Presidential Decree No. 1402 (PD 1402) — Charter of the Philippine National Iron and Steel Corporation
WHEREAS, the availability at all times of iron and steel
products at reasonable cost is essential for the promotion of the national
welfare, economic progress and industrialization;
WHEREAS, it is imperative for the Government to take a more
active role in the iron and steel industry in order to so assure an adequate or
increased supply at all times of such iron and steel products at reasonable
cost.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution, do hereby
create the Philippine National Iron and Steel Corporation, and further order and
decree the following, as part of the law of the land, to be the Charter of the
Philippine National Iron and Steel Corporation:
Title.
SECTION 1. Title.—This Decree shall be known as the
"Charter of the Philippine National Iron and Steel Corporation."
Declaration of Policy.
SEC. 2. Declaration of Policy.—It is hereby
declared to be the policy of the Government to promote the welfare, economic
progress and industrialization of the country through the effective development
of the iron and steel industry. Accordingly, the creation of an organized
corporate entity is necessary to assure an adequate or increased supply at all
times of iron and steel products at reasonable cost to all users for the
accelerated economic growth and industrialization of the country and the
region.
Creation, Name, Domicile and Term.
SEC. 3. Creation, Name, Domicile and Term.—To carry
out the above policy, there is hereby created a body corporate to be known as
the Philippine National Iron and Steel Corporation, hereafter referred to as the
"Corporation."
The principal office of the Corporation shall be determined by its Board of
Directors. It may also establish such offices, branches, agencies or
correspondents or other units in the Philippines or abroad as its business
operations may require.
The Corporation shall have a term of fifty years from its creation hereof,
which shall be deemed renewed for an equal period unless sooner dissolved by
law.
Purposes and Powers.
SEC. 4. Purposes and Powers.—The Corporation shall
have the following purposes and powers:
To invest in the iron and steel industry as well as in any activity related
to iron or steel operations, and to set up or form business subsidiaries under
the Corporation Law or through the acquisition of the controlling interests of
existing corporations, which may be necessary or contributory to the economic
development of the country and the region, or important in the public interest,
or deemed convenient or incidental to the carrying on of any of the purposes of
the Corporation, or which will promote the well-being of the Corporation;
To provide and maintain an adequate or increased supply at all times of iron
and steel products at reasonable cost for domestic requirements and exports;
To reduce the excessive dependence of the country and the region on imports
of iron and steel products;
To foster conditions of iron and steel production conducive to a balanced
and sustainable growth of the economy and the region.
Subject to governmental policy, the Corporation shall also have the following
purposes and powers:
To enter into contracts with any person or entity, domestic or foreign, and
with governments for the undertaking of the varied aspects of the iron or steel
industry, under such terms and conditions as it may deem proper and reasonable;
To purchase, hold, alienate, mortgage, pledge or otherwise dispose of the
stocks, bonds, and other securities or evidences of indebtedness of any other
corporation, association, firm or entity, domestic or foreign, and, while the
owner of holder thereof, to exercise all the rights and powers of ownership,
including the right to vote thereon for any purpose;
To hold lands and acquire rights over mineral lands as may be necessary to
accomplish its purposes;
Subject to existing rights, to lease or contract for unappropriated public
waters and foreshore and offshore areas, which, in the decision of the President
of the Philippines, is essential to the exercise of the purposes of the
Corporation, and the same shall be granted to the Corporation by the proper
government agency concerned under such terms and conditions as may be mutually
agreed upon between them;
To enter into any lawful arrangement for sharing profits, joint venture,
union, interests, reciprocal concession or cooperation with any person or
corporation, association, partnership, syndicate or entity located in or
organized under the laws of any authority in any part of the world in the
carrying on of any business which the Corporation is authorized to carry on, or
any business or transaction deemed necessary on of any of the purposes of the
Corporation;
To acquire assets, real or personal, or interest therein, and encumber or
otherwise dispose of the same as it may deem proper and necessary in the conduct
of its business;
To establish and maintain for its own use such communication system, whether
by radio, telegraph or any other manner, without the need of a separate
franchise therefor;
To determine its organizational structure, and the number and salaries of
its officers and employees, in accordance with existing laws, rules and
regulations;
To design, write, prepare, publish and display, in any manner,
advertisements, publicity or promotional devices of all kinds for itself or for
others which are necessary or convenient for the accomplishment of the purposes
of the Corporation;
To exercise the right of eminent domain as may be necessary for the purposes
for which the Corporation is created, subject to existing provisions of laws;
Subject to payment of the proper amount, to enter private lands for the
purpose of conducting studies in connection with its purposes, powers and
functions;
To acquire easement over public and private lands necessary for the purpose
of carrying out any work essential to its purposes, powers and functions,
subject to payment of reasonable considerations;
To adopt a code of by-laws to complement this charter;
To adopt and use a corporate seal which shall be judicially noticed; to sue
and be sued; and
To perform such corporate acts and exercise such corporate functions
authorized by the Corporation Law not inconsistent with this decree and such
other acts necessary for the attainment of the purposes and objectives herein
specified.
