GUIDELINES ON THE OPERATIONALIZATION OF THE AREA WATER QUALITY MANAGEMENT FUND (AWQMF) UNDER REPUBLIC ACT NO. 9275

Pursuant to Section 10 of Republic Act No. 9275, otherwise known as the
Philippine Clean Water Act of 2004, DENR Administrative Order No.
2005-10 or the Implementing Rules and Regulations of RA 9275 and
Executive Order No. 192 entitled “Reorganization Act of the Department
of Environment and Natural Resources”, the following guidelines on the
operationalization of the Area Water Quality Management Fund (AWQMF) is
hereby issued.

Section. 1. Basic Policy. It is the policy of the State
to pursue economic growth in a manner consistent with the protection,
preservation and revival of the country’s fresh, brackish and marine
waters, through the following:

1. Streamlining of the processes and procedures in the prevention, control and abatement of pollution;
2. Formulation of an integrated water quality management framework
   through proper delegation and effective coordination of functions and
   activities;
3. Formulation and enforcement of a system of accountability for
   short and long-term adverse environmental impact of a project, program
   or activity;
4. Designation of Water Quality Management Areas (WQMAs) for
   effective integrated management of physiographic units such as
   watersheds, river basins, or water resource regions; and
5. Establishment of AWQMF to be used in accordance with Section 10
   therein and its utilization for the most cost-effective strategies to
   achieve such objective.

Sec. 2. Objective. This Order shall set forth the procedures to be followed in the operationalization of the AWQMF designated for each WQMA.

Sec. 3. Scope and Coverage. This Order shall
cover all the AWQMF to be designated in all WQMA to support the
maintenance, management and protection of water bodies within the WQMA.

Sec. 4. Definition of Terms. As used in and for purposes of this Order, the following terms shall mean:

1. Accrual – the act of coming into the possession of the fees and charges as an addition or increment.
2. AWFP – targeted activities and programs with corresponding funds for the whole year.
3. Eligible Entities – any of the following entities qualified to undertake projects under Section 7 (c) to (f) of this Order:
   1. Duly registered People’s Organizations (POs);
   2. Non-Government Organizations (NGOs);
   3. Private sector; or
   4. National government agency (NGA) or instrumentality of the
      State with a mandate of protecting the environment and prevention of
      water pollution, including but not limited to Local Government Units
      (LGUs), Protected Area Management Boards (PAWBs) of proclaimed and/or
      legislated Protected Areas (PAs), officially established fishery
      management councils, river protection councils and other formal bodies
      established under the law with clear management authority and public
      accountability.
4. Fund Code – the specific account code assigned to the Special Account for the AWQMF.
5. Goods – all items, supplies, materials and general support
   services, except consulting services and infrastructure projects, which
   may be needed in the pursuit of any of the undertaking under Section 7
   of this Order, project or activity, whether in the nature of equipment,
   furniture, stationery, materials for construction, or personal property
   of any kind, including non-personal or contractual services such as the
   repair and maintenance of equipment and furniture, as well as trucking,
   hauling, and related or analogous services, as well as procurement of
   materials and supplies provided by the WQMA for such services. The term
   “related” or “analogous services” shall include, but will not be limited
   to lease or purchase of office space, media advertisements, health
   maintenance services, and other services essential to the operation of
   the WQMA.
6. Infrastructure Projects – projects undertaken by the WQMA GB in
   pursuit of activities under Section 7 of this Order which shall include,
   but will not be limited to the construction, improvement,
   rehabilitation, demolition, repair, restoration, or maintenance of
   projects, irrigation, flood control and drainage, water supply,
   sanitation, wastewater treatment systems, shore protection, energy/power
   and electrification facilities, and other related construction projects
   of the WQMA.
7. Rural Areas – areas outside of component and highly urbanized cities defined under the Local Government Code.
8. Sub-Fund Code – the account code designated and assigned by
   DENR Environmental Management Bureau Central Office (EMB-CO) to each
   AWQMF.
9. Wastewater Charge (WWC) – the fee based on the net waste load
   and calculated based on the wastewater charge formula as required under
   Section 13 of RA No. 9275.

Sec. 5. Operational Establishment of the AWQMFs. The AWQMF is hereby made operational as illustrated by the following:

1. The Department of Budget and Management (DBM) shall designate a
   Fund Code for the Special Account established in the Bureau of the
   Treasury, which shall be administered by EMB-CO. Once the Fund Code is
   designated, EMB-CO shall attribute a Sub-Fund Code for each WQMA
2. The sub-Fund Code shall be provided to the corresponding
   DENR-EMB Regional Office’s (EMB-RO) WQMA for the remittance of the
   collections for the AWQMF.

