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(NAR) VOL. 9 NO. 3 / JULY - SEPTEMBER 1998
[ CPA ADMINISTRATIVE ORDER NO. 03-98, June 19, 1998 ]
POLICY GUIDELINES AND GENERAL CONDITIONS FOR THE MANAGEMENT AND OPERATION OF CARGO-HANDLING SERVICES
Pursuant to Section 5 (a, b, c), Section 7 (b, e, j), Section 9 (a, c, g, k), and Section 21 of R.A. 7621 (Charter of the Cebu Port Authority), and in order to enhance the efficiency of cargo-handling services in all government ports within the jurisdiction of the Authority, in the interest of public service and benefit, this Administrative Order is hereby promulgated:
Article I
Declaration of Policy
SECTION 1.01 Grant of Cargo-Handling Permit/Contract, Financial and Performance Audit — As a general rule, permits/contracts for the management and operation of cargo-handling services in all government ports within the jurisdiction of the Authority shall be awarded through a system of public bidding and only to duly organized Filipino domestic corporations. However, cargo-handling operators with existing permits/contracts, whether on hold-over or otherwise, shall be subjected to a performance and financial audit. And if found satisfactory and they do not have any outstanding obligations to the Authority, to labor, or to port users, their permits/contracts shall be renewed under such terms and conditions as the Authority may deem proper to impose, otherwise the permit/contract shall be cancelled, revoked, or withdrawn, and the same shall be subjected to public bidding.
Public bidding may be dispensed with for cargo handling services in ports with low cargo volumes and/or where the cargo handling operations are primarily manual. Provided, That, the Authority may classify or categorize cargo handling service providers in such ports in accordance with minimum standards prescribed by the Authority and grant accreditation under such terms and conditions as it may deem proper to impose.
The nature of cargo-handling services that is expected of the CHSP shall be taken into consideration in determining the term of the Contract/Permit/Accreditation.
SECTION 1.02 Strengthen Protection and Improve Welfare of Labor — The protection of labor in the cargo-handling industry shall be strengthened by strict compliance with labor standard laws and by imposing penalties on operators found engaged in such illegal activities, among others, the practice of the “Cabo” and/or “Kabit” system (subcontracting).
SECTION 1.03 Social Amelioration Fund — A cargo-handling operator shall comply with the Social Amelioration Fund program for its port- workers in accordance with the guidelines issued by the Authority to cover separation and other benefits over and above the retirement pay of workers.
SECTION 1.04 Maintenance of Wholesome Port — A cargo handling operator shall cooperate with and assist the Authority in the removal and prevention of port squatters. It shall adopt measures to ensure that its prospective employees are not squatting within the port premises.
Article II
Preliminary Provisions
SECTION 2.01 Definition of Terms — For purposes of this Order, the following terms, unless the context indicates otherwise, shall mean or be understood to mean, as follows:
a. Authority means the Cebu Port Authority;
b. Cabo refers to a person or group of persons or to a labor group which, in the guise of a labor organization, supplies workers to a licensed cargo handling service provider, with or without any monetary or other consideration whether in the capacity of an agent of the CHSP or as an ostensible independent contractor;
b. Cargo Handling Service Provider (CHSP) refers to any person or entity awarded the management and operations of cargo-handling services in a port by way of Contract/Permit/ Accreditation;
c. Kabit System refers to the arrangement between a CHSP and a person or group of persons or a labor group whereby the latter performs cargo handling services without its own contract/permit/accreditation but uses or subcontracts the contract/permit/accreditation of a legitimate operator without the permission or consent of the Authority.
c. Services refers to cargo handling services such as quayside/dockside services and shipside services.
Article III
Equipment and Facilities
SECTION 3.01 Cargo Handling Equipment — The CHSP shall have available at the commencement of the operation such equipment required by the Authority all in serviceable and ready-line condition. Provided, That within (3) months from the time the CHSP receives an order from the Authority, it shall have available for the operation of the services covered by its Contract/Permit/Accreditation such cargo handling machineries, gears, tools, equipment and materials as may be necessary to efficiently handle and sustain an uninterrupted cargo handling operations for all incoming and outgoing cargoes of all types and classes, including such reserve and standby machineries, equipment and materials to take care of fluctuations of port traffic, as well as breakdown of equipment as shall be determined and enumerated by the Authority.
SECTION 3.02 Equipment Renewal and Modernization — When so required by the Authority, the CHSP shall submit for approval a program for equipment renewal and modernization, consistent with its Contract/Permit/Accreditation with consideration on utilization, specialized gears for special types of cargo and other progressive material handling trends, concepts, and techniques; the CHSP shall acquire new equipment to replace such equipment which the Authority shall, upon careful inspection, consider unsafe, inefficient or uneconomical to operate by reason of age, wear, disrepair and other causes, Provided, That the CHSP shall procure additional modern equipment to meet the exigencies of the services brought by the increase in volume and type of cargo as the circumstances may demand.
SECTION 3.03 Fire-Fighting Component — The CHSP shall make available for its regular working force on a 24-hour basis fire-fighting equipment as prescribed in “Dockwork Safety and Health Standards” within sixty (60) days from the date of effectivity of its Contract/Permit/Accreditation.