The preceding clauses shall be construed and interpreted as both purposes and
powers, and the matters expressed in them shall, except as otherwise expressly
provided, be in no wise limited by reference to or inference from the terms of
any other clause, but shall be regarded as independent purposes and powers, and
the enumeration of specific purposes and powers shall not be construed to limit
or restrict in any manner the meaning in general terms of the general powers of
the Corporation, nor shall the expression of one thing be deemed to exclude
another not expressed, if it be of like nature.
Subsidiaries.
SEC. 5. Subsidiaries.—The controlling interest of
the business subsidiaries of the Corporation shall, within a reasonable period
from their incorporation or the purchase of their controlling interest by the
Corporation, be transferred for value to the private sector: Provided,
That in consideration of the fact that the business subsidiaries of the
Corporation shall be transferred to or controlled by the private sector within a
reasonable period as aforementioned and that these business subsidiaries are
formed under the Corporation Law, such business subsidiaries shall not be
subject to any law, decree, executive order, circular, rule or regulation or
restriction which pertains to government-owned or controlled corporations nor
shall the said subsidiaries be subject to the Civil Service Law nor the Rules
and Regulations or the standards and salary scales prescribed by the Office of
Compensation and Position Classification; in addition, the officers and
employees of these business subsidiaries of the Corporation shall not be covered
by the Government Service Insurance System or by any law, decree, executive
order, circular, rule or regulation relating to leaves of absences, retirement
privileges, regular working hours, or any other government personnel
benefits.
Governing Body.
SEC. 6. Governing Body.—The Corporation shall be
governed by a Board of Directors, hereinafter referred to as the "Board," which
shall be composed of seven (7) members, namely, the Secretary of Industry, the
Secretary of Finance, the Secretary of National Defense, the Chairman of the
Development Bank of the Philippines, the Solicitor General, the Budget
Commissioner, or their duly authorized representatives, and the President of the
Corporation.
The President of the Corporation shall be appointed by the President of the
Philippines who shall act as such until removed or replaced by him. Other
officers and minor officials shall be appointed and their salaries fixed,
including that of the President, by the Board.
The Secretary of Industry and the President of the Corporation shall be the
Chairman and Vice-Chairman, respectively, of the Board. In the absence of the
Chairman, the Vice-Chairman shall act as presiding officer of the Board.
The members of the Board shall act as such for the duration of the term of
the Corporation.
The Board shall formulate the policies which may be necessary or incidental
to carry out the business of the Corporation or to the exercise of its express
and implied powers or for the accomplishment of any of its purposes.
All the members of the Board or their duly authorized representative, shall
receive a per diem of Five Hundred Pesos for each board meeting actually
attended by them: Provided, That such per diem shall not exceed One
Thousand Pesos during any month for each member: Provided, further,
That no other allowance or any form of compensation shall be paid them, except
actual expenses in travelling to and from their residences to attend board
meetings.
