RULES AND REGULATIONS GOVERNING THE LEASE OF PUBLIC LANDS FOR FISHPOND DEVELOPMENT

Pursuant to the provisions of Sections 3, 6, 12, 13, 45, 46, 50, 55,
57, 65 and 107 of Republic Act No. 8550, otherwise known as the
Philippine Fisheries Code of 1998, and Section 4 of Republic Act No.
7881, the following rules and regulations governing the lease of public
lands for fishpond development purposes are hereby promulgated:

SECTION 1.       Definition of terms and phrases. — For purposes of this Order, the following terms and phrases shall mean:

1.1)     Fishpond Lease — an agreement entered into by
and between the Secretary of Agriculture and qualified fishpond
applicant for the use of public land for fishpond development purposes
for a period of twenty-five (25) years.

1.2)     Permanent improvement — improvements introduced in the fishpond area which cannot be separated/removed therefrom without causing damage thereto.

1.3)     Temporary improvement — improvements introduced
in the fishpond which can be removed/separated therefrom without causing
damage thereto or diminish the usefulness thereof.

1.4)     Fishpond — a land-based facility enclosed with earthen, stone or concrete material to impound water for the growing of fish.

1.5)     Fish — includes not only finfish but also
mollusks, crustaceans, echinoderms, marine mammals, and all other
species of the aquatic flora and fauna.

1.6)     Occupied — actual or constructive possession over the fishpond area.

1.7)     Unoccupied — not occupied by any person; or is
occupied by a person disqualified to acquire or enter upon it, or by a
person who, being qualified to occupy or use it, refuses or fails to
exercise his preferential right thereto.

1.8)     Mangroves/tidal swamps/marshes — a community of
intertidal plants including all species of trees, shrubs, vines and
herbs found on coasts, swamps, or border of swamps.

1.9)     Foreshore land — 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 by a beach scarp or berm.

1.10)   Vegetated with mangrove species — an intertidal
area of one (1) hectare or more with a least ten (10) percent mangrove
crown cover in each hectare (i.e., when the sun is directly overhead at
high noon, the shadows cast by mangrove species cover at least ten [10]
percent of the area).

1.11)   Suitable for fishpond purposes — meeting all
accepted criteria on elevation, soil type, soil depth, topography and
water supply required for successful fishpond development.

1.12)   Undeveloped fishpond area — areas not enclosed by
dikes; or enclosed by dikes without functional water control
structures; or those enclosed by dikes with functional water control
structures but the water level required for production on a commercial
scale cannot be maintained either by high tides or by pumping; or a
larger area enclosed only with a simple perimeter dike which has not
been subdivided, which may or may not be vegetated with mangrove species
and is not producing on a commercial scale.

1.13)   Developed fishpond — area enclosed by dikes with
functional water control structures not vegetated with mangrove species
and producing on a commercial scale; but not a fully developed fishpond.

1.14)   Fully developed fishpond — a clean, leveled area
enclosed with dikes at least one foot higher than the highest flood
water level in the locality and strong enough to resist water pressure
at the highest flood tide; consists of at least a nursery pond, a
transition pond, a rearing pond, or a combination of any or all of said
classes of ponds and a functional water control system and producing in a
commercial scale.

1.15)   Commercial-scale producing fishpond — a fully developed fishpond producing not less than 1000 kilograms of fish per hectare per year.

1.16)   Person — natural or juridical entities such as individuals, associations, partnerships, cooperatives or corporations.

1.17)   Fisherfolk — people directly or personally and
physically engaged in taking and/or culturing and processing fishery
and/or aquatic resources.

1.18)   Fisherfolk cooperative — a duly registered
association of fisherfolk with a common bond of interest, who have
voluntarily joined together to achieve a lawful common social or
economic end, making equitable contribution to the capital requirement
and accepting a fair share of the risks and benefits of the undertakings
in accordance with universally accepted cooperative principles.

1.19)   Fisherfolk organization — an organized group,
association, federation, alliance or an institution of fisherfolk which
has at least fifteen (15) members, a set of officers, a constitution and
by-laws, an organizational structure and a program of action.

