TE! THE
CULTIVATION OF THE SOIL, PLANTING OF CROPS,

im
DONE BY PERSONS WHETHER _NATURAL__OR
JURIDICAL.

d) Alternative Fuel Vehicle/Engine - shall refer to vehicle/engines
that use alternative fuels such as biodiesel, bioethanel, natural
gas, electricity, hydrogen and automotive LPG instead of
gasoline and diesel; Bioethanol fuel - shall refer to ethanol
(C2H30H) produce from feedback and other biomass;

e) Biodiesel - shall refer to Fatty Acid Methyl Ester (FAME) or
mono-alkyl ester delivered from vegetable oil, or animal fats and
other biomass-derived oils that shall be technically proven and
approved by the DOE for use in diesel engines, with quality
specifications in accordance with the Philippine National
Standards (PNS)

f) Bioethanol fuels - shall refer to the hydrous and anhydrous
bioethanol suitably denatured for use as motor fuel with quality
specifications in accordance with the PNS;

9) Biofuel - shall refer to the bioethanol and biodiesel and other
fuels made from biomass and primary used for motive, thermal
power generation, with quality specifications in accordance with
PNS;

h) Biomass- shall refer to any organic matter, particularly cellulosic
or ligno-cellulosic matter, which is available on a renewable or
recurring basis, including trees, crops and associated residues,
plant fiber, poultry litter and other animal wastes, industrial
wastes and biodegradable component of solid waste;

i) DA- shall refer to the Department of Agriculture created under
Executive Order No. 116, as amended;

j) DAR ~ SHALL REFER TO THE DEPARTMENT
AGRARIAN REFORM CREATED UNDER REPUBLIC ACT
6389.

k) Diese/- shall refer to the refined petroleum distillate, which may
contain small amount of hydrocarbon or nonhydrocarbon
additives to improve ignition quality or other characteristic,
suitable for compression ignition engine and other suitable types
of engines with quality specifications in accordance with PNS;



1) DENR - shall refer to the Department of Environment and
Natural Resources created under Executive No. 192, as
amended;

m) DOE - shall refer to the Department of Energy created under
Republic Act No. 7638, as amended;

n) DOLE- shall refer to the Department of Labor and Employment
created under Executive Order No. 126, as amended;

0) DOF- shall refer to the Department of Finance created under
Administrative Orders No. 127 and 127-A;

p) DOST- shall refer to the Department of Science and Technology
created under Republic Act no. 2069

q) DOTC - shall refer to the Department of Transportation and
Communication created under Executive Order No. 125-A, as
amended;

r) DTT- shall refer to the Department of Trade and Industry
created under Executive Order No. 133;

s) FARMER - FARMWORKER IS A NATURAL PERSON WHO
RENDERS SERVICE FOR VALUE AS AN EMPLOYEE OR

BORER IN AN L ENTE! FARM
REGARDLESS OF WHETHER HIS/HER COMPENSATION
IS_PAID ON A_DAILY, WEEKLY, MONTHLY OR
“PAKYAW" BASIS. THE TERM INCLUDES __AN

INDIVIDUAL WHOSE WORK HAS CEASED AS A
ENCE OF, OR_IN ECTION WIT!

PENDING AGRARIAN DISPUTE AND WHO HAS NOT
OBTAINED A SUBSTANTIALLY EQUIVALENT _AND
REGULAR FARM EMPLOYMENT.

t) FARM WORKER - NATURAL PERSON _WHO__IS
EMPLOYED, _WHETHER ON A PERMANENT OR
SEASONAL BASIS BY AN AGRICULTURAL ENTERPRISE
OR FARM.

u) Feedstock - shall refer to the organic sources such as molasses,
sugarcane, cassava, coconut, jatropha, sweet sorghum or other
biomass used in the production of biofuels;

v) FOOD SECURITY — REFEI A _CONDITI! ERE
ALL PEOPLE AT ALL TIMES HAVE PHYSICAL AND
ECON T \UFFICIENT, FE AND
Nl ID THAT MEETS THEIR DIETARY
NEEDS AND FOOD Zz ES FOR AN A‘

HEALTHY LIFE.