SECTION 3.04 Improve Working Conditions — The CHSP shall undertake to improve the working conditions of its employees and workers by adopting the following measures:
a. Conduct in-service training program for all categories of personnel from management down the line to ordinary dock worker; for which purpose the CHSP shall provide the necessary funds, facilities and equipment for the proper implementation of this program;
b. Maintain and keep at its own expense toilet facilities in the wharf including wash basins and bathroom in areas designated by the Authority;
c. Provide its employees and workers recreation and social facilities in cooperation with existing labor union(s).
SECTION 3.05 Notice of Termination or Renewal of Contract/Permit or Accreditation — Ninety (90) days before the expiration of the Contract/Permit/Accreditation, the Authority shall decide and make known whether the services shall be taken over by the Authority itself, or be subject to bidding, or that the Contract/Permit/Accreditation shall be allowed to continue under terms and conditions imposed by the Authority. In the event that the Authority decides not to extend the Contract/Permit/Accreditation, the necessary arrangements between the Authority and the CHSP to assess and inventory all properties and equipment and perform such other related work shall be made within the said period.
SECTION 3.06 Option to Purchase Equipment — At the expiration of the Contract/Permit/Accreditation or at any time the Contract/permit/Accreditation is cancelled or terminated before such expiration, and the Authority takes over the management and operation of any or all of the services, the Authority shall have the right to immediately take over possession and control and utilize so much of the serviceable cargo handling tools, gears, machinery, equipment, including office equipment, furniture and fixtures of the CHSP as may be needed by the Authority for the continuous and uninterrupted operations of the services taken over. In such event, the Authority shall have the option to purchase the same at appraised or fair market value and payable in eight (8) quarterly installments, the first payment to fall due within first ten (10) days from the execution of the Deed of Sale; Provided, that the Authority shall exercise its option to purchase in writing within (30) days from the time it takes possession of said equipment, etc., mentioned above which it may utilize. In case the Authority opts not to purchase within the said period, just compensation shall be paid to the owner of the equipment for the time that the same had been utilized by the Authority.
Article IV
CPA Control and Supervision Over Operations
SECTION 4.01 Exercise of Powers and Functions of the Authority — The Authority shall exercise all its powers and functions as prescribed by R.A. 7621 in reference to cargo handling and other related services being performed by the CHSP who shall follow all rules and regulations, order and/or instructions that the Authority or its duly authorized representative has issued and/or promulgated, or may hereafter issue and/or promulgate for the purpose of securing maximum efficiency. The CHSP shall, upon notice by the Authority, submit itself to an evaluation of its cargo handling system and shall promptly effect the necessary changes, modification in the system which the Authority may instruct based on the results of the evaluation.
Article V
Claims and Liability for Losses and Damages
SECTION 5.01 Responsibility and Liability for Loss and/or Damage; Exceptions — The CHSP shall at its own expense handle all merchandise in all work undertaken by it diligently and in a skillful, workman-like and efficient manner.
The CHSP shall be solely responsible as an independent contractor/operator and shall promptly pay to the shipping company, consignees, consignors or other interested party or parties for the loss, damage or non-delivery of cargoes to the extent of the actual invoice or declared value per bill of lading, whichever is lower, for each package unless the value of the goods is otherwise specified or manifested or communicated in writing and supported by a certified packing list to the CHSP by the interested party or parties before the discharge or loading from/unto the vessel of the goods.
The CHSP shall likewise be liable for all damages that may be suffered on account of loss, damage or destruction of any merchandise while in its custody or control in any pier, shed, warehouse facility or other designated place under the supervision of the Authority.
However, the CHSP shall not be responsible for the condition of the contents of any package received, nor for the weight nor for any loss, injury or damage to the said cargo before or while the goods are being, received, or remain in the piers, sheds, warehouses or facility, if the loss, injury or damage is caused by force majeure or other causes beyond the CHSP’s control or capacity.
The CHSP shall be solely responsible for any and all injury, loss, or damage that may arise on account of the negligence or carelessness of the CHSP, its agents or employees in the performance of the undertaking under its Contract/Permit/Accreditation. The CHSP shall hold the Authority free at all times from any claim of third persons in connection with its operations as a cargo handling service provider.
SECTION 5.02 Payment of Claims; Disputes and Resources — While a shipping company carrier shall be required to respond to any consignee(s) or other interested party for loss, damage or destruction of cargo suffered while in the possession of the CHSP or under its control, the CHSP shall make prompt payment to such shipping company or carrier or its agent, of all claims for which it is determined that the CHSP is liable in conformity with the provisions of the Bill of Lading and/or other documents of probative value.
All claims for losses and/or damages to the cargoes shall be paid by the CHSP within fifteen (15) days from the date of formal filing of the same provided that all documents and supporting papers are complete and available. In case there is dispute as to who is responsible for the loss or damage between the CHSP, shipping company, or consignee(s), or interested party, the concerned parties may agree between or among themselves to jointly submit the dispute to the AUTHORITY for determination in the first instance. In the settlement of the dispute, the Authority shall consider all clauses and exceptions to the carriers bill or bills of lading where these may be relevant or applicable.
SECTION 5.03 Pilferage — The CHSP shall control pilferage which shall not exceed the limit as prescribed by the Authority.