1.20)   Small and medium enterprise — any business
activity or enterprise engaged in industry, agribusiness and/or
services, whether single proprietorship, cooperative, partnership or
corporation whose total assets, inclusive of those arising from loans
but exclusive of the land on which the particular business entity’s
office, plant equipment are situated, must have value falling under the
following categories:

Micro       :           less than P1,5000,001
Small       :           P1,500,001 – P15,000,000
Medium   :           P15,000,001 – P60,000,000

1.21)   Environmental Compliance Certificate — a permit
issued by the President or his duly authorized representative certifying
that the new fishpond development will not bring about unacceptable
environmental impact and that the proponent has complied with the
requirements of EIS system.

1.22)   Department — Department of Agriculture

1.23)   Secretary — Secretary of Agriculture

1.24)   Bureau — Bureau of Fisheries and Aquatic Resources

1.25)   Director — Director of Fisheries and Aquatic Resources

1.26)   Regional Office — BFAR Regional Office

1.27)   Regional Director — BFAR Regional Director

1.28)   Authorized representatives — include the BFAR
Regional Director or other officials of the regional office designated
by the Regional Director and other officials and employees of the BFAR
or the Office of the Secretary duly designated by the Director or the
Secretary.

1.29)   Resource rent — the difference between the value
of the products produced from harvesting a publicly owned resource less
the cost of producing it, where cost includes the normal return to
capital and normal return to labor.

SECTION 2.       Lease of Public Lands for Fishpond Development
. — A Fishpond Lease Agreement (FLA) must be secured by a person who
shall occupy or use any portion of the public lands declared by the
Secretary of Environment and Natural Resources as available for fishpond
purposes and released to the Bureau for its management and disposition
in accordance with the provisions of this Order.

SECTION 3.       Persons Who May Apply for Lease . — The following persons may apply for fishpond lease:

a)         Citizens of the Philippines who are at least twenty-one years of age;

b)         Corporations duly incorporated and registered under
the laws of the Philippines at least sixty per centum (60%) of the
capital stock or interest of which belongs to citizens of the
Philippines; and

c)         Fisherfolk cooperatives/associations and small and
medium enterprises duly organized or registered under the laws of the
Philippines.

SECTION 4.       Preference in the Disposition of Public Lands for Fishpond Purposes.
— Upon the effectivity of Republic Act No. 8550, FLAs may be issued for
public lands that may be declared available for fishpond development
primarily to qualified fisherfolk cooperatives/associations. Provided,
however, that in cases of existing FLAs, the current lessees shall be
given priority upon its expiration and shall be entitled to an extension
of another twenty-five (25) years in the utilization of their
respective leased areas. Thereafter, such FLAs shall be granted to any
Filipino Citizen with preference primarily to qualified fisherfolk
cooperatives/associations as well as small and medium enterprises as
defined under Republic Act No. 8289.

SECTION 5.       Size of Fishpond . — The area of fishpond to be leased shall be governed by the following:

a)         An individual may be allowed to lease an area of not exceeding fifty (50) hectares;

b)         Husband and wife living together may be granted an
aggregate area not exceeding fifty (50) hectares: Provided, however,
that husband and wife living separately by virtue of a decree of legal
separation may apply for an area not exceeding fifty (50) hectares each;

c)         A corporation, association or cooperative may be granted an area not exceeding two hundred fifty (250) hectares;

d)         Any branch of the government, person or association
who will engage in fishpond development for scientific, research or
education purposes may be granted an area of not exceeding ten (10)
hectares through a gratuitous permit.

SECTION 6.       Period of Lease . — The lease
shall be for a period of twenty-five (25) years, renewable for another
twenty-five (25) years subject to Sec. 4 of this Order, the terms and
conditions of the lease and other existing fishery laws, rules and
regulations.

SECTION 7.       Preemptive Rights of Heirs. — In
case of the death of the lessee, his spouse and/or children as legal
heirs, provided they are qualified, shall have preemptive rights to the
unexpired term of his Fishpond Lease Agreement, upon filing of a
fishpond application within ninety (90) days from the death of the
lessee subject to the same terms and conditions as originally provided
therein.