W) Gasoline — shall refer to volatile mixture of liquid hydrocarbon,
generally containing small amounts of additives suitable for use
as fuel in spark-ignition internal combustion engines with quality
specifications in accordance with the PNS;

x) Motor fuel shall refer to all volatile and inflammable liquids and
gas produced, blended or compounded for the purpose of, or
which are suitable or practicable for, operating motor vehicle;

y) MTBE- shall refer to Methyl Tertiary Butyl Ether;

2) NBB or Board - shall refer to the National Biofuel Board created
under Section 8 of this Act ;

aa) Oi! Company - shall refer to any entity that distributes and sells
petroleum fuel products;

bb) Oxygenate - shall refer to substances, which, when added to
gasoline, increase the amount of oxygen in that gasoline blend;

cc) PNS- shall refer to the Philippine National Standard; consistent
with section 26 of R.A. No. 8749 otherwise known as the
‘Philippine Clean Air Act of 1999;

dd) Renewable Energy Sources - shall refer to energy sources that
do not have an upper limit on the total quantity to be used. Such
resources are renewable on a regular basis; and

ee) RURAL WOMEN REFER TO WOMEN WHO ARE
ENGAGED DIRECTLY OR INDIRECTLY IN FARMING



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AND/OR FISHING AS THEIR SOURCE OF LIVELIHOOD,
wi IER PAID OR UNPAID, REGULAR OR SEz
OR FOOD ARATI MAN.
EHOL! RING Ft E CHILDREN, Al THER
SIMILAR ACTIVITIES.
ff) WTO- shall refer to the World Trade Organization.

SECTION 4, Sec. 8 of RA 9367shall hereby read:

The National Biofuel Board is hereby created. It shall be composed
of the Secretary of the DOE as chairman and the Secretaries of the
DTI, DOST, DA, DOF, DOLE, THE DAR, and the Administrators of
the PCA, and the SRA, as members.

The DOE Secretary, in his capacity as Chairperson, shall, within one
month from the effectivity of this Act, convene the NBB.

THE BOARD SHALL ALSO BE COMPOSED OF THREE (3)
Fe Oa SecA NT CP TST
‘ROM LUZON, AND NAC
a ENDORSED BY THE NATIONAL _ANTI_POVERTY
MMI’ IN MERS AND RFOLK R,
PROVIDED \T_LE/ INE OF THEM SHAI
M_INDIGEN' PROVIDED ER TH
F THEM SHALL COME FROM A DULY RI NIZED
NATION) IZATION OF RUI MEN

The Board shall by assisted by a Technical Secretariat attached to
the Office of the Secretary of the DOE. It shall be headed by a
Director to be appointed by the Board. The number of staff of the
Technical Secretariat and the corresponding positions shall be
determined by the Board, subject to approval by the Department of
Budget and Management (DBM) and existing civil services rules and
regulations.

SEC. 5. Section 11 of RA 9367 shall hereby read:

SEC. 11. Role of Government Agencies. - To ensure the
effective implementation of the NBP, concerned agencies shall
perform the following functions:

a) The DOF shall monitor the production and importation of biofuels
through the Bureau of Internal Revenue (BIR) and the Bureau of
Customs (BOC);

b) The DOST and the DA shall coordinate in identifying and
developing viable feedstock for the production of biofuels;

¢) The DOST, through the Philippine Council for Industry and Energy
Research and Development (PCIERD), shall develop and implement
a research and development program supporting a sustainable
improvement in biofuel production and utilization technology. It
shall also publish and promote related technologies developed
locally and abroad.

d) The DA through its relevant agencies shall:

(1) Within three months from effectivity of this Act, develop a
national program for the production of crops for use as feedstock


BUWNE

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supply. For this purpose, the Administrators of the SRA and the PCA,
and other DA-attached agencies shall, within their authority develop
and implement policies supporting the Philippine Biofuel Program
and submit the same to the Secretary of the DA for consideration;

(2) Ensure increased productivity and sustainable supply of biofuel
feedstocks. It shall institutes program that would guarantee that a
sufficient and reliable supply of feedstocks is allocated for biofuel
production; and

