PROVIDING FOR THE REORGANIZATION OF PORT ADMINISTRATION AND OPERATION FUNCTIONS IN THE COUNTRY, CREATING THE PHILIPPINE PORT AUTHORITY, PAVING THE WAY FOR THE ESTABLISHMENT OF I…

WHEREAS, a port is not only a vital link in the total
transportation and trade system, but a major factor in harnessing the
human and natural resources of a region in the total context of National
Development;

WHEREAS, harbors and the tributary areas have their own
peculiar potentialities to be considered in port development;

WHEREAS, the concept of port administration has in this
country been focused on the traditional functions of revenue collection,
harbor maintenance and cargo handling, to the exclusion of the port’s
fuller utilization and development as a spur for regional growth;

WHEREAS, it is perceived that the broader role of ports
goes beyond the function of serving as the hub of maritime trade but
extends to the wider area of acting as a catalyst that may hasten the
expansion of the economic development of an area;

WHEREAS, there is need to integrate and coordinate port
development at the national level and at the same time promote the
growth of autonomous regional port development bodies responsive to the
needs of their individual localities;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers in me vested by the Constitution,
in order to effect the desired changes and reforms in the social
economic and political structure of our society, do hereby decree and
order that the following be adopted and made part of the laws of the
land;

SECTION 1. Title. — This Decree shall be known as the
Philippine Port Authority Decree of 1974.

SEC. 2. Declaration of Policies and Objectives. — It
is hereby declared to be the policy of the State to implement an
integrated program of port development for the entire country in
accordance with the following objectives: (a) to streamline and optimize
the planning, development, construction; maintenance and operation of
ports, port physical plants and facilities, (b) to ensure the smooth
flow of waterborne commerce passing through the country’s ports in the
conduct of international and domestic trade, (c) to promote regional
development through the dispersal of industries and commercial activity
throughout the different regions, (d) to foster free enterprise and
sustain the growth of export and other priority industries and, (e) to
redirect port administration beyond its specific and traditional duties
in harbor, cargo and revenue operations to the broader function of total
port district development, including the full and fruitful utilization
of the port’s hinterland and tributary areas.

In order to attain these objectives, the Government through the
Philippine Port Authority hereinafter created shall:

1. Draw up and implement an integrated Philippine Port Development
   Program which shall embody the following: the review and reorganization
   of the present set-up of port administration, operations, physical
   plants and facilities; the classification of the different ports in the
   country according to size, importance, potential for growth and the
   nature and structure of surrounding areas; determination of the type and
   pattern of the local Port Industrial Zone Authorities to be established
   in the different ports; and the definition of the broad operational
   guidelines to be followed by these individual Authorities;
2. Encourage and stimulate the establishment of individual
   autonomous Port Industrial Zone Authorities in the different port
   districts through: (i) the provision and/ or assistance in the
   provision of financial support from public and private financing
   sources, (ii) technical assistance, (iii) the granting of incentives
   particularly during the early years of operation; and (iv) in general,
   the maintenance of close cooperation and a smooth working relationship
   with the individual Port/Industrial Zone Authorities;
3. Provide for the effective supervision, regulation and control
   of the organizational management, ownership and structure of individual
   Port/Industrial Zone Authorities in the given port districts; and (d)
   Exercise broad supervisory and regulatory powers over the actual
   operations of individual Port/Industrial Zone Authorities in keeping
   with their autonomous character.

A. THE PHILIPPINE PORT AUTHORITY

SEC. 3. The Philippine Port Authority Creation and
Organization. — There is hereby created a Philippine Port Authority,
hereinafter referred to as the “Authority”. The corporate powers of the
Authority shall be vested in a governing board of directors to be known
as the Philippine Port Authority Council, hereinafter referred to as
the “Council.”

The Authority shall have general jurisdiction and
control over all persons, corporations, firms or entities, existing,
proposed or otherwise to be established within the different port
districts in the Philippines and shall supervise, regulate and exercise
its powers in accordance with the provisions of this Decree.

The
principal office of the Authority shall be in the Greater Manila area
but it may establish branches and agencies within the Philippines as may
be deemed necessary by the Council.

SEC. 4. Philippine Port Development
Program. — The Authority, in coordination with other national
agencies of the Government, shall prepare and annually update a Ten-Year
Philippine Port Development Program, hereinafter referred to as the
“Program” which shall embody the integrated plan for the development of
the country’s ports and harbors. The Program shall be submitted for
approval by the President of the Philippines.

