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[ DEPARTMENT CIRCULAR NO. DC2018-03-0005, March 27, 2018 ]


Adopted: 09 February 2018
Date Filed: 27 March 2018

WHEREAS,  it is the policy of the state to rationalize,  Integrate,  and coordinate the various programs of the Government towards self-sufficiency and enhanced productivity in power and energy without sacrificing ecological concerns;

WHEREAS, Section 5(1) of Republic Act No. 7638 mandates the DOE to devise ways and means of giving direct benefits to the province, city, or municipality, especially  the  community  and  people  affected,  and  equitable  and  preferential benefit to the region that hosts the energy resource and/or the energy-generating facility.  Provided,  however,  That  the  other  provinces,  cities,  municipalities,  or regions shall not be deprived of their energy requirements;

WHEREAS, Energy Regulations (“E.R.”) No. 1-94 Issued by the Department of Energy (DOE) operationalize  the implementation  of Section 5(i) of Republic Act No. 7638;

WHEREAS,  Section  66  of  R.  A.  No,  9136,  otherwise  known  as  the  “Electric Power Industry Reform Act of 2001” and Rule 29(A) of its Implementing  Rules and Regulations of EPIRA-IRR which requires all energy generation companies and/or energy resource developers to provide financial benefits equivalent to one centavo   per  kilowatt-hour   (P0.01/kWh)   of  the  total  electricity   sales  of  the generation facility to the region, province, city or municipality and barangay that host the generation facility as well as the establishment of corresponding trust accounts and the administration thereof by the DOE;

WHEREAS,   on   29   October   1997,   Republic   Act   No.   8371   was   enacted, recognizing and promoting the rights of Indigenous Cultural Communities (ICCs)/Indigenous  People  (IPs), particularly  their rights to their ancestral  lands and domains to ensure their economic, social and cultural well-being.

there  is  a  need  to  recognize  the  rights  of  the  ICCs/Ps  to  their ancestral domain and the natural resources therein, specifically the right for an equitable share of the benefits from generating facilities and/or energy resources by as defined under the ER No. 1-94 Program and corroborated on Rule 29 (A) of the EPIRA-IRR;

WHEREAS, there is a need to strengthen the cooperation among the energy resource developers and/or power producers and the host LGUs/Region/s to facilitate   the  process   of  providing   direct  benefits   to  the  ICCs/IPs   through simplified implementation procedures;

NOW, THEREFORE, FOR AND IN CONSIDERATION OF THE FOREGOING PREMISES, the DOE hereby adopts and promulgates the following guidelines in recognition of the rights of the ICCs/IPs in their ancestral domains and to access the financial benefits pursuant to Rule 29(A) of the EPIRA-IRR and Section 66 of Republic Act No. 9136.

Section 1. Scope and Coverage

1.1 All legitimate and bonafide ICCs/IPs, duly recognized and accredited by the National Commission on Indigenous People, and issued with Certificate of Ancestral Domain Title that host the generating facilities and/or energy resources  shall be entitled to the financial benefits under the ER No. 1-94
Program; and
1.2 The financial benefits shall cover the Development  and Livelihood and Reforestation,  Watershed Management,  Health, and Environment Enhancement components of ER 1-94 Funds.
Section 2. Definition of Terms
2.1 Ancestral   Domains   refer  to  all  areas   generally   belonging   to  ICCs/IPs comprising lands, inland waters, coastal areas and natural resources therein, held under a claim of ownership, occupied or possessed by the ICCs/IPs by themselves or through their ancestors, communally or Individually since time immemorial,  continuously  to  the  present  except  when  interrupted  by  war, force majeure or displacement by force, deceit, stealth or as a consequence of government projects or any other voluntary dealings entered into by government and private individual/corporations and which are necessary to ensure their economic, social and cultural welfare. It shall include ancestral lands, forests, pasture, residential, agricultural and other lands individually owned whether alienable or disposable or otherwise, hunting grounds, burial grounds,   worship   areas,   bodies   of   water,   mineral,   and   other   natural resources, and lands which may no longer be exclusively occupied by the ICCs/IPs but which they traditionally had access to for their subsistence and traditional   activities,   particularly   home  ranges  of  ICCs/Ps  who  are  still nomadic and/or shifting cultivators.