(3) Publish information on available and suitable areas for
cultivation and production of such crops.

e) The DOLE shall:

(1) Promote gainful livelihood opportunities and facilitate productive
employment through effective employment services and regulation;

(2) Ensure the access of workers to productive resources and social
coverage; and

(3) Recommend plans, policies and programs that will enhance the
social impact of the NBP.

f) The Tariff Commission, in coordination with the appropriate
government agencies, shall create and classify a tariff line for
biofuels and biofuel-blends in consideration of WTO and AFTA
agreements; and

g) The local government units (LGU) shall assist the DOE in
Monitoring the distribution sale in use of biofuels and
biofuel-blends; LIKEWISE THEY SHALL ALSO ENSURE THAT
THE DEVELOPMENT __OF __BIOFUEL__ FEEDSTOCK
Le

AND Pi EN R
EI

INDER. IDS ALRI IST
To A IRM _BEN! HALL
ITE_A_Ni INAL_REGI! LL E
LTURAL BE USED FOR B:
FEEDST! DI IN OR ERTED IOFUEL
PRODUCTION SITES.

i) THE DENR SHALL ENSURE THAT APPLICATIONS FOR

BIOF! ‘K PRODI IN__AND FUEL
PROD! IN SHALL INCLUDE AN ENVIRONMENTAL
IMPA YY (EIS). LIKEW) ISTIN' SLOFUEL
PRODU! EEMENTS SHALL. BJECTE!
RONMENTAL A ASSESSMENT. ALL
APPLI INS FOR BIOFUEL K PR IN,
REGARDLE: F_LAND ARI HALL _SEt AN
ENVIRONME! IMPLIANCE ICATE, WH:
HALL SET SOCIO-CU! L_IMPACT AS ONE OF THE

CRITERIA FOR ISSUANCE.


eV ausene

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Section 6. There shall be incorporated after Section 11 of RA 9367 the following provisions:

Section 12. _BIOFUEL__ FEEDSTOCK __ PRODUCTION
AGREEMENTS, WHEN THE SUBJECT LANDHOLDING IS
CARP-DISTRIBUTED LAND, SHALL BE MADE _DII Y
WITH THE AGRARIAN REFORM BENEFICIARY, WHO SHALL
BE A PARTY TO THE CONTRACT; PROVIDED THAT PI

AGRICULTURAL LANDS SUBJECT RP_SHALL FIRST
INDERGO THE LAND DISTRIBUTION AND A‘ ITION
PROCE: F THE PROGRAM BEFORE IT ED

BIOFUEL PRODUCTION. _LEASEBACK __AND _OTHER
|-REDISTRIBUTIVE SCHEMES SHALL REBY BE
PROHIBITED. BIOFUEL AGRI-BUSINESS AGREEMENTS
OVER CARP LANDS SHALL BE SUBJECT TO THE APPROVAL
OF DEPARTMENT OF AGRARIAN REFORM, VIDED
THAT Ni (EEMENT SHALL BE APPROVED WIT!
[PULATION OF THE MINIMUM LEASE RENTAL WH:
LL_BE BASED ON AN Et E SHAR} STE!
LL TAKE IN INT THI DI IF
THE LAND, SISTING M. AND ZONAL VALI
ENVIRONMENTAL CONDITIONS AND: ECONOMIC AND
VIDED ER
PRIOR! a IVI \LIFIED. WIL
ARB’S AND THEIR DEPENDENTS TO BE HIRED AS
AGRICULTURAL WORKERS IN THE ENTERPRISE AND
SHALL BE COMPENSATED _IN ACCORDANCE _WITH
LABOR LAWS _AND POLICIES; _PROVIDED
F PRI 1D IN

IF |EURE P FAI
LELY B' IVESTOR; D)

IRTHE

FINALLY THAT NO CONTRACT FOR BIOFUEL FEEDSTOCK

PRODUCTION SHALL _EXCEED A PERIOD OF FIVE (5)