SECTION 8.       Initial Requirements in the Filing of Fishpond Application . — The initial requirements for the filing of fishpond lease application are as follows:

a)         Four (4) copies of the sketch plan of the area
released for fishpond purposes with its technical description as
extracted from the Land Classification Map of the Forest Management
Bureau;

b)         In case the area applied for fishpond development is
within the alienable and disposable land under the jurisdiction of the
Land Management Bureau, the comment of that Office must first be secured
to the effect that it interposes no objection to the issuance of a
fishpond lease over the area;

c)         In case of a juridical person, two (2) certified true
copies of Articles of Incorporation or Association duly approved by
government agencies concerned, the primary purpose of which is to engage
in fishpond development;

d)         Certificate of bank deposit issued by any banking
institution showing that the applicant has an initial capital in cash of
P10,000.00 per hectare or fraction thereof and/or its equivalent
assets;

e)         An affidavit declaring that the initial capital
deposited in the Bank shall be used exclusively for the development of
the area; and

f)          Certification from the DENR that the area is available for fishpond development.

SECTION 9.       Application Fee. — A
non-refundable application fee of One Thousand (P1,000.00) pesos shall
be paid to the Bureau or its Regional Offices upon filing of the
application which shall be remitted to the National Fisheries Research
and Development Institute (NFRDI).

SECTION 10.    When Application is Considered Filed
. — An application for lease shall be considered filed on the date and
time the original thereof is actually received in the Bureau or its
Regional Offices where the area is located. Applications with incomplete
initial requirements shall not be processed.

SECTION 11.    Priority Right of Application . — In determining the priority applications, the following rules shall be observed:

a)   When two or more applications are filed for the same area
which is unoccupied or unimproved, the first applicant shall have the
right of preference thereto.

b)   Between an applicant for and a bona fide occupant of an
area available for fishpond purposes, the latter shall have the right of
preference to the said area, in which case, the actual occupant if
qualified shall be advised by the Director to file a fishpond
application within thirty (30) days from his receipt or a notice to that
effect. If the occupant is not qualified under the law to apply for the
land, or loses his rights for failure or refusal to present his
fishpond application within the time granted above, he shall be required
to vacate the premises.

c)   If two or more applications are filed for the same area on
the same date, the applicant who can best meet the requirements of the
fisheries laws and regulations based on financial capacity and/or
qualification shall have the right of preference thereto.

SECTION 12.    Final Requirements for the Issuance of a Lease. — A fishpond lease may be issued in favor of an applicant upon submission of the following:

a)    Twelve (12) copies of the survey plan of the area duly
approved by the Director of Lands or Regional Director of Lands, or if
under cadastral survey, the same shall be certified by the Bureau of
Lands;

b)    Duly accomplished fishpond lease contract form duly acknowledged before a Notary Public;

c)    Certifications issued by the BFAR Regional Director and
the Regional Trial Court in the judicial district where the area applied
for is located to the effect that the same is not involved in any
pending administrative and judicial case, respectively;

d)    Payment of cash bond deposit and initial rental;

e)    Certification issued by the BFAR Regional Director to the
effect that the area applied for is not subleased to any other person/s;
and

f)     Environmental Compliance Certificate from the DENR.

SECTION 13.    Terms and Conditions of the Fishpond Lease.

a)   The fishpond area covered by the lease shall be confined
within the perimeter of the parcel of land described therein and shall
be utilized by the LESSEE for fishpond purposes only.

b)   The area subject of the lease is public land to the best
knowledge and belief of the parties therein, and accordingly, the LESSOR
shall not be responsible for any loss occasioned by legal award of the
area to any claimant recognized by the Courts.

c)   The fishpond covered by the lease shall be so constructed
as not to interfere with the free navigation of any stream, river,
migration paths, lakes or bays flowing through or adjoining the
fishpens, fish cages, fish traps and fishponds or to impede the flow and
ebb of the tide to and from the area. Any construction made in
violation hereof shall be removed upon order of the Department, thru
BFAR, in coordination with the other government agencies concerned at
the expense of the LESSEE, or occupants thereof, whenever applicable.

d)   Annual rentals shall be set at levels that reflect resource
rent accruing from the utilization of resources and shall be determined
by the Department thru BFAR. Failure to pay the annual rentals on the
date the same are due shall subject the LESSEE to the corresponding
surcharges as provided for in the regulations. For failure to pay the
annual rentals and surcharges for two (2) consecutive years without
justifiable cause, the lease shall be cancelled or terminated, and the
bond therein forfeited in favor of the government without prejudice to
any action the government may take to recover rentals due including
surcharges.

