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Pursuant to Presidential Decree No. 474, Executive Order Nos. 125/125-A, Philippine Merchant Marine Rules and Regulations, 1997, as amended and the International  Maritime  Organization  (IMO)  Maritime  Safety  Circular  (MSC)  No. 349 (92) on Code for Recognized Organizations (RO Code), Marine Environment Protection Committee (MEPC).237 (65) and the International Labor Organization, the following rules are hereby adopted:

I. OBJECTIVES

This  Circular  aims  to  provide  standards,  rules  and  guidelines  on  the  scope, terms, conditions, procedures and requirements for the accreditation of Organizations which will perform statutory certification and other related services to Philippine shipping companies and their Philippine-registered  ships, on behalf of the Administration, following mandatory IMO and ILO instruments and national legislation and regulations.

II. COVERAGE

This Circular shall apply to:

1.     Organizations  as  defined  under  relevant  mandatory  IMO  instruments  and national legislation that will perform statutory certification and services to all Philippine  shipping companies  and their Philippine-registered  ships, of size and tonnage under IMO instruments and national legislation.

2.    ROs  that  have  been  granted  accreditation/recognition   and  have  existing
Memorandum of Agreements (MOA) with the Administration.

III.   DEFINITION OF TERMS

As used in this Circular, the following terms are understood to mean:

1. Administration - refers to the Maritime Industry Authority (MARINA).

2. Authorization  - refers  to the delegation  of authority  to an RO to perform statutory certification and services on behalf of the Administration as detailed in the MOA to be executed between the Administration and RO.

3. Accreditation   -  the  official  recognition   of  the  organization   to  perform statutory certification and services for Philippine-registered  ships on behalf of the Administration after full compliance with the requirements of this Circular.

4. Certifying Bodies - refers to organization providing auditing and certification to ROs to assure  that they meet the specific  standards  and requirements relating to their performances and services.

5. IMO  instrument  -  refers  to  IMO  Conventions,   Protocols,  Amendments, Recommendations,  Code, Guidelines and Resolutions.

6.     Memorandum  of  Agreement  (MOA)  -  a  written  Agreement  entered  into between the Administration and an RO for the latter to perform statutory certification  and  other  services,  as  may  be  agreed  upon  based  on  the elements included in an agreement as set out in appendix 3 of RO Code.

7.     Oversight - refers to any activity carried out by the Administration to ensure that the service of the RO complies with IMO and national requirements  for Philippine shipping companies and their Philippine-registered  ships.

8.     Recognized  Organization  (RO) - refers to an organization  that has been assessed  by the Administration  and have complied  with the RO Code and the provisions of this Circular and has entered into a MOA with the Administration.

9.     RO CODE  - refers  to the Code  adopted  by the IMO  through  Resolutions MSC. 349(92) and MEPC. 237(65) that serves as the international standard and consolidated instrument containing minimum criteria against which organizations are assessed towards recognition and authorization as well as the guidelines for oversight by Flag States.

10. Statutory Certification and Services - refers to the issuance of statutory certificates  and  services  provided  for  Philippine  shipping  companies  and their Philippine-registered ships, under the authority of laws, rules and regulations  of the Philippine  Government  through  the Administration, consistent with mandatory IMO instruments and other related international agreements and national legislation, rules and regulations.

IV.  GENERAL PROVISIONS

1.     Only organizations  which have existing Memorandum  of Agreement  (MOA) with the Administration  may be authorized  to perform  statutory  certification and services to Philippine shipping companies and their Philippine-registered ships in conformity  with Regulation  1/6 of International  Convention  for the Safety of Life at Sea (SOLAS),  1974, as amended,  Annex I Regulation  6, Annex II Regulation 8, Annex VI Regulation 5 of the International Convention for the Prevention of Pollution from Ships (MARPOL) and Article 13 of International  Convention  on Load  Line (1966),  Maritime  Labor  Convention and other applicable international conventions, codes and other analogous requirements.

2.     The ROs may, upon signing  of the MOA in accordance  with this Circular, perform statutory certification and services to Philippine shipping companies and  their  Philippine-registered   ships  in  accordance  with  applicable  IMO instruments, the national legislation, rules and regulations.

3.     The organization/entity  must be duly registered and allowed to operate in the
Philippines.

4.     The  ROs  shall  be  assessed  by  the  Administration  following  these  set  of procedures  formulated  herein  to ensure  compliance  with the provisions  of the RO Code, including its subsequent amendments, as may be deemed necessary.

V. SPECIFIC PROVISIONS

1.     SCOPE OF AUTHORIZATION

1.   The  RO  shall  be  authorized,  through  a  Memorandum  of  Agreement (MOA),   to  carry  out  the  statutory   certification   and  services,   under mandatory IMO and ILO instruments and national legislations, rules and regulations,   to  Philippine   shipping   companies   and   their   Philippine- registered ships, of applicable size and type, engaged or shall engage in international voyages including those in the domestic trade.