Article VI
Labor-Management Relations
SECTION 6.01 Employment, Investigation and Dismissal of Employees and Labor Personnel — The CHSP shall utilize and employ members of the existing labor force as may be needed in the cargo handling operation subject to the individual screening by the CHSP. The Authority shall have the option to conduct a thorough character investigation of each and every employee of the CHSP and should it be discovered that employees or laborers with derogatory records have been employed, the CHSP shall take appropriate measures in order that their employment may be terminated immediately and to incorporate those conditions in its collective bargaining agreement with the union.
SECTION 6.02 Collective Bargaining Agreement — The CHSP, whenever dealing with organized labor, shall enter into a collective bargaining agreement with one labor union(s) duly chosen or designated as the sole and exclusive bargaining agent/s of the workers and employees in accordance with the Labor Code and its implementing rules. But in no case shall such agreement be beyond the actual life of the Contract/Permit/Accreditation of the CHSP.
SECTION 6.03 Availability of Manpower — The CHSP shall have, within a reasonable period prescribed by the AUTHORITY, in readiness and available at all times, sufficient manpower for all the cargo handling services covered by its Contract/Permit/Accreditation.
SECTION 6.04 Prompt Payment of Wages, Overtime, Benefits, etc. — The CHSP shall pay promptly, as they fall due, the wages and salaries, SSS premiums and other benefits of all laborers and employees, directly or individually, without the intervention whatsoever of any third person, entity, association, partnership or corporation in accordance with pertinent laws, rules and regulations. And in compliance thereto the CHSP shall keep a daily, weekly, and/or monthly record of payments signed by the laborers and employees indicating therein the number of hours and days work, and the corresponding wages or salaries received by each and the amount and nature of deductions, if any.
For all work of any nature whatsoever performed by the CHSP beyond the regular eight hours of work, including those performed during Sundays and Holidays, the CHSP shall pay its employees and laborers concerned such overtime and holiday premiums in accordance with the provisions of the collective bargaining agreement with the labor union(s) and/or in the absence thereof, the premiums provided for by law. Provided, that when for any reason or circumstances over which the CHSP has no control, the requested overtime work is delayed, suspended, or cancelled, the CHSP shall charge the requisitioner the amount aggregating the whole salaries and wages paid to employees and laborers assigned to fill the request in accordance with the rates agreed upon between the CHSP and the shipping companies or as prescribed by the Authority.
The CHSP shall pay its employees and workers such other benefits as night differential, emergency allowance and other benefits in accordance with existing laws.
SECTION 6.05 Maximum Working Hours — Except in case of emergencies, the CHSP shall not allow or require any worker to work more than twelve (12) hours a day.
Article VII
Records, Books of Account and Billing
SECTION 7.01 Records, Books of Accounts, Billing, etc. — The CHSP shall at all times keep and maintain up-to-date accurate records in accordance with the bookkeeping regulations of the Bureau of Internal Revenue and the requirements of the Authority.
In addition, the CHSP shall submit to the Authority appropriate reports on tonnage handled (inbound and outbound), list of overstaying cargoes, number of vessels serviced, claims filed for cargoes that were lost, undelivered and/or damaged and the action taken thereon by the CHSP, statements of billings, collection and disbursements, personnel strength and disposition, remittances to SSS, Medicare and all other obligations due to labor under existing laws, regulations and collective bargaining agreements.
SECTION 7.02 Visitorial Powers — The CHSP shall make available at all times during office hours for inspection, examination, and audit by the Authority, Commission on Audit and other government agencies exercising visitorial powers, all books of accounts, properties, inventories, payrolls and financial records of the CHSP and all other labor agreements and contracts provided that the authority to inspect, examine and audit the records and books of accounts shall be exercised by the visiting official concerned pursuant to and within the limits of the duties and functions vested upon their respective offices by express provision of law. DCISAE
SECTION 7.03 Overseer — The Authority shall oversee the operation and financial transactions of the CHSP in order to insure faithful compliance with the provisions of its Contract/Permit/Accreditation, and with such directives, rules and regulations as the Authority may promulgate from time to time.
Article VIII
Financial Obligation and Liabilities
SECTION 8.01 Working Capital — The CHSP shall maintain a deposit in a reputable bank the amount specified in its Contract/Permit/Accreditation as working capital to efficiently meet its day to day operational expenses involved for the proper rendition of services.
SECTION 8.02 Performance Bond to Insure Faithful Performances — To guarantee the full and faithful compliance with each and every term, stipulation, and condition in the Contract/Permit/ Accreditation, the CHSP shall, upon approval/issuance of the Contract/Permit/Accreditation, put up a Performance Bond in the amount specified by the AUTHORITY which shall be secured from a surety company acceptable to the AUTHORITY. The bond to be posted shall specifically contain a provision that, “This bond once accepted by the AUTHORITY (CPA) cannot be cancelled or withdrawn by the surety companies and/or the operators without the express consent of the CPA until their obligations under the Contract/Permit/Accreditation shall have been fully liquidated.” In no case shall the General Manager accept a bond not containing the said stipulation.