YEAI E FOR AN! Pe
VAI TAN

INSONi IAL
TED BY IOF ARD, IN
WITH THE VERN! DE,
FOR TH F_PROPERLY
IDEAL FOR BIOFUEL FEEDSTOCK RUSTON AND
LAND: EING DEVELOPED THE
PROVIDED THAT THIS INVENTORY SYSTEM SHALL BE
|ASED WITHIN SIX (6) MON M_THE Pi
F_TH: |ADE AVAILABLE TO THE
PUBLIC; PROVIDED THAT _IN Ni HALL
L_LANDS TO BE DEVELOPED
BIOFUEL PROD! EED FIVE PERC! ‘%o) OF
THE TOTAL AGRICULTURAL LAND AREA OF THE
PHILIPPINES.

Sec. 14. CREATION OF AGRI-PEP FUND. EACH NEW
BIOFUEL FEEDSTOCK APPLICATION SHALL BE LEVIED A
TAX_EQUIVALENT TWO (2) PERCENT OF THE FAIR
MARKET VALUE OF THE LANDHOLDING TO BE USED FOR
BIOFUEL PRODUCTION, PROVIDED THAT PROCEEDS
THEREWITH SHALL BE USED FOR THE SOLE PURPOSE OF
AGRICULTURAL PRODUCTIVITY AND ENVIRONMENTAL
PROTECTION __(AGRI-PEP) WITHIN __THE __LOCAL
)VERNMENT UNITS WHERE THE BIOFUEL S! ARE Tt
BE CREATED; PROVIDED FURTHER THAT USE OF SUCH



FUND BY THE LOCAL GOVERNMENT UNITS MUST BE
CONSISTENT WITH THE PURPOSE OF THE FUND AND
WITH ITS LOCAL DEVELOPMENT AND LAND USE PLAN;
PROVIDED FINALLY THAT THE USE OF THE FUND SHALL BE
DETERMINED THROUGH ACTIVE COLLABORATION WITH
col NITY sTAKEHOLDE! NON-GOVERNMENT
ORGANIZATIONS AND PEOPLE'S ORGANIZATIONS.

Sec. 15. PROHIBITED ACTS. ANY PERSON FILES AN
APPLICATION FOR _BIOFUEL PRODUCTION OR FOR

“EDS ‘K_PROD! IN_WITH_ INTENT TO
AVOID THE APPLICATION OF AGRARIAN REFORM LAWS
AND TO DISPOSSESS FARMERS OF TI IDS TILLED BY
THEM, NY Pi IN WHO AIDS AND ABETS TI ME,
SHALL BE PUNISHED BY IMPRISONMENT OF NOT LESS
THAN SIX (6) YEAR: N IN TWELVE (12
YEARS OR A FINE OF NOT LESS THAN INDRED
THOUSAND (200,000) PESOS AND NOT MORE THAN ONE
MILLION _(1,00¢ Pl R__BOTH, AT THE

DISCRETION OF THE COURT.

ANY PERSON WHO Al VI IN

VIOLATION OF SECTION 12 and 13 OF THIS ACT SHALL BE

PUNISHED BY IMPRISONMENT OF NOT LESS THAN ONE
MONTI MORE THAN THRE!

FINE TH. E

AND SH, Bi LLY

Section 7. Funding. - The initial funding requirements for the implementation of the provisions
of this Act shall come from the budgets of the DAR, DA, with respect to their respective functions
herein. The subsequent funding thereof shall be incorporated into their respective regular
appropriations.

Section 8. Implementing Rules and Regulations. There is hereby created an inter-agency
committee headed by the DAR and composed of all government agencies enumerated in Section
5 tasked to promulgate the Implementing Rules and Regulations within 30 days from the passage
of this Act.

Section 9. Separability Clause. — If any provision of this Act shall be held unconstitutional or
invalid, the other provisions not otherwise affected shall remain in full force and effect.

Section 10. Repealing Clause. - Any law, decree, rules and regulations which are inconsistent
with or contrary to the provisions of this Act are hereby amended or repealed.

Section 11. Effectivity Clause. ~ This Act shall take effect upon its publication in at least two (2)
national newspaper of general circulation.

Approved,