A copy of the template of the MOA is attached herein as Annex “A” as an integral part of this Circular.

2.   The   RO   shall,   based   on   the   provisions   of   the   RO   Code   and internationally recognized quality standards, provide the effective and continuous  implementation  of  their  quality  management  systems including  their commitment  to quality, safety, security and protection  of the environment.

3.   The statutory certificates issued by the ROs shall bear the official logo of the  Administration   or  the  official  seal  of  the  Philippines  and  which contains text that the certificates were issued under the Authority of the Republic of the Philippines.

4.   The Administration may agree, on a case to case basis, to authorize the RO to perform  statutory  certification  and services  outside  the scope of the existing MOA.

5.  The RO shall be free to enter into contracts directly with clients. Such contracts may contain the RO’s normal contractual conditions for limiting its legal liability.

6.  The RO shall perform statutory certification and services by the use of competent surveyors and auditors who are duly qualified, trained and authorized to perform all duties and activities incumbent upon their employer, within their level of work-responsibility.

7.   The  RO  and  its staff  shall  not engage  in any  activities  that  may  cast doubt on their independence of judgment and integrity in relation to their statutory certification and services for Philippine shipping companies and their Philippine-registered  ships.

8.   The  personnel  of ROs  shall  be free  from  any  undue  influence,  which might  affect  their  judgment  in  performing   statutory  certification   and services to Philippine shipping companies and their Philippine-registered ships. The RO shall establish procedures to prevent any person or organization  external to the organization  from influencing  the results of the services carried out.

The   implementation   of   these   procedures   shall   be   assessed   by   the Administration and included in its oversight function.

2.     CERTIFICATION    FOR   CONVENTIONS    NOT   IN   FORCE    OR   NOT RATIFIED BY THE PHILIPPINES

Where a ship is surveyed and found to be in compliance with a Convention that is either not in force has not been ratified by the Philippines, the RO may issue a Statement/Document  of Compliance  on behalf of the Administration in accordance with the MOA. The said document is subject to the same annual/intermediate  audit as a Convention Certificate.

3. REMUNERATION

The statutory certification and services carried out by RO to Philippine- registered ships shall be directly charged to the shipping company.

The ROs shall charge reasonable fees for the statutory certification services.

4. USE OF SUBCONTRACTORS/SERVICE SUPPLIERS

Upon  approval  by  the  Administration,   the  ROs  may  use  the  exclusive surveyors of another Organization with which the former has a bilateral agreement.  The use of non-exclusive  surveyors  may  be allowed  provided such surveyors and all services and functions performed by them are subject to  the  quality  management  system  of  the  concerned  ROs  and  may  be subject to the oversight function of the Administration.

The privileges by virtue of the authority delegated to the ROs will not in any way create a contractual relationship between the Administration and the exclusive and non-exclusive surveyors.

The RO may utilize its approved suppliers of support services to assist in, statutory  surveys  and certification,  in accordance  with IACS Unified Requirement Z17, or its amendments, or it passes the quality management systems acceptable to the RO.

VI.  CONDITIONS FOR RECOGNITION

The ROs shall comply with the following general qualification, and documentary requirements:

1.     General Qualifications

1.   The  organization  to  be  recognized  shall  have  adequate  resources  in terms  of  technical,  managerial  and  research  capabilities  to  conduct statutory certification in accordance with the minimum standards for ROs acting on behalf of the Administration, as set out in the RO Code, and as may  be amplified  by the procedures  that  may  be promulgated  by the Administration.

2.    The organization  to be recognized  shall meet the standards  set by the
RO Code.

3.    This Authority may consider the performance of the applicant as reported by the Port State Control Memorandum of Understanding regimes.

4.    The RO shall be governed  by the principles  of ethical behavior,  which shall be contained in its Code of Conduct and Ethical Standards;

5.    The  RO  shall  establish  a branch  Office  in the  Philippines  established under the Philippine  laws with a duly appointed  local representative,  in the case of a foreign-established organization.

VII. DOCUMENTARY REQUIREMENTS

The applicant-company  shall submit the following  documents  in support  of the application:

1.     Letter of intent/application;

2.     Copy   of   company   registration/Articles    of   Incorporation    and   By-Laws issued/Memorandum   and  Articles  of  Partnership  issued  by  the  Securities and Exchange Commission;
3.     Copy   of   Quality   Assurance   Certification   issued   by   a   certifying   body acceptable to the Administration;
4.     Directory of Officers, Auditors, Surveyors, or Officials of the RO showing their competence and qualifications;
5.     Copy of the Code of Ethics and Ethical Standards by which the ROs’ ethical behavior is governed with respect to assurance of adequate performance on services, confidentiality of information, and independence between the personnel providing consultancy services and those involved in the statutory certification and services; and
6.         Track record or general information that will show the past achievements or, performance  of an RO relating  to statutory  certification  and  services  from other flag states.