Upon approval of
the Program by the President, all government departments, bureaus,
agencies and instrumentalities shall implement the same within their
respective jurisdictions. The Authority shall ensure that the approved
Program is being effectively implemented by the participating agencies.
No government body or instrumentality shall adopt any policy or take any
course of action contrary to or inconsistent with the Program.

B. PHILIPPINE PORT AUTHORITY COUNCIL

SEC. 5. Powers and Functions of the Council. —
The Philippine Port Authority Council shall have the following powers,
functions and duties, among others:

1. To provide comprehensive policy guidance for the effective
   supervision and regulation of individual Port/Industrial Zone
   Authorities to be established in the different port districts;
2. To formulate a comprehensive and practicable Ten-Year
   Philippine Port Development Program and renew and update the same
   annually in coordination with other1 national agencies of the
   Government;
3. To promulgate and prescribe a set of rules and regulations,
   standards, guidelines and procedures governing the establishment of
   individual Port/Industrial Zone Authorities;
4. To issue specific standards to be met by individual local
   Port/Industrial Zone Authorities in the conduct of port operations,
   particularly on harbor conservation, maintenance and navigation and in
   the collection of port fees and charges; accordingly, these functions
   shall be exercised with the Bureau of Public Works and the Bureau of
   Customs and a practicable arrangement for the coordination of said
   functions shall be worked out with the appropriate agencies;
5. To recommend to the President whenever the national interest
   demands it, that the State, through an agency the Authority may
   designate, take over the administration and operation of a specific port
   district or portion thereof;
6. To approve specific applications of any person, firm or entity
   to operate, administer and establish an individual Port Industrial Zone
   Authority in a particular area;
7. To exercise the right of eminent domain by expropriating the
   surrounding and tributary areas of a harbor or harbors which, in the
   opinion of the Authority, are vital to the total port district
   development;
8. To approve the organizational structure, staffing pattern, and
   budget of the Authority upon the recommendation of the General Manager;
9. To appoint, discipline and remove, and determine the
   composition of the technical staff of the Authority and other personnel:
   Provided, That all positions in the Authority which are
   confidential or highly technical in nature shall not be subject to the
   Civil Service Law and Rules: Provided, further. That appointments
   of personnel in the management below the rank of section chief shall be
   made by the General Manager, in accordance with the approved budget and
   staffing pattern and shall be noted by the Council: Provided,
   furthermore, That the Council or General Manager may engage on
   contractual basis or other arrangements for the temporary services, and
   fix the compensation of highly qualified professionals, experts,
   technical advisers or consulting firms;
10. To adopt, alter and use a corporate seal which shall be
    juridically noticed; approve and make contracts, determine the exact
    location of its office and prescribe the rules and regulations to govern
    its proceedings;
11. To recommend to the President, through the National Economic
    and Development Authority, the grant of necessary incentives to
    individual Port/Industrial Zone Authorities
12. After 3 July 1974, to exercise over-all supervision over the
    port facilities of the large foreign petroleum companies in matters
    pertaining to safety, pollution and conservation in the harbors;
13. To exercise regulatory and supervisory powers over the marine
    aspect of the administration and operation of port zones such as the
    Bataan Export Processing Zone, the proposed Jolo free port, Zamboanga,
    Parang in South Cotabato, and others;
14. To plan and coordinate the establishment of Port/Industrial
    Zone Authorities in specific areas producing the country’s main export
    products, such as bananas, logs, sugar, coconut products and mineral
    ores; and
15. To perform such acts as may be deemed proper and necessary to
    carry out and implement the provisions of this Decree.

SEC. 6. Composition and Organization. — The Council
shall be composed of eleven members as follows: The Secretary of
Finance, the Secretary of Trade, the Secretary of Industry, the
Executive Secretary, the Secretary of Public Works, Transportation and
Communications, the Secretary of Public Highways, the Director General
of the NEDA, the, Secretary of National Defense, the General Manager of
the Philippine Port Authority and a representative from the private
sector to be designated by the President. The Chairman of the Council
shall be appointed by the President of the Philippines from among its
members.

The officials next in rank to the regular members shall
serve as permanent alternate members, except that, in the absence of the
Chairman, the Council shall elect a temporary presiding officer. The
alternate members shall attend meetings of the Council and Committees
assigned to their principals and receive the corresponding per diems
whenever their principal is absent or the said position is vacant.