Sec. 6. Administration, Management, and Operation of the AWQMF. The following procedures shall be observed:

1. The AWQMF to be designated in each WQMA shall be administered
   by each WQMA Governing Board for the maintenance and upkeep of the water
   bodies. The WQMA Governing Board shall designate and create, from among
   its members, a Fund Committee headed by the designated Chair of the
   WQMA GB.
2. The Fund Committee shall comprise five (5) members of the WQMA
   Governing Board, including the Chair, and shall include one
   representative each from the LGUs, NGOs, other NGAs, and industries
   within the jurisdiction of the WQMA.
3. The Fund Committee shall establish an Administrative and
   Finance Group (AFG), which shall be responsible for the day to day
   management of the AWQMF subject to requirements under RA No. 9275 and
   this Order. The use of and disbursement from the AWQMF shall be based on
   the respective WQMA’s Annual Work and Financial Plan (AWFP) prepared
   pursuant hereto. This AFG shall be responsible for executing the
   following functions:
   1. Planning and Budgeting;
   2. Accounting and Financial Reporting;
   3. Fund Management;
   4. Fund Raising Support; and
   5. Administrative Services.
4. This AFG shall work closely with EMB-RO Administrative and Finance Division (AFD) counterparts.

Sec. 7. Sources of and Accrual to the AWQMF. The following shall be the sources of funding the AWQMF:

1. Fines incurred by establishments located in rural areas before the effectivity of RA No. 9275;
2. Fees collected under the Wastewater Charge System established under Section 13 of RA No. 9275;
3. Donations, endowments, and grants for the WQMA for the water quality management of the area; and
4. Collections from loans granted to eligible entities.

Sec. 8. Collection of Fees under the Wastewater Charge (WWC) System and Other Dues for the AWQMF.

1. Cashiers of EMB are hereby appointed as Special Collection
   Officers (SCO), responsible for the collection of WWCs and other
   receipts creditable to the specific AWQMF. In the absence of regular
   cashiers in the EMB-ROs, the officially designated EMB cashier shall
   assume the function of an SCO and shall, for this purpose, be
   accountable to the WQMA GB.
2. The SCO shall collect the WWCs and other dues from sources named
   herein. He shall then issue official receipts as acknowledgement of
   collections. Receipts shall indicate to which AWQMF the collection shall
   accrue.
3. All collections, income, including grants and donations
   received for the concerned AWQMF, shall be deposited with an Accredited
   Government Depository Bank (AGDB) for the Special Account in the
   National Treasury. All dues collected for the AWQMF each day shall be
   deposited intact on the same day or not later than the next banking day.
   The Accounting and Financial Reporting Unit shall cause the entry of
   all deposits into the AWQMF’s books of account and ensure prompt
   reporting of collections and other receipts to the Chairman of the WQMA
   GB, who in turn shall furnish reports to the WQMA GB, DBM, and Congress.

Sec. 9. Fines and Collections Prior to the Designation of WQMAs.

1. Prior to the designation of WQMAs, DENR-EMB, as the implementor
   of the Wastewater Charge System, shall authorize each EMB-RO to collect
   the WWCs and other amounts including among others, fines imposed by the
   PAB to establishments located in rural areas before the effectivity of
   RA No. 9275, for the future WQMA’s AWQMF.
2. EMB-ROs shall make sure that collected WWCs and other receipts
   are identified in terms of the companies paying them and their locations
   to facilitate the accrual to the appropriate AWQMF once the
   corresponding WQMAs are designated covering such locations.
3. Once a WQMA is designated and its GB is convened, the EMB-RO
   shall cause the transfer of funds to the WQMA’s AWQMF based on the
   location of the pollution source for which the WWCs were collected.

Sec. 10. Uses of the AWQMF. The following expenditures and activities shall be eligible for funding under the AWQMF:

1. Rewards and incentives for entities whose effluent discharges
   are better than the water quality criteria of the target classification
   of the receiving body of water;
2. Loans for acquisition and repair of facilities to reduce quantity and improve quality of wastewater discharge;
3. Regular maintenance of the water bodies within the management
   area, consistent with the compliance plans of the LGUs as required by
   Section 20 of RA No. 9275;
4. In connection with (c), purchase of equipment related to water quality monitoring, reporting, or management;
5. In connection with (a) and (c), costs for special campaigns or public awareness raising;
6. In connection with (c), costs for special events related to water quality monitoring, enforcement, or reporting; and
7. Operational expenses of the WQMA GB, the multi-sectoral water
   quality surveillance and monitoring network, and the Technical
   Secretariat, the amount of which shall not be more than 10 percent of
   each AWQMF balance as of the end of the previous calendar year,
   consistent with Section 10 par. 2 of RA No. 9275.

In addition, a percentage of the annual collection shall be set
aside by the WQMA GB, at its discretion, to be used for giving grants
and loans for eligible projects and eligible beneficiaries.

The
WQMA GB shall set aside 15 percent of its annual AWQMF disbursements to
support EMB-RO activities falling under this Section’s (a) to (f) items,
above not otherwise funded by the general appropriations.

Sec. 11. AWQMF Planning.

