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May 23, 1994

1. GENERAL

1.1 This MEMORANDUM expresses the understanding of the Government of the Republic of the Philippines (GOP) and the Government of Australia (GOA) concerning the responsibilities and contributions respectively of the two Governments in regard to the Information, Education and Communication Sub-component Project (hereafter referred to as the Project) of the Urban Health and Nutrition Project located at Metro Manila, Metro Cebu and Cagayan de Oro in the Philippines. The Project aims to improve the health and nutritional status of urban slum women, their children and families through information, education and communication activities and interventions for the women themselves, their communities, the health care providers at the primary health care level and first referral levels and their local' government officials, over a period of five years as further describe and detailed in Annex 1 to this Memorandum (Project Activities).

2. EXECUTING AUTHORITIES

2.1 The Executing Authorities for this project will be:

For the GOP :	The Department of Health (DOH); and
For the GOA :	The Australian International Development Assistance Bureau of the Department of Foreign Affairs and Trade (AIDAB).

2.2 AIDAB may engage suitably qualified contractors to undertake any part of its obligations under this Memorandum.

3. DEFINITIONS

3.1 For the purposes of this Memorandum:

(a) "Australian institutions, firms and organizations" means Australian institutions, firms and organizations engaged in the Project;

(b) "Australian Project Personnel" means Australian nationals or permanent residents or other persons who are not nationals or permanent residents of the Philippines who are working in the Philippines on an activity under this Memorandum and whose salaries or other cost are funded from the contributions of the GOA to the Activity;

(c) "dependent/dependant" means the spouse or unmarried minor children of a member of the Australian personnel or any other person recognized by the two Governments as a dependent/dependant of a member of the Australian personnel;

(d) "professional and technical material" means equipment and other goods imported by members of the Australian personnel or Australian institutions, firms and organizations for their professional use in carrying out their assigned duties under the Project and paid for from funds provided by the Government of Australia;

(e) "Australian Project supplies" means equipment, materials and other goods supplied for the execution of the Project, the cost of which are funded from the contribution of the GOA to the Project;

(f) "Australian team leader" means the designated representative in the Philippines of the consultant contracted by AIDAB on behalf of the GOA to implement the Project;

(g) "motor vehicles" means motor vehicles supplied for the execution of the Project, the cost of which is funded from the contributions of the Government of Australia to the Project;

(h) "services" means services performed by individuals or by general professional partnerships registered in the Philippines; and

(i) "personal and household effects" means equipment and other goods imported by Australian institutions, firms and organizations for the personal use of Australian personnel and their dependents/dependants while engaged in the Project.

4. MANAGEMENT

4.1 Responsibility for the Project will be vested in a Project Coordinating Committee (PCC), whose membership will be comprised of GOP and GOA appointees. The GOP will appoint the chairperson of the Committee, and will also nominate as Committee members representatives of the DOH and any other related agencies. The GOA will appoint as Committee members the Australian team leader and a representative of the Australian Embassy.

4.2 The Committee will meet not less than twice a year. Additional meetings of the PCC may be requested by the DOH or by the Australian Embassy. Its functions will include:

(a) monitoring project implementation; and

(b) advising the two Governments on Project progress, and recommending to the Governments changes in the Project components budget and future direction.

5. CONTRIBUTIONS

5.1 The contributions of the GOP and the GOA are detailed in Annexes 2 and 3 of this Memorandum and are estimated to value $A 0.324 million and $A 4.775 million respectively. The financial contribution of the GOP will be subject to its annual Congressional appropriations. Disbursement of Australian contributions will be subject to the normal Australian annual parliamentary approval of appropriations. Contributions of the World Bank are estimated at $A 332,500 and are detailed at Annex 4.

6. FACILITATION

6.1 The GOP will provide personnel and facilities necessary to enable Australian Project personnel to efficiently and economically carry out Project Activities and, without limiting the generality of this paragraph, such contribution will include:

(a) access to Department of Health facilities, documentation and personnel;

(b) provision of appropriate offices and work facilities; and

(c) all necessary approvals and authorities for carrying out Project Activities.

7. IMPLEMENTATION, MONITORING AND EVALUATION

7.1 During the first three months of the Project, the Philippine and Australian project staff will examine plans for the management of the Project and will present an Implementation Document for the approval of the two Governments. The Implementation Document will- be adopted in accordance with Article 16 of this Memorandum of Understanding, and will supersede the Design Document as the primary reference for the Project thereafter.

7.2 A progress evaluation of the Project shall be arranged and made by and between both Governments whenever convenient to them. Such an evaluation should be undertaken by a joint investigation team created by the two Governments. Members of the team should not include any of the staff involved in the Project.

8. PERSONNEL

8.1 Personnel provided by the GOA to the Project will be responsible for ensuing the effectiveness of the Project and will have an advisory and consultative role.

8.2 The Australian Team Leader will have administrative control with respect to duties, discipline, leave and other administrative issued concerning personnel funded by the GOA (including Philippine nationals employed as consultants) to achieve project objectives and subject to the laws and regulations of the Republic of the Philippines.