The Council shall meet regularly once a month and at its discretion,
hold special meetings to consider urgent matters upon call of the
Chairman or any three members thereof. A majority shall constitute a
quorum for the transaction of business.

Each member of the
Council shall receive a monthly commutable allowance of five hundred
pesos and per diem of one hundred for every meeting of the Council or
Committee thereof actually attended: Provided, That the total
allowable amount of per diems each month shall not exceed five hundred
pesos.

C. MANAGEMENT

SEC. 7.
Management Head. — The management of the Authority shall be vested
in the General Manager who shall be directly assisted by two Assistant
General Managers, one for Planning and the other for Operations.

SEC. 8. Appointment, Tenure, Qualifications and
Compensation. — The General Manager and the two Assistant General
Managers shall be appointed by the President for a term of six years: Provided,
That upon the expiration of their respective terms, they shall continue
to serve until their successor shall have been appointed and qualified:
Provided, further, That no vacancy shall be filled except for
the unexpired portion of the term: Provided, finally, That the
President may remove the General Manager and the Assistant General
Manager from office for cause upon recommendation of the Council.

The General Manager and the Assistant General Managers shall
be citizens of the Philippines, at least thirty-five years old on the
date of their appointment, of good moral character, of recognized
executive ability, and competence in previous public or private
employment, with adequate training and experience in economics, finance,
law, management, technology, public utility or preferably in the phases
and aspects of port administration. Until otherwise fixed by the
Council, their annual salaries and allowances shall be as follows:

	General Manager
	Annual Salary	P50.000.00
	Monthly Commutable Allowance	2,000.00
	Assistant General Manager
	Annual Salary	P40,000.00
	Monthly Commutable Allowance	1,500,00

The General Manager shall be directly responsible to the Council
and shall have powers, functions and duties as provided in this Decree.
The Assistant General Managers shall be directly responsible to the
General Manager, and their respective powers, functions and duties shall
be determined by the Council, upon recommendation of the General
Manager.

SEC. 9. General Powers and Functions of the General
Manager. — Subject to the general supervision and control of the
Council, the General Manager shall have the following general powers,
functions and duties:

1. To implement, enforce and apply the policies, programs,
   standards, guidelines, procedures, decisions and rules and regulations
   issued, prescribed or adopted by the Council pursuant to this Decree;
2. To undertake researches, studies, investigations and other
   activities and projects, on his own initiative or upon instructions of
   the Council, and to submit comprehensive reports and appropriate
   recommendations to the Council for its information and action;
3. To manage the day to day affairs of the Authority subject to
   the provisions of this Decree and applicable laws, orders, rules and
   regulations of other appropriate government entities;
4. To assist approved and prospective Port/Industrial Authorities
   in having their papers processed with dispatch by all Government
   offices, agencies, instrumentalities and financial and banking
   institutions;
5. To prepare the agenda for the meeting of the Council, the
   Authority’s annual budget and such other measures and recommendations
   which may require the approval of the Council;
6. To establish the internal organization of the Authority under
   such conditions that the Council may prescribe: Provided, That
   any major reorganizational changes shall be subject to the approval of
   the Council; and
7. To perform such other duties as the Council may assign and
   such acts as may be necessary and proper to implement this Decree.

D. INDIVIDUAL, AUTONOMOUS PORT/INDUSTRIAL ZONE
AUTHORITIES

SEC. 10. Broad Policy Considerations. — The
establishment of individual, autonomous Port Authorities and/or
Industrial Zones in the different port districts shall be governed by
the following broad policy considerations:

1. Individual Port/Industrial Zone Authorities, once established,
   shall exercise full autonomy and flexibility in their operations similar
   to that of any other business enterprises;
2. Due attention should be given to the improvement and optimal
   utilization of the port’s surrounding areas eventually providing for the
   gradual and progressive expansion and economic development of the
   entire port district;
3. The individual Port/Industrial Zone Authority may, in
   subsequent periods, depending on the success and viability of its
   operations, expand its scope and functions to include the management of
   utilities, housing, commercial enterprises, goods and services and other
   facilities within its territorial jurisdiction. The Authority shall
   assist individual Port/Industrial Zone Authorities in the attainment of
   their expansion goals;
4. In such matters where the national interest so requires, the
   Government may, through the Philippine Port Authority, intervene in the
   operations of individual Port/ Industrial Zone Authorities;
5. The ownership of corporations, firms or entities operating and
   administering a given port shall be controlled by citizens of the
   Philippines, in accordance with the citizenship provisions of existing
   laws on corporate ownership and partnerships;
6. Since the establishment and operation of Port/Industrial Zone
   Authorities shall require a sizeable amount of capitalization, the entry
   of foreign investment shall be given favorable consideration; and
7. The granting of incentives shall be opened to persons, firms or
   entities who may establish a Port/Industrial Zone Authority in a given
   port district.

