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Date Filed: 10 July 2018

The  NATIONAL  WATER  RESOURCES  BOARD  (“the  Board”),  a government  institution,  created  and  existing  under  Philippines,  with  office address at 8th Floor, NIA Building, EDSA, Quezon City, states:

WHEREAS,  Article  13  of  the  Water  Code  of  the  Philippines states that “Except otherwise herein provided, no person, including government instrumentalities or government-owned or controlled corporations, shall appropriate water without a water right, which shall be evidenced by a document known as a water permit”.

WHEREAS, Article 29 states that “Water permit may be revoked after due notice and hearing on grounds of non-use; gross violations of conditions imposed in the permit; unauthorized sale of water; willful failure or refusal to comply with rules and regulations or any lawful order; pollution, public nuisance or acts detrimental to public health and safety; when the appropriator is found to be disqualified under the law to exploit and develop natural resources of the Philippines; when, in case of irrigation, the land is converted to non-agricultural purposes; and other similar grounds;

WHEREAS, Section 15 of the Implementing Rules and Regulations (IRR) of the Water Code, Letter (h) states that “Non-use of the water for the purpose stipulated in the permit for a period of three (3) consecutive years from date of said permit null and void, except as the Board may otherwise allow for reasons beyond the control of the permittee.”

WHEREAS, monitoring conducted by the Monitoring and Enforcement Division personnel on compliance by permittees to water permit conditions revealed that the volume of water granted to some Water Permittees is not being utilized due to unforeseen circumstances and interventions;

NOW, THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, to approve the following policy guidelines on the cancellation of water permits due to non-use:

1.    All water permits shall be cancelled based on the following grounds:

a.   Water permit grantees that are found to be non-compliant on the ground of non-use for a period of three consecutive years from the date of issuance of the water permit;

b.   Water permit grantees that are found to be non-compliant on the ground of non-use for a period of three consecutive years from the date of completion of the diversion works and necessary structures;

c.   Water permit grantees that have unfinished and abandoned construction of diversion works and necessary structures;

d.  Water permit grantees that are found to be non-compliant with the conditions stipulated in the water permit based on the findings of the Monitoring and Enforcement Division (MED) staff;

2.    A Show Cause Order shall be issued to the said permit grantees directing the  submission  of  a  written  explanation  and  show  cause  why  no  legal sanction should be imposed for the violation;

3.    The MED shall evaluate and validate the submitted reply of the Water Permit Holder on the Show Cause Order issued by NWRB. If the explanation is found to be justified/acceptable, Cease and Desist Order (CDO) shall not be issued and the water permit shall not be cancelled. Otherwise, a CDO shall be issued and the said water permit shall be cancelled accordingly;

4.    Exceptions  to  the  cancellation  of  the  water  permit  shall  be  under  the following circumstances:

a.  When the delay in the construction of the structures is caused by force majeure such as major earthquake, extreme flooding and volcanic eruption.

b.   When the completion of the project is suspended because of geopolitical issues such as armed conflicts and terrorism which have significant impacts on the project and other unforeseen events;

c.   When the reason for non-use is due to the following: TECHNICAL

i.    On-going feasibility study. The water permit holder shall be given a one-year extension to complete the study. Another extension may only be allowed based on the recommendation of the NWRB technical staff;
ii.    Long duration to complete the project. The water permit holder shall be given a one-year extension to complete the necessary diversion works and other structures. Another extension may only be allowed based on the recommendation of the NWRB technical staff.

LEGAL

When there are legal cases or litigation in court which last for more than three (3) years such as the following:

i.    Legal impediments such as right of way acquisition;
ii.    Pending cancellation cases filed against the water permit holder;
iii.    In cases where the permit holder is a bulk water supplier, i.e. the bid was awarded to the permit holder but the contract was awarded to another bidder that resulted to the filing of case against the proponent.

INSTITUTIONAL

i.    Issues  on  securing  other  government  (national/local)  permits, certificates and clearances
ii.    Political/civic interventions

FINANCIAL

i.    When the investors withdrew from the project after the issuance of the water permit

However, the abovementioned reasons shall only be allowed for a certain period of time on a case to case basis or as determined by the NWRB office.

RESOLVE  FURTHER, that  when  a  water  permit  is  cancelled  upon  the request of the permittee, said permittee will not be allowed to re-apply for the same diversion point for a period of one year, and six (6) months if applying for other diversion point/s.

However, if the permit is cancelled due to non-use after three (3) years from approval, the former permittee will not be allowed to re-apply for the same diversion point for a period of five (5) years and one (1) year, if applying for other diversion point/s.

In addition, in case the former permittee associated with another individual/company and formed a partnership/company wherein the former permittee owns 50% or more of the stocks, the foregoing conditions will still apply. However, if the share of the former permittee is less than 50%, it shall be treated as a new application.

IN WITNESS WHEREOF, we have hereunto set our hands this 24th  day of
January 2018 in Quezon City, Philippines.

(SGD) SEC. ROY A. CIMATU (DENR) Chairman		SEC. ERNESTO M. PERNIA (NEDA) Rep: DDG Rolando G. Tungpalan Vice-Chairman
Members:
(SGD) SEC. VITALIANO N. AGUIRRE II (DOJ) Rep: Asst. Chief State Counsel Ruben F. Fondevilla		(SGD) SEC. FORTUNATO T. DE LA PEÑA (DOST) Rep: Engr. Eduardo V. Manalili