SECTION 8.03 Privilege Fee — In consideration of the right and privileges granted to the CHSP, the CHSP shall remit to the Authority (without prejudice to the authority’s right to subsequently impose a direct collection system) not later than the 10th day of each month a percentage, as required in its Contract/Permit/Accreditation, of its gross income derived from whatever services rendered in connection with the cargo handling operations for the previous month. Failure to pay the privilege fee on or before the due date shall be a ground for the cancellation of the Contract/Permit/Accreditation by the Authority and furthermore, the Authority shall proceed to collect and receive charges for services rendered by the CHSP at the CHSP’s expense, to be applied and credited to the privilege fee without prejudice to the Authority’s right to cancel the Contract/Permit/Accreditation as aforestated.
SECTION 8.04 Supporting Papers for Payment of Privilege Fee — The payment of the privilege fee shall be supported by copies of proper bills which shall be kept by the Authority. All receipts, as stated, shall specify the percentage as well as the amount of the privilege fee.
Article IX
Special Provisions
SECTION 9.01 Books of Account — If the CHSP is engaged in other businesses, it shall maintain a distinct book of accounts in its management and operation of the cargo handling services under the Contract/Permit/Accreditation. The set of books of account shall have prior approval of the Authority and shall be registered with the Bureau of Internal Revenue as required by existing bookkeeping regulations.
Article X
Prohibitions, Violations and Penalties
SECTION 10.01 Prohibitions against Assignment and Transfer of Contract/Permit Accreditation — There shall be no assignment, mortgage or transfer direct or indirect of the Contract/Permit/Accreditation or any portion thereof or any undertaking thereunder without the written approval of the Authority and neither shall there be any subletting or leasing of the privileges granted by the Authority to the CHSP.
SECTION 10.02 Prohibition Against Execution of Any Chattel Mortgage or Contract or Cargo Handling Equipment Without Prior Notice — Excepting such encumbrances or contract already existing on the date of effectivity of the Contract/Permit/Accreditation, the CHSP shall not execute any chattel mortgage, deed or conveyance or any other contract that may affect, encumber or impose any lien on any of the equipment or machinery used in the cargo handling operations without notifying the AUTHORITY. The rights of the AUTHORITY over the equipment or machinery shall be formally incorporated in specific provisions in the mortgage, conveyance or contract.
SECTION 10.03 Take-over by the AUTHORITY — The Authority shall have the right to take-over the management and operations of the cargo-handling services of the CHSP at the port concerned in any of the following instances:
1. In case of any emergency, such as strikes, lockout, stoppage of work and other causes of similar nature;
2. In case of violation of any of the terms and conditions of the Contract/Permit/Accreditation or provisions of law, government rules and regulations;
3. In case of cancellation or termination of the Contract/Permit/Accreditation;
4. In such other cases where the Authority deems that the take-over is warranted in order to protect and/or promote public interest.
SECTION 10.04 Grounds for Cancellation and/or Termination of Contract/Permit/ Accreditation — Violation by the CHSP of any of the terms and conditions of the Contract/Permit/ Accreditation shall be sufficient ground for revocation and cancellation of the Contract/Permit/ Accreditation by the Authority. The Authority upon discovery of the violation, shall inform the CHSP in writing of such violation and shall give the latter a period of six (6) months within which to shape up. If within six (6) months from such notice, the CHSP shall fail to comply with the said directive, the Authority shall have the right to revoke and/or cancel the Contract/Permit/Accreditation outright; PROVIDED, FURTHER, that in any of the following specific instances the Authority reserves the unqualified right to automatically cancel the Contract/Permit/Accreditation by written notice to the CHSP;
a. Failure of the CHSP without justifiable cause to remit the privilege fee to the Authority, to remit the SSS/Medicare and PAG-IBIG premiums, to pay its employees and workers their just and lawful salaries or wages as these obligations fall due;
b. Unjustified refusal of the CHSP to make available its books of account and other documents for inspection, examination or audit as provided for in its Contract/Permit/Accreditation or otherwise to submit to supervision, inspection and/or overseeing by the authority and/or its duly authorized representatives;
c. Existence of pilferage of cargoes in excess the limit prescribed by the Authority;
d. If the CHSP through any of its corporate officers, ranking officials or employees from the rank of section head or higher, engage in smuggling, gun-running, drug-trafficking, and other illegal acts within the territorial jurisdiction of the Authority;
e. If the CHSP engages in activities which would unduly cause cessation of operations of the cargo handling services;
f. If the CHSP sublets, subcontracts, or otherwise transfers, in whole or in part, its Contract/Permit/ Accreditation without prior written approval of the Authority.
SECTION 10.05 Non-Relief from Liability — Any forfeiture or cancellation of the Contract/ Permit/Accreditation shall not relieve the CHSP from any liability incurred under its Contract/Permit/ Accreditation.
SECTION 10.06 Other Pertinent Conditions — The CHSP shall comply with any other pertinent conditions as are provided in existing laws and rules and regulations.
Article XI
Amendments
SECTION 11.01 Amendments — Subject to the approval of the AUTHORITY, at any time during the effectivity of the CHSP’s Contract/Permit/Accreditation, amendments may be introduced to the Contract/Permit/Accreditation as may be consistent with CPA policies, rules and regulations and/or law.
SECTION 11.02 Compulsory Amendment Clause — The CHSP shall strictly comply with the condition that the Contract/Permit/Accreditation shall be subject to appropriate revision in accordance with the subsequent policy guidelines that may be issued by the CPA Board of Commissioners.