e)   The LESSEE must introduce improvements in the area within
One Hundred Eighty (180) Days from the date of issuance of the lease,
otherwise the same shall be cancelled. The area leased shall be
developed and producing on a commercial scale within three (3) years
from the approval of the FLA; Provided, however, that all areas not
fully producing within five (5) years from the date of approval of the
lease shall automatically revert to the public domain for reforestation.

f)    The leasehold rights of the LESSEE may be transferred
covering all or any portion of the fishpond area herein granted to
another party subject to the prior written approval of the LESSOR,
provided that the duration of the lease shall be for the unexpired
period of the original lease.

g)   The leasehold rights of the LESSEE may be assigned to any
financial institution to secure a loan for the development of the area
covered by the lease subject to the prior written approval of the
lessor.

h)   The LESSEE is prohibited to sublease all or any portion of
the area covered by the lease through any form of arrangement that
partakes the nature of a sub-lease.

i)    The LESSEE shall undertake reforestation in river banks,
bays, streams and seashore fronting the dike of his fishpond to at least
fifty (50) meters strip whenever applicable in consideration of such
area/s, topography elevation and water depth and subject to future rules
that may be promulgated thereon by the DENR.

j)    The LESSEE shall provide, facilities that will minimize
environmental pollution, i.e., settling ponds, reservoirs: Provided,
that failure to comply with this provision shall mean cancellation of
FLA.

k)   Upon cancellation of the lease for cause, the ejectment of
the LESSEE and/or occupants from the area shall be ordered by the LESSOR
or his authorized representative. Failure to vacate the area shall
subject the LESSEE and/or occupants thereof to applicable provisions of
laws, rules and regulations thereon, and all existing improvements shall
be forfeited in favor of the government subject to the rights of the
assignee-bank, if applicable as provided in Section No. 13, paragraph
(g) of this Order.

l)    When applicable, in the event of default in the payment of
the loan by the LESSEE and the assignee-bank enforces the terms and
conditions of the assignment of rights, the said assignee-bank shall
have a period of five (5) years thereafter to hold the area covered by
the lease for the purpose of liquidating the debt, disposing of the
improvements therein, and negotiating for the transfer of assignment of
the rights therein to other qualified transferees who shall comply with
the requirements of the LESSOR. For this purpose, the assignee-bank
shall notify the LESSOR when such enforcement will commence. However, if
after the period of five (5) years has lapsed and no transfer of rights
has been effected, then the area shall be automatically reverted to the
LESSOR for proper disposition, subject to the rights of the assignee
bank.

m)  The LESSEE shall keep a record of operations and transaction
of the fishpond, which record shall be audited by an independent
auditor, commissioned by the LESSEE.

n)   The LESSEE shall allow the duly authorized representative
of the LESSOR to inspect and validate all the records required in the
operations of the fishpond.

o)   The lease shall be subject to the existing laws, rules and regulations on the matter.

SECTION 14.    Rentals, When Due and Payable. — Upon the effectivity of this Order, the annual rentals shall be at the rate prescribed below:

First year, starting from January 1, 2000 until December 31,
2000, the annual rental shall be at the rate of Five Hundred Pesos
(P500.00) per hectare or a fraction thereof; for the second year, the
annual rental shall be at the rate of Six Hundred Pesos (P600.00) per
hectare or a fraction thereof; for the third year, the annual rental
shall be at the rate of Seven Hundred Pesos (P700.00) per hectare or a
fraction thereof; for the fourth year, the annual rental shall be at the
rate of Eight Hundred Pesos (P800.00) per hectare or a fraction
thereof; and for the fifth year, the annual rental shall be at the rate
of One Thousand Pesos (P1,000.00) per hectare or a fraction thereof and
then yearly thereafter. The rental must be paid not later than the last
working day of the month of January of each year: Provided, however,
that the BFAR shall conduct a study on resource rent of public lands for
fishpond development. The result of this study shall then be the basis
for the rates of rentals for fishpond areas.