The Board shall meet as often and at such dates, times and places as may be
necessary to transact all matters as shall properly come before them and require
their action as the Board. The meetings of the Board may be called by the
President of the Corporation or by the Chairman or by five members of the Board
as and when necessary. At least five members of the Board shall constitute a
quorum and all decisions of the Board shall require the concurrence of the
majority of the quorum.
Capital Stock.
SEC. 7. Capital Stock.—The Corporation shall have a
capital stock divided into Two Hundred Million shares with a par value of P10
each to be subscribed, paid for and voted as follows:
One hundred sixty-five million eight hundred thousand shares shall be
originally subscribed and paid for by the Government of the Republic of the
Philippines.
The remaining shares of stock may be subscribed and paid for by the
Government of the Republic of the Philippines or by government financial
institutions.
The voting power pertaining to shares of stock subscribed by the Government
of the Republic of the Philippines shall be vested in the President of the
Philippines or in such person or persons as he may designate.
The voting power pertaining to shares of stock subscribed by the government
financial institutions shall be vested in them.
Powers and Duties of the President.
SEC. 8. Powers and Duties of the President.—The
President, who shall be the chief executive of the Corporation shall have the
following powers and duties:
To prepare the agenda for the meetings of the Board, and to submit for the
consideration of the Board such policies and measures as he believes necessary
to carry out the purpose and objectives of this Decree;
To execute, administer and implement the policies and measures approved by
the Board;
To direct and supervise the operations and administration of the
Corporation;
To appoint and fix the compensation for all the employees, except the
officers, of the Corporation;
To represent the Corporation in all dealings with other offices, agencies
and instrumentalities of the government and with all persons and other entities,
public or private, domestic or foreign; and
To exercise such other powers and perform such other duties provided in the
by-laws and as may be vested in him by the Board.
Legal Counsel.
SEC. 9. Legal Counsel.—The Solicitor General shall
be the ex-officio legal counsel of the Corporation and he may designate a
representative for that purpose.
Auditor.
SEC. 10. Auditor.—The Chairman of the Commission on
Audit shall appoint a representative who shall be the Auditor of the Corporation
and such personnel as may be necessary to assist said representative in the
performance of his duties. The budget of the Office of the Auditor shall be
appropriated by the Corporation, subject to the approval of the Board. Such
representative shall render a semestral report on the financial condition and
operations of the Corporation to the Chairman of the Commission on Audit and the
Board. The Chairman of the Commission on Audit shall submit to the President of
the Philippines an annual report covering the financial conditions and
operations of the Corporation. These auditing reports shall contain a statement
of the resources and liabilities including earnings and expenses, reserves and
profits, as well as losses, bad debts and such other facts which, under the
auditing rules and regulations are considered necessary to accurately describe
the financial conditions and operations of the Corporation: Provided,
That before such reports are made, the Corporation shall be given reasonable
opportunity to examine the reports and make exception to any criticisms of the
Auditor of the Corporation or the Chairman of the Commission on Audit, as the
case may be, to point out, explain or answer any inaccuracies therein, if any,
and to file a statement which shall be appended by the Auditor of the
Corporation and the Chairman of the Commission on Audit in their respective
reports.
The Auditors of the business subsidiaries of the Corporation shall be
appointed by their respective Boards of Directors.
Applicability of Civil Service Law and Other Laws.
SEC. 11. Applicability of Civil Service Law and Other
Laws.—The Corporation and its officers and employees shall be subject to
the Civil Service Law, rules and regulations, as well as to all laws, decrees,
executive orders, circulars, rules or regulations pertaining to government-owned
or controlled corporations and relating to government personnel benefits.
The provisions of the Corporation Law shall apply to the Corporation and its
business subsidiaries insofar as not inconsistent with the provisions of this
Decree.
Loans; Guarantees; Issuance of Bonds.