Article XII
Final Provisions
SECTION 12.01 Repealing Clause — All CPA orders, rules and regulations, memoranda, circulars or guidelines which are inconsistent herewith are hereby repealed or modified accordingly.
SECTION 12.02 Effectivity — This Administrative Order shall take effect fifteen (15) days after publication in a newspaper of general circulation.
Adopted: 19 June 1998
(SGD.) RAUL T. SANTOS
General Manager
Declaration of Policy
SECTION 1.01 Grant of Cargo-Handling Permit/Contract, Financial and Performance Audit — As a general rule, permits/contracts for the management and operation of cargo-handling services in all government ports within the jurisdiction of the Authority shall be awarded through a system of public bidding and only to duly organized Filipino domestic corporations. However, cargo-handling operators with existing permits/contracts, whether on hold-over or otherwise, shall be subjected to a performance and financial audit. And if found satisfactory and they do not have any outstanding obligations to the Authority, to labor, or to port users, their permits/contracts shall be renewed under such terms and conditions as the Authority may deem proper to impose, otherwise the permit/contract shall be cancelled, revoked, or withdrawn, and the same shall be subjected to public bidding.
Public bidding may be dispensed with for cargo handling services in ports with low cargo volumes and/or where the cargo handling operations are primarily manual. Provided, That, the Authority may classify or categorize cargo handling service providers in such ports in accordance with minimum standards prescribed by the Authority and grant accreditation under such terms and conditions as it may deem proper to impose.
The nature of cargo-handling services that is expected of the CHSP shall be taken into consideration in determining the term of the Contract/Permit/Accreditation.
SECTION 1.02 Strengthen Protection and Improve Welfare of Labor — The protection of labor in the cargo-handling industry shall be strengthened by strict compliance with labor standard laws and by imposing penalties on operators found engaged in such illegal activities, among others, the practice of the “Cabo” and/or “Kabit” system (subcontracting).
SECTION 1.03 Social Amelioration Fund — A cargo-handling operator shall comply with the Social Amelioration Fund program for its port- workers in accordance with the guidelines issued by the Authority to cover separation and other benefits over and above the retirement pay of workers.
SECTION 1.04 Maintenance of Wholesome Port — A cargo handling operator shall cooperate with and assist the Authority in the removal and prevention of port squatters. It shall adopt measures to ensure that its prospective employees are not squatting within the port premises.
Article II
Preliminary Provisions
SECTION 2.01 Definition of Terms — For purposes of this Order, the following terms, unless the context indicates otherwise, shall mean or be understood to mean, as follows:
a. Authority means the Cebu Port Authority;
b. Cabo refers to a person or group of persons or to a labor group which, in the guise of a labor organization, supplies workers to a licensed cargo handling service provider, with or without any monetary or other consideration whether in the capacity of an agent of the CHSP or as an ostensible independent contractor;
b. Cargo Handling Service Provider (CHSP) refers to any person or entity awarded the management and operations of cargo-handling services in a port by way of Contract/Permit/ Accreditation;
c. Kabit System refers to the arrangement between a CHSP and a person or group of persons or a labor group whereby the latter performs cargo handling services without its own contract/permit/accreditation but uses or subcontracts the contract/permit/accreditation of a legitimate operator without the permission or consent of the Authority.
c. Services refers to cargo handling services such as quayside/dockside services and shipside services.
Equipment and Facilities
SECTION 3.01 Cargo Handling Equipment — The CHSP shall have available at the commencement of the operation such equipment required by the Authority all in serviceable and ready-line condition. Provided, That within (3) months from the time the CHSP receives an order from the Authority, it shall have available for the operation of the services covered by its Contract/Permit/Accreditation such cargo handling machineries, gears, tools, equipment and materials as may be necessary to efficiently handle and sustain an uninterrupted cargo handling operations for all incoming and outgoing cargoes of all types and classes, including such reserve and standby machineries, equipment and materials to take care of fluctuations of port traffic, as well as breakdown of equipment as shall be determined and enumerated by the Authority.
SECTION 3.02 Equipment Renewal and Modernization — When so required by the Authority, the CHSP shall submit for approval a program for equipment renewal and modernization, consistent with its Contract/Permit/Accreditation with consideration on utilization, specialized gears for special types of cargo and other progressive material handling trends, concepts, and techniques; the CHSP shall acquire new equipment to replace such equipment which the Authority shall, upon careful inspection, consider unsafe, inefficient or uneconomical to operate by reason of age, wear, disrepair and other causes, Provided, That the CHSP shall procure additional modern equipment to meet the exigencies of the services brought by the increase in volume and type of cargo as the circumstances may demand.
SECTION 3.03 Fire-Fighting Component — The CHSP shall make available for its regular working force on a 24-hour basis fire-fighting equipment as prescribed in “Dockwork Safety and Health Standards” within sixty (60) days from the date of effectivity of its Contract/Permit/Accreditation.
SECTION 3.04 Improve Working Conditions — The CHSP shall undertake to improve the working conditions of its employees and workers by adopting the following measures:
a. Conduct in-service training program for all categories of personnel from management down the line to ordinary dock worker; for which purpose the CHSP shall provide the necessary funds, facilities and equipment for the proper implementation of this program;
b. Maintain and keep at its own expense toilet facilities in the wharf including wash basins and bathroom in areas designated by the Authority;
c. Provide its employees and workers recreation and social facilities in cooperation with existing labor union(s).
