RULES ON THE CARRIAGE OF LOGS FROM THE PHILIPPINES

Pursuant to Section 2 of Executive Order No. 769 dated January 19,
1982, the following rules on the carriage of logs from the Philippines
are hereby promulgated:

1.  Scope and Routes Covered — These rules shall apply in
the ocean carriage of logs from the Philippines to Japan, Korea and
Taiwan and other foreign destination[s] that MARINA may consider in the
future.

2.  Definition of Terms — As used herein, the following terms shall have the following meaning:

Authority — the Maritime Industry Authority created under Presidential Decree No. 474.

Philippine Shipping Lines — shipping lines organized and existing under and by virtue of Philippine laws.

Philippine Flag Carrier — shall refer to
vessel(s) flying the Philippine flag provided they are (1) owned or
chartered, (2) registered, and (3) operated by the Philippine shipping
companies.

Foreign Flag Carrier — shall refer to vessels other than Philippine flag carrier.

Association — the Filipino Shipowners’ Association.

Log — round cut timber including falcata logs originating from the Philippines.

3.  Participation in the Trade —

(a)   At least 50% of the total annual log trade for each route
covered shall be carried by the Philippine flag carriers.  Volume and/or
freight shall be the basis for determining the percentage.

(b)   Philippine shipping lines owning/operating log carriers in
the trade shall submit their said vessel for accreditation by the
Authority through the Association. Similarly, log carriers from other
countries shall be accredited by the Authority.  Only duly accredited
log carriers may participate in the log trade.

4.  Agreement — The Association may enter into agreements
with shipping associations concerned of other countries on the other 50%
log cargo for each route covered provided, that, in no case shall the
share of Philippine flag vessels be less than 50% of the total annual
cargo.  Such an agreement should at least include sailing frequencies,
overcarriage and undercarriage, system for monitoring carriage
performance of the parties, penalties and sanctions.  The Agreement
shall be filed with and approved by the Authority prior to its
implementation.  Once approved, said agreement shall govern their
sharing and other agreements.

If an agreement is not concluded, within thirty (30) days from date
of effectivity hereof, the cargo sharing scheme shall be implemented by
the Authority through the waiver system provided for, below. Additional
rules and regulations may be issued to correct over-carriage and
undercarriage, by the Philippine log carriers and to enable them to
carry their respective share.

5.  Waiver — Shippers/consignees are required to use only
log carriers accredited by the Authority. If an Agreement mentioned in
the immediately preceding paragraph is not concluded,
shippers/consignees are required to use Philippine flag carriers. Said
requirement, however, may be waived by the Authority upon written
application in instances when the services of a suitable Philippine log
carrier are not available.

6.  Submission of Information — All Philippine and foreign
shipping lines operating log carriers in the log trade shall submit to
the Authority within sixty (60) days from effectivity hereof through the
Association the following:

(a)   List of vessels, owned/operated or chartered which are
employed in the log trade. In the case of Philippine flag carriers, the
list shall include the registered name, owner, type, tonnage, speed,
cargo capacity, date constructed, date registered in the Philippines.

(b)   Volume of log loaded by vessel, port of loading and port of exit.

(c)   Name of consignees of logs, volume and ports of discharge.

(d)   Any change in the above and any other information the Authority may require.

7.  Accreditation Fee — there shall be assessed and
collected by the Authority, an annual accreditation fee of One Hundred
U.S. dollars ($100.00) per vessel. Philippine shipping lines may pay the
fee in peso equivalent measured at the prevailing rate of exchange at
the time of accreditation.

8.  Responsibility of the Association — The association shall assist the Authority on the following:

(a)   Screening of log carriers for accreditation;

(b)   Establishing an equitable log cargo sharing scheme;

(c)   Such other, requirements that the Authority may prescribe from time to time;

9.  The Authority shall furnish the Bureau of Forest Development
and the Bureau of Customs with a complete list of accredited vessels and
any amendment or change thereto.

10.           Other Implementing Agencies — Pursuant to
Section 3 of Executive Order No. 769, the following agencies are hereby
requested to assist the Authority in the implementation of this order
specifically in the manner herein below provided.

(a)   The Bureau of Forest Development shall not issue a
Certificate of Inspection to log exporters unless the log shipment is
loaded on board vessels accredited by the Authority, and, in case no
agreement is concluded under Section 4, a waiver must be secured from
the Authority if shipment is loaded on foreign log carriers.

(b)   The Bureau of Customs shall not issue an Authority to Load
to log export shipment unless the same is loaded or to be loaded on
board vessels accredited by the Authority, and a waiver is secured from
the Authority if shipment is loaded on foreign log carrier.

11.           Fines and Penalties — Log carriers which
shall load log shipments without first being accredited by the Authority
shall be subject to a fine in the amount not exceeding Ten thousand
(P10,000), without prejudice to the imposition by the appropriate
government agency of the proper penalty under their own jurisdiction.

12.           Effectivity — These rules shall take effect
thirty (30) days after its publication in a newspaper of general
circulation in the Philippines.

Adopted: 23 Aug. 1984

(SGD.) VICTORINO A. BASCO	(SGD.) JOSE P. DANS, JR.
Administrator	Minister of Transportation and Communications