SECTION 15.    Surcharges for Default of Payment of Rentals
. — Non-payment of annual rental when it becomes due and payable shall
be subject to a surcharge in accordance with the following schedules:

Rentals paid from February 1 to March 31	–	10%
Rental paid from April 1 to June 30	–	15%
Rental paid from July 1 to September 30	–	20%
Rental paid from October 1 to December 31	–	25%
Rental paid after one (1) year	–	40%

SECTION 16.     Cash Bond Deposit. Before a lease
is issued, the applicant shall, as a guaranty of good faith in filing
the application and for the satisfactory compliance with the existing
fishery laws, rules and regulations promulgated thereunder and of the
terms and conditions of the lease, be required to deposit a cash bond
with the Bureau or its Regional Offices. The cash bond shall be at the
rate of One Hundred (P100.00) pesos per hectare or fraction thereof:
Provided, however, that after five (5) years and the LESSEE shall have
fully developed the area and made producing in commercial scale and has
satisfactorily complied with all the requirements and the terms and
conditions of the lease, the Director, may credit same for payment of
annual rentals.

SECTION 17.    Incentives . — Fishpond Lease
Agreement holders are mandated to execute within six (6) months from the
effectivity of the Order, an incentive plan with their regular fishpond
or prawn farm workers or fishpond or prawn farm workers’ organization,
if any, whereby seven point five percent (7.5%) of their net profit
before tax from the operation of the fishpond or prawn farms are
distributed within sixty (60) days at the end of the fiscal year as
compensation to regular and other pond workers in such pond workers in
such ponds over and above the compensation they currently receive.

In order to safeguard the rights of the regular fishpond or prawn
farm workers under the incentive plan, the books of the fishpond or
prawn farm owners shall be subject to periodic audit or inspection by
certified public accountants chosen by the workers.

SECTION 18.    Annual report on fishpond development, operation and production.
— Within ten (10) days after six (6) months from the approval of the
lease and every one (1) year thereafter, the LESSEE shall submit to the
Director through the Regional Director concerned, an annual report under
oath relative to the fishpond development, operation and production,
including the species and volume thereof, for statistical and evaluation
purposes. Said report shall be in a prescribed form duly verified and
certified to by the Regional Director concerned or his duly authorized
representative.

SECTION 19.    Grounds for the Rejection of Application for Lease. — An application for lease shall be rejected on any of the following grounds:

a)      Lack/loss of interest of the applicant;

b)      Applicant is not qualified;

c)      Failure to comply with any of the requirements of
Section 11 of this Order within sixty (60) days from the receipt of
Notice of Compliance;

d)      Death of the individual applicant;

e)      Dissolution of juridical person;

f)       Fraudulent, false or misleading statements or information in the application;

g)      Occupying or introducing improvements in the area applied for without a fishpond lease agreement; and

h)      When public interest so requires

SECTION 20.    Conditions on Assignment/transfer of Leasehold Rights and Interests. — The assignment/transfer may be allowed under the following conditions:

a)   The assignor/transferor has held the lease for a period of not less than three (3) years from the approval thereof;

b)   The area subject of the proposed assignment/transfer has
been developed and producing in commercial scale, except when the area
has been abandoned by the lessee-assignor due to the enforcement of the
assignment by the assignee-bank;

c)   The assignor/transferor has not violated any provisions of
the fishery laws, rules and regulations relative to fishpond development
including the terms and conditions of the lease;

d)   The assignee/transferee is qualified to hold the lease pursuant to the provisions of this Order;

e)   The area subject of the assignment/transfer is not involved in any administrative or judicial case; and

f)    The transferee shall enjoy only the privilege to hold the
lease for the unexpired period thereof and shall assume the obligations
of the transferor relative to the said lease.

SECTION 21.     Requirements on Assignment/transfer of Leasehold Rights. — The assignee/transferee shall submit the following requirements:

a)         An application form duly accomplished;

b)         Original/duplicate copy of the Deed of
Assignment/Transfer of Leasehold Rights and Interests and Assumption of
Obligations;

c)         Certified true copies of original official receipts of updated payment of rentals;

d)         Payment of assignment/transfer fee in the amount of
ten pesos (P10.00) per hectare or fraction thereof, but in no case shall
it be less than One Hundred (P100.00) pesos;

e)         Payment of application fee of P1,000.00;

f)          Posting of required cash bond deposit;

g)         Latest report of improvements duly inspected and
verified by the Regional Director or his duly authorized representative;

h)         Twelve (12) copies of the survey plan of the area
under his/her name duly approved by the Director of Lands or Regional
Director of Lands.

i)          Fishpond lease contract form duly accomplished and acknowledged before a Notary Public;

j)          Certification issued by the BFAR Regional Director
and Regional Trial Court in the judicial district where the area applied
for is located to the effect that the same is not involved in any
pending administrative and judicial case, respectively; and

k)         Affidavit and certification executed and issued by
the applicant and BFAR Regional Director respectively, to the effect
that the area applied for is not subleased to any person/s.