2.2 Ancestral   Lands   refer   to   land   occupied,   possessed   and   utilized   by individuals, families and clans who are members of the ICCs/IPs since time immemorial, by themselves or through predecessors-in-interest  under claims of  individual  or  traditional  group  ownership,  continuously  to  the  present except  when  interrupted  by  war,  force  majeure  or displacement  by  force, deceit, stealth or as a consequence of government projects or any other voluntary dealings entered into by government and private individual/ corporations  including  but  not  limited  to,  residential  lots,  rice  terraces  or paddies, private forests, swidden farms and tree lot.

2.3 Free and Prior Informed Consent shall mean the consensus of all members of  the  ICCS/IPs  to  be  determined   in  accordance   with  their  respective customary  laws and practices,  free from any external  manipulation, interference, coercion and obtained after fully disclosing the intent and scope of the activity, in a language and process understandable to the community.

2.4 Indigenous  Cultural  Communities/Indigenous   People  refer  to  a  group  of people of homogenous  societies  identified  by self-ascription  and ascription by   others,   who   have   continuously   lived   as   organized   community   on communally bounded and defined territory, and who have, under claims of territory  since  time  immemorial   occupied,   possessed   and  utilized  such territories,  sharing  common  language,  customs,  traditions  and  other distinctive  cultural trails, or who have through  resistance  to political,  social and cultural inroads of colonization, non-indigenous religions and cultures, became  historically  differentiated  from  the  majority  of  Filipinos,  ICCs/IPs shall likewise include people who are regarded as indigenous on the account of their descent from the population which inhabited the country, at the time of  conquest  or  colonization,  or  at  the  time  of  inroads  of  non-indigenous religions and cultures of the establishment of present state boundaries, who retain  some  or  all  of  their  own  social,  economic,  cultural  and  political institutions, but who may have been displaced from their traditional domains or who may have resettled outside their ancestral domains.
2.5 Watershed is a land area drained by a stream or fixed body of water and its tributaries having common outlet for surface run-off. It encompasses the topographic   and   hydrological   boundaries   of   the   total   land   area   that contributes  to  the  flow  of the  water  body,  upstream  of the  water  tapping point, such as the dam crest.
Section 3. Coverage of Beneficiaries. To recognize the rights of Indigenous ICCs/IPs on their rights to their ancestral lands and domains, Host Communities under Section 3 of Rule 29 (A) of the EPIRA IRR shall refer to local government units (barangays, municipality/city, province, or region) and Ancestral Domains/Lands of ICCs/IPs where the energy generating facility and/or energy resource is physically located.

Section   4.   Allocation   of   Shares.   To   address   the   specific   and   unique development  needs/requirement   of  ICCs/IPs,  the  allocation  of  shares  under Section 4 of Rule 29(A) of the EPIRA IRR shall be distributed in the following manner:
4.1 The 25% share for development and livelihood fund (DLF) and 25% share of reforestation,  watershed management,  health and/or environment enhancement fund (RWMHEEF) from the one centavo per kilowatt-hour (P0.01/kWh) of the total electricity sales as financial benefit of the host communities,  in non-highly  urbanized  cities, in non-highly  urbanized  cities, shall be applied in the following manner:

4.1.1  Designated resettlement area/s - 5%
4.1.2  Host barangay/s - 20%
4.1.3  Host municipality/ies - 35%
4.1.4  Host province/s - 30%
4.1.5  Host region/s and - 5%
4.1.6  Host organized ICCs/IPs - 5%

In the  absence  of designated  resettlement  area/s,  funds  allocated  for the resettlement shall form part of the host barangay/s.

In the absence of organized legitimate ICCs/IPs, funds allocated for the Host organized ICCs/IPs Community shall form part of the host region.
4.2 For highly urbanized cities, financial benefits of host communities, shall be applied in the following manner:
4.2.1  Designated resettlement area/s - 10%
4.2.2  Host Barangay/s - 30%
4.2.3  Host Cities - 55%
4.2.4  Host organized ICCs/IPs - 5%

In the  absence  of designated  resettlement  area/s,  funds  allocated  for the resettlement shall form part of the host barangay/s.