VIII. PROCEDURAL REQUIREMENTS

1.     The  applicant  shall  file  its  application  in  writing  with  the  Administration, together with the pre-approval documents, as required by this Circular.

2.     As  provided  in  Section  XII,  an  accreditation   fee  shall  be  paid  to  the
Administration.
3.     The Administration shall conduct an initial audit of the applicant's certification procedures,  after  which,  the  Administration  and  the  applicant  will  sign  a MOA, valid for a period not exceeding five (5) years, subject to annual review by the Administration.  The MOA may be renewed subject to the completion of  a  renewal  audit.  The  applicant  should  submit  their  application  six  (6) months prior to its expiration.
4.     The  negotiation  and  signing  of  the  MOA  is  designated  to  the  MARINA Administrator.
5.     Certificate  of Accreditation  shall be issued after signing  of the MOA which shall be co-terminus with the validity of the MOA.

6.     The Administration  will submit a report on the approval of the recognition of the RO and the signing of the MOA for the information of the MARINA Board and IMO Global Integrated Shipping Information System (GISIS).

IX.  OVERSIGHT FUNCTION OF THE ADMINISTRATION  OVER ROs

The MARINA reserves the right to audit the ROs upon showing of clear grounds of  violation  of  the  MOA  or  at  the  instance  of  the  Administration  whenever  it deems the audit warranted

X.   REPORTING REQUIREMENT

1.     The RO shall inform the Administration  of the work carried out for Philippine shipping companies and their Philippine-registered  ships and shall furnish a copy of the audit reports and certificates issued within thirty (30) days, after such  survey/audit/inspection.   An  electronic  submission  of  the  documents may be provided to the Administration.

2.     The RO or its attending  surveyor  shall immediately  ensure  that corrective action  is  carried  but  for  every  non  conformities  noted  and  shall,  in  due course,  notify  and  provide  any  action  or  certificate  to  the  Administration within fifteen (15) days after the ensuing inspection/survey in the following instances:

a.   In  cases  where  the  condition  of  a  ship  or  its  equipment  does  not correspond substantially with the particulars of the relevant statutory certificate; or
b.   The ship is not fit to proceed to sea without danger to the ship or persons onboard; or
c.   The  ship  presents   an  unreasonable   threat  of  harm  to  the  marine environment; or
d.   The ship is a threat on the security destination of ports or coastal states; or
e.   There is a significant danger to seafarers’ safety, health or security, and
f.     Other similar or analogous incidents.

XI.  VALIDITY OF CERTIFICATE

The Certificate of Accreditation  shall be valid for a period not exceeding five (5) years subject to the provisions of Section VI and continued compliance with the provisions  of  this  Circular  as  determined  during  annual  audits  and  result  of oversight   activity.  Continuous   possession   of  valid  and  updated   documents required under Section VII and Section IX on the Oversight Functions of the Administration over the ROs shall be strictly observed.

XII. FEES AND CHARGES

The fees and charges shall be as follows:

1.    Accreditation fee - P100,000.00 + documentary stamp fee
2.    Audit fee - P50,000.00/Audit

XIII. ADMINISTRATIVE  SANCTIONS

1.     The Administration  shall issue  Show  Cause  Order  based  on the following grounds:

.1   Failure  to maintain  the conditions  for accreditation  of ROs pursuant  to this Circular and
.2   Violation of any rules/regulations  and of any of the general and specific Terms and Conditions of Accreditation.

2.    After due process, the following fines and penalties shall be imposed:

.1   First Offense - P250,000.00
.2   Second  Offense  -  P500,000.00  +  suspension  of  Certificate  for  six  (6 months)
.3   Third Offense - P750,000.00 + cancellation of Certificate

XIV.   REPEALING CLAUSE

Any provisions of MARINA Circulars, rules and regulations and issuances inconsistent herewith are hereby amended, repealed or modified accordingly.

XV. TRANSITORY PROVISION

Upon effectivity  of this Circular,  the MOAs of any ROs with the Administration shall remain in force within a one-year period, after which it shall cease to exist. The Administration,  after notice shall require the ROs concerned to enter into a new MOA with MARINA.

XVI.    REVOCATION,    CANCELLATION    OR    SUSPENSION    OF ACCREDITATION

The  Administration   may,  after  giving  proper  notice  and  hearing  to  the  RO concerned, revoke, cancel or suspend the accreditation granted to the concerned ROs with regard to the statutory certification and services for violating any of the condition set forth in this Circular.

XVII.  EFFECTIVITY CLAUSE

This MARINA Circular shall take effect fifteen (15) days following its publication once in a newspaper of general circulation in the Philippines.

BY AUTHORITY OF THE BOARD:  (SGD)

FELIPE A. JUDAN
Undersecretary  for Maritime
Department of Transportation