SECTION 3.05 Notice of Termination or Renewal of Contract/Permit or Accreditation — Ninety (90) days before the expiration of the Contract/Permit/Accreditation, the Authority shall decide and make known whether the services shall be taken over by the Authority itself, or be subject to bidding, or that the Contract/Permit/Accreditation shall be allowed to continue under terms and conditions imposed by the Authority. In the event that the Authority decides not to extend the Contract/Permit/Accreditation, the necessary arrangements between the Authority and the CHSP to assess and inventory all properties and equipment and perform such other related work shall be made within the said period.
SECTION 3.06 Option to Purchase Equipment — At the expiration of the Contract/Permit/Accreditation or at any time the Contract/permit/Accreditation is cancelled or terminated before such expiration, and the Authority takes over the management and operation of any or all of the services, the Authority shall have the right to immediately take over possession and control and utilize so much of the serviceable cargo handling tools, gears, machinery, equipment, including office equipment, furniture and fixtures of the CHSP as may be needed by the Authority for the continuous and uninterrupted operations of the services taken over. In such event, the Authority shall have the option to purchase the same at appraised or fair market value and payable in eight (8) quarterly installments, the first payment to fall due within first ten (10) days from the execution of the Deed of Sale; Provided, that the Authority shall exercise its option to purchase in writing within (30) days from the time it takes possession of said equipment, etc., mentioned above which it may utilize. In case the Authority opts not to purchase within the said period, just compensation shall be paid to the owner of the equipment for the time that the same had been utilized by the Authority.
Article IV
CPA Control and Supervision Over Operations
SECTION 4.01 Exercise of Powers and Functions of the Authority — The Authority shall exercise all its powers and functions as prescribed by R.A. 7621 in reference to cargo handling and other related services being performed by the CHSP who shall follow all rules and regulations, order and/or instructions that the Authority or its duly authorized representative has issued and/or promulgated, or may hereafter issue and/or promulgate for the purpose of securing maximum efficiency. The CHSP shall, upon notice by the Authority, submit itself to an evaluation of its cargo handling system and shall promptly effect the necessary changes, modification in the system which the Authority may instruct based on the results of the evaluation.
Claims and Liability for Losses and Damages
SECTION 5.01 Responsibility and Liability for Loss and/or Damage; Exceptions — The CHSP shall at its own expense handle all merchandise in all work undertaken by it diligently and in a skillful, workman-like and efficient manner.
The CHSP shall be solely responsible as an independent contractor/operator and shall promptly pay to the shipping company, consignees, consignors or other interested party or parties for the loss, damage or non-delivery of cargoes to the extent of the actual invoice or declared value per bill of lading, whichever is lower, for each package unless the value of the goods is otherwise specified or manifested or communicated in writing and supported by a certified packing list to the CHSP by the interested party or parties before the discharge or loading from/unto the vessel of the goods.
The CHSP shall likewise be liable for all damages that may be suffered on account of loss, damage or destruction of any merchandise while in its custody or control in any pier, shed, warehouse facility or other designated place under the supervision of the Authority.
However, the CHSP shall not be responsible for the condition of the contents of any package received, nor for the weight nor for any loss, injury or damage to the said cargo before or while the goods are being, received, or remain in the piers, sheds, warehouses or facility, if the loss, injury or damage is caused by force majeure or other causes beyond the CHSP’s control or capacity.
The CHSP shall be solely responsible for any and all injury, loss, or damage that may arise on account of the negligence or carelessness of the CHSP, its agents or employees in the performance of the undertaking under its Contract/Permit/Accreditation. The CHSP shall hold the Authority free at all times from any claim of third persons in connection with its operations as a cargo handling service provider.
SECTION 5.02 Payment of Claims; Disputes and Resources — While a shipping company carrier shall be required to respond to any consignee(s) or other interested party for loss, damage or destruction of cargo suffered while in the possession of the CHSP or under its control, the CHSP shall make prompt payment to such shipping company or carrier or its agent, of all claims for which it is determined that the CHSP is liable in conformity with the provisions of the Bill of Lading and/or other documents of probative value.
All claims for losses and/or damages to the cargoes shall be paid by the CHSP within fifteen (15) days from the date of formal filing of the same provided that all documents and supporting papers are complete and available. In case there is dispute as to who is responsible for the loss or damage between the CHSP, shipping company, or consignee(s), or interested party, the concerned parties may agree between or among themselves to jointly submit the dispute to the AUTHORITY for determination in the first instance. In the settlement of the dispute, the Authority shall consider all clauses and exceptions to the carriers bill or bills of lading where these may be relevant or applicable.
SECTION 5.03 Pilferage — The CHSP shall control pilferage which shall not exceed the limit as prescribed by the Authority.
Labor-Management Relations
SECTION 6.01 Employment, Investigation and Dismissal of Employees and Labor Personnel — The CHSP shall utilize and employ members of the existing labor force as may be needed in the cargo handling operation subject to the individual screening by the CHSP. The Authority shall have the option to conduct a thorough character investigation of each and every employee of the CHSP and should it be discovered that employees or laborers with derogatory records have been employed, the CHSP shall take appropriate measures in order that their employment may be terminated immediately and to incorporate those conditions in its collective bargaining agreement with the union.