E. REORGANIZATIONAL CHANGES

SEC. 11. Reorganizational Changes. — In view of
the re-organizational changes rendered necessary and imperative by this
Decree, there is hereby created an inter-agency Committee to study and
recommend measures on reorganization and turnover of responsibilities
relative to the effective implementation of this Decree.

The
composition of the Committee shall be as follows:

The General Manager-Designate Philippine Port Authority —
Chairman

Representative of the Executive Office
— Vice-Chairman
The Commissioner of Customs — Member
The Director of Public Works — Member
The Commandant of the Coast Guard
— Member

Representative of the National Economic and Development Authority
— Member
Representative of the Department of Trade
— Member
Representative of the Department of Industry — Member

Representative of the Conference of Inter island Shipowners and
Operators — Member

The Committee shall submit to the Council its recommended
reorganizational changes not later than sixty days after the
promulgation of this Decree. Upon the approval by the Council, the
reorganizational changes shall form an integral part of this Decree.
More specifically, the recommended reorganizational changes shall
include but not limited to the following:

1. Delineation of the powers and duties of the Authority, Bureau
   of Customs, Bureau of Public Works, and other governmental agencies
   directly involved in the administration, operations, constructions, and
   maintenance of public ports;
2. List of offices and positions in the Bureau of Customs and
   Bureau of Public Works to be transferred to the Authority;
3. Procedures and time frame for the gradual turnover of above
   powers, duties, offices, and positions from the Bureaus affected by
   the reorganization to the Authority, including movable and immovable
   properties, accounts and records necessary, useful or incidental to the
   discharge of said powers and duties of the Authority or port bodies
   falling under its jurisdiction; and
4. Relationship of the Authority to other governmental agencies
   and private firms involved or having interests in the activities of
   ports.

The Committee’s operational expenses shall be funded from the Pork
Works Special Fund.

F. MISCELLANEOUS PROVISIONS

SEC. 12. Appropriations. — To carry out the
provisions of this Decree, there is hereby appropriated the sum of two
million pesos out of the funds in the National Treasury not otherwise
appropriated. Thereafter, the succeeding appropriations of the Authority
shall be included in the Annual Appropriations Act.

In addition
to the above, the Authority is hereby authorized to retain fifty per
cent of its collections from fees, charges and fines to defray any
deficiency in annual appropriations and to finance its other projects.

SEC. 13. Power to Issue Bonds and Incur Indebtedness. —
The Authority may contract loans, credits and other indebtedness or
issue bonds, notes debentures, securities and other borrowing
instruments, if necessary, to carry out its Programs. The Council shall
promulgate a resolution stating the purpose of the loan and citing the
project study supporting the proposed borrowing. To be valid, the
resolution must carry the affirmative vote of at least five members of
the Council and be approved by the President of the Philippines, upon
the recommendation of the Secretary of Finance, after consultation with
the National Economic and Development Authority and the Monetary Board
of the Central Bank.

The total principal domestic indebtedness of
the Authority payable in Philippine currency shall not at any one time
exceed three hundred million pesos, while the total principal
indebtedness of the Authority payable in foreign currency shall not at
any one time exceed one hundred million United States dollars or the
equivalent thereof in foreign currencies.

SEC. 14.
Repealing and Separability Clauses. — All laws, decrees, orders,
rules and regulations, policies, programs or parts thereof, which are
inconsistent with any of the provisions of this Decree, are hereby
repealed or modified accordingly.

If for any reason any section
or provision of this Decree is declared to be unconstitutional or
invalid, the other sections or provisions hereof, which are not affected
thereby, shall continue in full force and effect.

SEC. 15.
Effectivity. — This Decree shall take effect upon its
promulgation: Provided, That these portions hereof which may
require a transition period to assure the orderly transfer of powers and
functions shall take effect as stated in the implementing details: Provided,
further, That such implementing details shall be prepared by the
Council, in consultation with the government agency heads concerned, and
submitted to the President for approval within four months after
issuance of this Decree.

Done in the City of Manila, this 11th day of July, in the year
of Our Lord, nineteen hundred and seventy-four.