9. SUPPLIES AND MOTOR VEHICLES

9.1 With regard to project supplies, motor vehicles and professional and technical materials and services whether to be imported into and/or procured within the Philippines, the GOP will:

(a) be responsible for the payments of import duties, Value Added Tax (VAT) and other duties and taxes imposed in the Philippines; and be responsible for inspection fees, storage and all other levies, fees and charges;

(b) facilitate the expeditious clearance and release of imported project supplies and motor vehicles including the provision of appropriate customs and wharfage facilities in the port of entry closest to the site of the Project;

(c) ensure that Australian Project supplies will be available for the unrestricted use of the Project and will not be withdrawn from such use without the consent of the Australian Team Leader appointed by the GOA. The Australian team leader will exercise administrative control over such supplies for the duration of the Project;

(d) unless provided otherwise, provide expeditious internal transport to the site of the Project; and

(e) at completion of the Project, subject to paragraph 10 below, ensure that all Australian Project supplies will be handed over to the Philippine Executing Authority in furtherance of the objectives of the Project or other Australian-assisted projects in the health sector.

10. MOTOR VEHICLES FOR PERSONAL USE

10.1 Subject to 10.3 below, the GOP will allow the entry of one motor vehicle imported into the Philippines or purchased locally by Australian personnel for their personal use once during the project period provided that:

(a) such imported motor vehicle has been used by the person concerned in the country of his or her last posting or such motor vehicle is purchased locally or from a third country within the period of six (6) months from the date of his or her arrival in the Philippines;

(b) no transfer of ownership shall be made within a period of three (3) years from the time such motor vehicle was registered unless the member of the Australian personnel is posted to another country or his or her contract in the Philippines has expired; provided, however, that the vehicle should have been registered in the country for not less than twelve (12) months;

(c) the motor vehicle conforms with existing regulations on the allowable imported motor vehicles; and

(d) if the motor vehicle is sold or otherwise disposed of to non-exempt entities or personnel it will be subject to the normal duties and other charges at the rate in force on the date the exemption was given and on its entered value at the time of disposal.

10.2 In respect to 10.1, the GOP will expedite the clearance through customs of motor vehicles imported by Australian personnel for their personal use.

10.3 In the event of fire, theft, substantial damage or destruction, the provisions under this clause may be re-exercised at any time during the assignment of the person concerned.

11. CLAIMS RELATING TO THE PROJECT
ACTIVITIES IN THE PHILIPPINES

11.1 The GOP will release the GOA and its Australian project personnel from all actions, suits, proceedings, claims and demands whatsoever which the GOP may now have or may in future have against them or any of them in relation to loss or damage resulting from or consequent upon the Project Activities, except when suit, action, claims, proceeding or demand arises from negligence or willful misconduct on the part of the GOA project personnel; and

11.2 The GOP will indemnify and undertake at all times hereafter to keep indemnified the GOA and its Australian Project personnel against:

(a) all actions, suits, proceedings, claims and demands whatsoever which any other party may now have or may in future have against them or any of them in relation to loss or damages resulting from or consequent upon Project Activities; and

(b) any claim for contributions which any party may now have or may in future have against any of them in respect of any such actions, suits, proceedings, claims and demands.

12. TAXES ON INCOME

12.1 Fees, salaries, wages, allowances and other similar renumeration paid for by the GOA and incurred by the Australian personnel, firms and institutions and organizations derived from work performed in the Philippines under this Memorandum will only be taxed in Australia as per Article 19 of the Agreement between the GOP and the GOA for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income (1980).

13. WARRANTIES

13.1 Following testing of the equipment supplied pursuant to this Memorandum, the GOP will bear all risk associated with the installation and maintenance of the equipment, subject to any express warranties held by the GOA in relation to the supplier of this equipment. In return for this undertaking the GOA, on behalf of the GOP, will exercise any rights it may have against the supplier of such equipment should such equipment be found defective in any manner.

14. REMITTANCE OF FUNDS

14.1 The GOP will facilitate repatriation by Australian personnel, firms, institutions and organization of their funds consistent with the rights and obligations of the Philippines as a member of the International Monetary Fund.

15. LOCAL LAWS AND REGULATIONS

15.1 The Philippine Executing Authority will exert its best efforts to inform and keep advised the Australian personnel and Australian firms, institutions and organizations of local laws and regulations which may be pertinent to the performance of their duties in the Project.

16. SETTLEMENT OF DIFFERENCES

16.1 Both parties undertake to settle amicably by consultation any differences arising under or in relation to this Memorandum.

17. SECURITY

17.1 The GOP will arrange for protective services necessary to ensure the safety of the following:

(a) the person and property of Australian Project personnel and their dependants; and

(b) Australian Project supplies.

18. AMENDMENTS

18.1 Amendments to this Memorandum may be made at any time by an arrangement in writing between the two Governments.

19. DURATION

19.1 This Memorandum will take effect from the date of its signature and the Project will be deemed to have commenced from that date. The Australian contribution to the Project and all undertakings given herein will cease five years after the date of signature of this Memorandum or on such other date as may subsequently be arranged between the two Governments.

ANNEXURES to this Memorandum form an integral part of it.

SIGNED at Pasay City, Metro Manila in duplicate, this twenty-third day of May 1994.