SECTION 6.02 Collective Bargaining Agreement — The CHSP, whenever dealing with organized labor, shall enter into a collective bargaining agreement with one labor union(s) duly chosen or designated as the sole and exclusive bargaining agent/s of the workers and employees in accordance with the Labor Code and its implementing rules. But in no case shall such agreement be beyond the actual life of the Contract/Permit/Accreditation of the CHSP.
SECTION 6.03 Availability of Manpower — The CHSP shall have, within a reasonable period prescribed by the AUTHORITY, in readiness and available at all times, sufficient manpower for all the cargo handling services covered by its Contract/Permit/Accreditation.
SECTION 6.04 Prompt Payment of Wages, Overtime, Benefits, etc. — The CHSP shall pay promptly, as they fall due, the wages and salaries, SSS premiums and other benefits of all laborers and employees, directly or individually, without the intervention whatsoever of any third person, entity, association, partnership or corporation in accordance with pertinent laws, rules and regulations. And in compliance thereto the CHSP shall keep a daily, weekly, and/or monthly record of payments signed by the laborers and employees indicating therein the number of hours and days work, and the corresponding wages or salaries received by each and the amount and nature of deductions, if any.
For all work of any nature whatsoever performed by the CHSP beyond the regular eight hours of work, including those performed during Sundays and Holidays, the CHSP shall pay its employees and laborers concerned such overtime and holiday premiums in accordance with the provisions of the collective bargaining agreement with the labor union(s) and/or in the absence thereof, the premiums provided for by law. Provided, that when for any reason or circumstances over which the CHSP has no control, the requested overtime work is delayed, suspended, or cancelled, the CHSP shall charge the requisitioner the amount aggregating the whole salaries and wages paid to employees and laborers assigned to fill the request in accordance with the rates agreed upon between the CHSP and the shipping companies or as prescribed by the Authority.
The CHSP shall pay its employees and workers such other benefits as night differential, emergency allowance and other benefits in accordance with existing laws.
SECTION 6.05 Maximum Working Hours — Except in case of emergencies, the CHSP shall not allow or require any worker to work more than twelve (12) hours a day.
Article VII
Records, Books of Account and Billing
SECTION 7.01 Records, Books of Accounts, Billing, etc. — The CHSP shall at all times keep and maintain up-to-date accurate records in accordance with the bookkeeping regulations of the Bureau of Internal Revenue and the requirements of the Authority.
In addition, the CHSP shall submit to the Authority appropriate reports on tonnage handled (inbound and outbound), list of overstaying cargoes, number of vessels serviced, claims filed for cargoes that were lost, undelivered and/or damaged and the action taken thereon by the CHSP, statements of billings, collection and disbursements, personnel strength and disposition, remittances to SSS, Medicare and all other obligations due to labor under existing laws, regulations and collective bargaining agreements.
SECTION 7.02 Visitorial Powers — The CHSP shall make available at all times during office hours for inspection, examination, and audit by the Authority, Commission on Audit and other government agencies exercising visitorial powers, all books of accounts, properties, inventories, payrolls and financial records of the CHSP and all other labor agreements and contracts provided that the authority to inspect, examine and audit the records and books of accounts shall be exercised by the visiting official concerned pursuant to and within the limits of the duties and functions vested upon their respective offices by express provision of law. DCISAE
SECTION 7.03 Overseer — The Authority shall oversee the operation and financial transactions of the CHSP in order to insure faithful compliance with the provisions of its Contract/Permit/Accreditation, and with such directives, rules and regulations as the Authority may promulgate from time to time.
Article VIII
Financial Obligation and Liabilities
SECTION 8.01 Working Capital — The CHSP shall maintain a deposit in a reputable bank the amount specified in its Contract/Permit/Accreditation as working capital to efficiently meet its day to day operational expenses involved for the proper rendition of services.
SECTION 8.02 Performance Bond to Insure Faithful Performances — To guarantee the full and faithful compliance with each and every term, stipulation, and condition in the Contract/Permit/ Accreditation, the CHSP shall, upon approval/issuance of the Contract/Permit/Accreditation, put up a Performance Bond in the amount specified by the AUTHORITY which shall be secured from a surety company acceptable to the AUTHORITY. The bond to be posted shall specifically contain a provision that, “This bond once accepted by the AUTHORITY (CPA) cannot be cancelled or withdrawn by the surety companies and/or the operators without the express consent of the CPA until their obligations under the Contract/Permit/Accreditation shall have been fully liquidated.” In no case shall the General Manager accept a bond not containing the said stipulation.
SECTION 8.03 Privilege Fee — In consideration of the right and privileges granted to the CHSP, the CHSP shall remit to the Authority (without prejudice to the authority’s right to subsequently impose a direct collection system) not later than the 10th day of each month a percentage, as required in its Contract/Permit/Accreditation, of its gross income derived from whatever services rendered in connection with the cargo handling operations for the previous month. Failure to pay the privilege fee on or before the due date shall be a ground for the cancellation of the Contract/Permit/Accreditation by the Authority and furthermore, the Authority shall proceed to collect and receive charges for services rendered by the CHSP at the CHSP’s expense, to be applied and credited to the privilege fee without prejudice to the Authority’s right to cancel the Contract/Permit/Accreditation as aforestated.