1. Consistent with the 10-year Water Quality Management Area
   Action Plan (WQMAAP) Prepared pursuant to RA No. 9275, the Fund
   Committee shall prepare an AWFP for submission to the WQMA GB.
2. Entities entitled to receive funding from the AWQMF for eligible
   projects under Section 10 of this Order shall be qualified to receive
   project funding. They shall submit their requests to the concerned WQMA
   Fund Committee, who shall then endorse the request to the WQMA GB with
   its notation on the consistency of such request with the priorities for
   the area.
3. The WQMA GB shall review and approve the requests and shall
   cause the incorporation of such requests into the AWFP for submission to
   the EMB Director. The EMB Director shall approve the AWFP based on the
   Integrated Water Quality Management Framework (IWQMF) and the 10-year
   WQMAAP.
4. Once approved, the AWFP shall be the basis of the Special Budget
   Requests (SBRs) submitted to DBM through the EMB Director. Releases for
   the AWQMF shall be made by DBM to the WQMA GB through the EMB-RO.
5. Operational costs of the WQMA GB shall be included in their AWFP
   and may be sourced from the AWQMF, subject to applicable government
   rules and regulations.

Sec. 12. AWQMF Availment and Release. On the basis of the
approved AWFP, the Fund Committee shall prepare the SBR and submit the
same to the EMB-CO, together with the following requirements:

1. AWFP approved by the WQMA GB with detailed breakdown of expenditures;
2. Cash Program;
3. Accomplishment report of previous SBR, if applicable;
4. Updated trial balance of the respective AWQMF;
5. Other relevant documents that refer to the specific activities
   prioritized under the 10-year WQMAAP including, but not limited to,
   relevant management plans, relevant Board Resolutions, and the like; and
6. Certification from the local Bureau of the Treasury of the
   availability of requested fund in the Special Account for the respective
   AWQMF.

Sec. 13. Criteria for Grants and Rewards. EMB shall
formulate a set of procedures and criteria for grants and rewards, and a
separate set of criteria for loans. The WQMA GB may require counterpart
contributions or set a maximum percentage of a project’s cost as a
condition for financial support from the AWQMF.

Sec. 14. Procurement Process. Procurement by WQMA of
infrastructure projects, goods and consulting services shall be governed
by RA 9184 and Part A of its Implementing Rules and Regulations (IRR),
as customized for the use of DENR and all offices under it by the DENR
Customized Procurement Manual under DENR AO 2007-08.

Foreign-funded procurement activities shall be governed by RA 9184 as implemented by Part B of its IRR.

Sec. 15. Responsibilities of the WQMA GB, EMB, and DBM.

WQMA GB shall:

1. Recommend approval of the AWFP to EMB-CO;
2. Supervise and monitor the performance of the Fund Committee;
3. Adopt prioritization criteria for the use of the funds,
   including evaluation of the requests, allocation of portions to specific
   uses and realignment when necessary;
4. Administer the AWQMF;
5. Set up an account with a government bank for its share of the
   AWQMF, with signatories authorized by the Governing Rules of the
   Governing Board;
6. Set up and maintain a AWQMF books of account; and
7. Submit to EMB-CO annual physical and financial
   performance/progress reports and how the activities contributed to the
   improvement of WQMA.

EMB-CO shall:

1. Attribute a Sub-Fund Code for each WQMA.

EMB-RO shall:

1. Collect WWCs and other receipts accruing to the AWQMF;
2. Inform the WQMA Governing Board the accrued collections of the
   AWQMF, including the estimated amount that will be transferred
   eventually to the WQMA Sub- Fund.

DBM shall:

1. Designate a Fund Code; and
2. Issue appropriate Special Allotment Release Orders (SARO) and
   the corresponding Notice of Cash Allocation NCA) in accordance with
   existing budgeting rules and regulations

Sec. 16. Fund and Performance Auditing. All transactions under the AWQMF shall be subject to the usual government auditing rules and regulations.

The elected auditor of the WQMA Governing Board shall conduct
an annual audit of the AWQMF and submit the findings to the Fund
Committee and the Governing Board within thirty (30) days after each
fiscal year.

Sec. 17. Accountability. Members of the WQMA GB are
accountable to the Governing Board and to their respective offices in
the performance of their functions in relation to the use of the AWQMF.

Sec. 18. Reportorial Requirements. The WQMA GB
shall prepare an annual financial and accomplishment report on the use
of the AWQMF along with other regular reports required by law. The
annual financial and accomplishment report shall indicate, among others,
the types of projects and activities supported and how these
projects/activities contributed to improving water quality in the WQMA.
Copies of the reports shall be transmitted through a board resolution to
the EMB Director and the DENR Secretary.

Sec. 19. Separability. If any provision of this Order is
declared unconstitutional or invalid, the same shall not affect the
validity and effectivity of the other provisions hereof.

Sec. 20. Repealing Clause. Rule 10 of DENR
Administrative Order 2005-10 is hereby repealed. All orders and
circulars inconsistent with this Department Administrative Order are
likewise deemed repealed or modified accordingly.

Sec. 21. Effectivity. This Order shall take effect
fifteen (15) days after its publication in a newspaper of general
circulation and upon acknowledgment of receipt of a copy hereof by the
Office of the National Administrative Register (ONAR).

(SGD.) RAMON J.P. PAJE

Secretary