SECTION 22.    Grounds for Cancellation/Termination of Lease . — A lease shall be cancelled or terminated on any of the following grounds:

a)         Violation of existing fishery laws, rules and regulations and other applicable laws;

b)         Death of the lessee, subject to the rights and legal heirs under Section 7 of this Order;

c)         Dissolution of juridical person;

d)         Fraudulent, false or misleading statements or
information in the application and/or other documents submitted prior to
or after the issuance of the lease;

e)         Failure to submit the yearly reports;

f)          Failure to pay the rentals and surcharges for two (2) consecutive years;

g)         Development of the area other than for fishpond purposes;

h)         Failure to comply with the rules and regulations, terms and conditions of the lease;

i)          Sublease of the area or any portion thereof;

j)          LESSEE has acquired citizenship in another country during the existence of the FLA; and

k)         Failure of the LESSEE to provide facilities that will
minimize environmental pollution, i.e., setting ponds, reservoirs.

SECTION 23.    Disposition of Improvements . —
When the lease had been cancelled or terminated and the leasehold rights
therein had not been assigned to any government financing institution
the existing improvements on the area subject of said lease shall be
considered automatically forfeited in favor of the government which
shall be disposed of by the Bureau pursuant to applicable laws, rules
and regulations on the matter.

SECTION 24.    Abandoned, Undeveloped or Underutilized Fishponds
. — Fishpond areas covered by an existing FLA which have been
determined jointly by DA, DENR and LGUs concerned as abandoned,
undeveloped or underutilized portions after five (5) years from the
issuance of the FLA, can be reverted to their original mangrove state
and that necessary steps should be made to restore such areas to their
original mangrove state.

SECTION 25.    Unlawful use or occupation of public lands released for fishpond purposes.

a)   Any person illegally occupying or introducing improvements
in areas released for fishpond development without a lease, prior to the
effectivity of this Order, shall be penalized through forfeiture of all
the improvements introduced thereon in favor of the government and
shall vacate the area immediately. Provided, however, that if the person
occupying the said area is an applicant, he shall be charged double the
ordinary rental charges.

b)   Upon failure or refusal to pay the charges herein
mentioned, the said applicant shall be liable for prosecution and upon
conviction shall suffer the penalty which is a fine from Five Thousand
(P5,000.00) pesos or imprisonment from six (6) months to four (4) years
or both such fine and imprisonment in the discretion of the Court.

SECTION 26.    Administrative and Court Action .

a) The Secretary, the Director or their duly authorized
representative may take action either administrative or judicial, as may
be necessary and proper to carry into effect the provisions of this
Order.

b) Adverse Claim or Protest. — Any person who has an adverse
claim or protest over the area which is the subject of applications for a
twenty-five (25) year fishpond lease agreement shall file his claim or
protest with the Bureau within thirty (30) days from knowledge thereof,
otherwise such claim or protest shall not be entertained.

SECTION 27.    Repealing Clause. — Fisheries
Administrative Order No. 60, as amended, Fisheries Administrative Order
No. 125 and existing fishery rules and regulations which are
inconsistent with the provisions of this Order are hereby repealed or
modified accordingly.

SECTION 28.    Effectivity . — This
Administrative Order shall take effect fifteen (15) days after its
publication in the Official Gazette and/or in two (2) newspapers of
general circulation.

Adopted: 23 Feb. 2000

(SGD.) EDGARDO J. ANGARA Secretary
Recommended by:
(SGD.) MALCOLM I. SARMIENTO, JR.  Director, Bureau of Fisheries and Aquatic Resources	(SGD.) CESAR M. DRILON, JR. Undersecretary for Fisheries and Legislative Relations