SEC. 12. Loans; Guarantees; Issuance of
Bonds.—Subject to the provisions of existing laws, rules and regulations,
the Corporation is hereby authorized to contract loans, credits or any
indebtedness from time to time from foreign governments, or any financial
institutions or fund sources or any other entities, foreign or domestic, on such
terms and conditions as it shall deem appropriate for the accomplishment of its
purposes and to enter into and execute agreements and other documents specifying
the said terms and conditions as well as do or perform any such acts as may be
necessary in connection therewith: Provided, That the total loans,
credits or indebtedness which the Corporation is hereby authorized to contract
shall in no case exceed the amount of One and a half billion Philippine pesos
from domestic sources and the amount of Four hundred million US Dollars, or the
equivalent in other foreign currencies, from foreign sources, outstanding at any
one time, exclusive of interests.
The Republic of the Philippines, through the President of the Philippines, or
his duly authorized representative, is empowered to guarantee, absolutely and
unconditionally, as primary obligor and not as surety merely, the payment of the
loans, credits and indebtedness contracted by the Corporation, as herein before
provided, in accordance with Republic Act Numbered Sixty-One Hundred Forty-Two,
as amended, as well as the performance of all or any of the obligations
undertaken by the Corporation pursuant to loan agreements entered into with
foreign governments or any international financial institutions or fund
sources.
The provision of any law to the contrary notwithstanding, any financial
institution owned or controlled by the Government of the Republic of the
Philippines, other than the Central Bank, the Government Service Insurance
System and the Social Security System, is hereby empowered to guarantee also
acceptance credits, loans, transactions, undertakings, or obligations of any
kind which may be incurred by the Corporation, whether directly or indirectly,
in favor of any person, association or entity, whether domestic or foreign.
The Corporation, upon the recommendation of the Secretary of Finance in
consultation with the Monetary Board and with the approval of the President of
the Philippines, is hereby empowered to issue bonds or other securities, which
the President of the Philippines may authorize to be exempt from any or all
taxes or to be guaranteed by the Government, to finance its operations.
Appropriation.
SEC. 13. Appropriation.—The sum of One Billion Six
Hundred Fifty-Eight Million Pesos (P1,658,000,000) is hereby set aside initially
and appropriated from the General Funds, not otherwise appropriated, and the
same shall be applied to the full payment of the subscription of the Government
of the Republic of the Philippines referred to in Section 7, paragraph (a), of
this Decree. Other subsequent requirements shall be contained in the Annual
Appropriation Act. Releases from this appropriation shall be in accordance with
a schedule to be determined by the Secretary of Finance, subject to the approval
of the President.
Transfer of Properties, Rights and Interests.
SEC. 14. Transfer of Properties, Rights and
Interests.—To enable the Corporation to effectively carry out its purpose
and powers under this Decree, the Development Bank of the Philippines and the
Secretary of Finance, the latter acting on behalf of the Government of the
Republic of the Philippines, are hereby directed and authorized to transfer,
assign and convey to the Corporation such properties, rights and/or interests as
may be required by the Corporation in connection therewith, under terms and
conditions to be mutually agreed upon among them.
Reports.
SEC. 15. Reports.—The Corporation shall, within
three months after the end of every fiscal year, submit its annual report to the
President of the Philippines. It shall likewise submit such periodic or other
reports as may be required of its from time to time.
Miscellaneous.
SEC. 16. Miscellaneous.—All heads of Departments,
Agencies, Offices and instrumentalities of the National Government as well as
political subdivisions are hereby enjoined to extend full cooperation and
assistance to the Corporation in the implementation of the provisions of this
Decree.
Separability Clause.
SEC. 17. Separability Clause.—Should any provision
of this Decree be held unconstitutional, no other provision hereof shall be
affected thereby.
Repealing Clause.
SEC. 18. Repealing Clause.—All laws, decrees,
executive orders, administrative orders, rules or regulations inconsistent
herewith are hereby repealed, amended or modified accordingly.
Effectivity.
SEC. 19. Effectivity.—This Decree shall take effect
immediately.
Done in the City of Manila, this 6th day of June, in the year of Our Lord,
nineteen hundred and seventy-eight.
(Sgd.) FERDINAND E. MARCOS
President of the
Philippines
By the President:
(Sgd.) JUAN C. TUVERA
Presidential Assistant
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