SECTION 8.04 Supporting Papers for Payment of Privilege Fee — The payment of the privilege fee shall be supported by copies of proper bills which shall be kept by the Authority. All receipts, as stated, shall specify the percentage as well as the amount of the privilege fee.
Article IX
Special Provisions
SECTION 9.01 Books of Account — If the CHSP is engaged in other businesses, it shall maintain a distinct book of accounts in its management and operation of the cargo handling services under the Contract/Permit/Accreditation. The set of books of account shall have prior approval of the Authority and shall be registered with the Bureau of Internal Revenue as required by existing bookkeeping regulations.
Article X
Prohibitions, Violations and Penalties
SECTION 10.01 Prohibitions against Assignment and Transfer of Contract/Permit Accreditation — There shall be no assignment, mortgage or transfer direct or indirect of the Contract/Permit/Accreditation or any portion thereof or any undertaking thereunder without the written approval of the Authority and neither shall there be any subletting or leasing of the privileges granted by the Authority to the CHSP.
SECTION 10.02 Prohibition Against Execution of Any Chattel Mortgage or Contract or Cargo Handling Equipment Without Prior Notice — Excepting such encumbrances or contract already existing on the date of effectivity of the Contract/Permit/Accreditation, the CHSP shall not execute any chattel mortgage, deed or conveyance or any other contract that may affect, encumber or impose any lien on any of the equipment or machinery used in the cargo handling operations without notifying the AUTHORITY. The rights of the AUTHORITY over the equipment or machinery shall be formally incorporated in specific provisions in the mortgage, conveyance or contract.
SECTION 10.03 Take-over by the AUTHORITY — The Authority shall have the right to take-over the management and operations of the cargo-handling services of the CHSP at the port concerned in any of the following instances:
1. In case of any emergency, such as strikes, lockout, stoppage of work and other causes of similar nature;
2. In case of violation of any of the terms and conditions of the Contract/Permit/Accreditation or provisions of law, government rules and regulations;
3. In case of cancellation or termination of the Contract/Permit/Accreditation;
4. In such other cases where the Authority deems that the take-over is warranted in order to protect and/or promote public interest.
SECTION 10.04 Grounds for Cancellation and/or Termination of Contract/Permit/ Accreditation — Violation by the CHSP of any of the terms and conditions of the Contract/Permit/ Accreditation shall be sufficient ground for revocation and cancellation of the Contract/Permit/ Accreditation by the Authority. The Authority upon discovery of the violation, shall inform the CHSP in writing of such violation and shall give the latter a period of six (6) months within which to shape up. If within six (6) months from such notice, the CHSP shall fail to comply with the said directive, the Authority shall have the right to revoke and/or cancel the Contract/Permit/Accreditation outright; PROVIDED, FURTHER, that in any of the following specific instances the Authority reserves the unqualified right to automatically cancel the Contract/Permit/Accreditation by written notice to the CHSP;
a. Failure of the CHSP without justifiable cause to remit the privilege fee to the Authority, to remit the SSS/Medicare and PAG-IBIG premiums, to pay its employees and workers their just and lawful salaries or wages as these obligations fall due;
b. Unjustified refusal of the CHSP to make available its books of account and other documents for inspection, examination or audit as provided for in its Contract/Permit/Accreditation or otherwise to submit to supervision, inspection and/or overseeing by the authority and/or its duly authorized representatives;
c. Existence of pilferage of cargoes in excess the limit prescribed by the Authority;
d. If the CHSP through any of its corporate officers, ranking officials or employees from the rank of section head or higher, engage in smuggling, gun-running, drug-trafficking, and other illegal acts within the territorial jurisdiction of the Authority;
e. If the CHSP engages in activities which would unduly cause cessation of operations of the cargo handling services;
f. If the CHSP sublets, subcontracts, or otherwise transfers, in whole or in part, its Contract/Permit/ Accreditation without prior written approval of the Authority.
SECTION 10.05 Non-Relief from Liability — Any forfeiture or cancellation of the Contract/ Permit/Accreditation shall not relieve the CHSP from any liability incurred under its Contract/Permit/ Accreditation.
SECTION 10.06 Other Pertinent Conditions — The CHSP shall comply with any other pertinent conditions as are provided in existing laws and rules and regulations.
Article XI
Amendments
SECTION 11.01 Amendments — Subject to the approval of the AUTHORITY, at any time during the effectivity of the CHSP’s Contract/Permit/Accreditation, amendments may be introduced to the Contract/Permit/Accreditation as may be consistent with CPA policies, rules and regulations and/or law.
SECTION 11.02 Compulsory Amendment Clause — The CHSP shall strictly comply with the condition that the Contract/Permit/Accreditation shall be subject to appropriate revision in accordance with the subsequent policy guidelines that may be issued by the CPA Board of Commissioners.
Final Provisions
SECTION 12.01 Repealing Clause — All CPA orders, rules and regulations, memoranda, circulars or guidelines which are inconsistent herewith are hereby repealed or modified accordingly.
SECTION 12.02 Effectivity — This Administrative Order shall take effect fifteen (15) days after publication in a newspaper of general circulation.
Adopted: 19 June 1998
(SGD.) RAUL T. SANTOS
General Manager