In the absence of organized legitimate ICCS/IPs, funds allocated for the host organized ICCs/IPs Community shall forrn part of the host city.
Section 5. Project Implementation and Approval. The evaluation and approval of project proposals work programs endorsed by the host community through the Generation  Company  and/or  energy  resource  developer  under  Section  6 Rule
29(A) of the EPIRA IRR shall be guided by the following principles:

5.1 The Generation Company and/or energy resource developer, through its designated COMREL shall assist the host Communities in the preparation of annual work program/project  proposals  qualified  by the DOE to be implemented in a given year. With regard to the annual work program/project proposals  of  the  host  ICCS/IPs,  it  would  require  an  endorsement  by  the National  Commission  of  Indigenous  People  (NCIP)  for  submission  to  the DOE. The amount of financial benefits accruing to the pertinent funds in the immediate  preceding  year shall be used as a basis  for the preparation  of annual work program (AWP) project proposals that shall be submitted by the Generation Company and/or energy resource developer to the DOE.

5.2 Upon  submission  of  complete  documents  of  the  AWP/project  proposals, project implementation shall proceed in any of the following manner;

5.3 For DLF and RWHEEF projects, a Memorandum  of Agreement (MOA) shall be entered into by and among the DOE, generation company and/or energy resource developer, the concerned Host Communities and NCIP, if needed, to effect funds commitment and project implementation.

5.4 The DOE shall then make the necessary fund allocation and shall forthwith release the project funds directly to the concerned Host Communities, copied NCIP, if needed, within fifteen (15) days upon submission of complete supporting documents pursuant to the provisions in the MOA.

Section   6.   Amendment   on   Audit   of   Financial   Benefits   and   Project Monitoring under Section 8 Rule 29(A) of the EPIRA IRR.
6.1 The DOE shall review and audit the source of fund, particularly on the total electricity  sales of the generation  facility to determine  the financial benefits due to the Host Communities.

6.2 In the event of unjustified disbursement of fund and non-completion  or delay In the implementation of projects by the Host Communities and the project implementer, the DOE shall defer the releases of funds for subsequently approved projects and take appropriate reasonable measures in accordance with any existing and future government rules and regulations until such time that the Host Communities/project implementer would be able to justify disbursement of funds to the satisfaction of the DOE or deputized/resident auditor of the COA.
Section 7. Settlement of Disputes. All conflicts or disputes arising from the implementation  of these rules and regulations  shall be under the jurisdiction  of the DOE.

Should any conflict of jurisdiction such as issue on the geographical  location of the  generation  facilities  and/or  energy  resource  developer,  and/or  boundary dispute arise, the matter shall be resolved amicably among the stakeholders involved, otherwise, it shall be referred to the NCIP, DILG, and ERC, where the dispute resolution is applicable.
The DOE shall hold in abeyance the processing  of project proposals submitted by the Host Communities involved or affected until said conflict/dispute has been resolved.

Section   8.   Administrative   Operating   Guidelines   for   the   Inclusion   of ICCs/IPs.  Within one hundred  eighty (180) working days from the effectivity  of this Circular, the DOE, through the Electric Power Industry Management Bureau, shall   issue   an  Administrative   Operating   Guidelines   for  the  availment   and utilization of the financial benefits by the ICCS/IPs pursuant to the amendments hereof.

Section   9.  Repealing   Clause.   Except  insofar  as  that  may  be  manifestly inconsistent herewith, nothing in this Circular shall be construed as to repeal any of the mechanisms already existing or responsibilities already provided for under existing rules.

Section 10. Separability Clause. If for any reason, any provision of this Circular is declared unconstitutional  or invalid, the other parts or provisions hereof which are not affected thereby shall continue to be in full force and effect.

Section  11. Effectivity  Clause.  These  rules  shall  take  effect  on the fifteenth (15th)  day  from  the  date  of  its  publication  in  two  (2)  newspapers  of  general circulation.

Issued this        day of January 2018 in Energy Center. Rizal Drive, BGC, Taguig City, Metro Manila

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