Presidential Decree No. 1442 (PD 1442) — An Act to Promote the Exploration and Development of Geothermal Resources
WHEREAS, it is necessary for the economic and industrial
development of the country to reduce our dependence on imported energy supplies
and accelerate the development of geothermal resources which have been
identified as a viable and untapped economical source of energy;
WHEREAS, it is in the national interest to allow service
contracts for financial, technical, management or other forms of assistance with
qualified domestic and foreign entities, for the exploration, development,
exploitation, or utilization of the country's geothermal resources;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution of the
Philippines, do hereby order and decree as follows:
Exploration of and Development of Geothermal Resources by the Government.
SECTION 1. Exploration of and Development of Geothermal
Resources by the Government.—Subject to existing private rights, the
Government may directly explore for, exploit and develop geothermal resources.
It may also indirectly undertake the same under service contracts awarded
through public bidding or concluded through negotiation, with a domestic or
foreign contractor who must be technically and financially capable of
undertaking the operations required in the service contract; Provided,
that if the service contractor shall furnish the necessary services, technology
and financing, the service contractor may be paid a fee not exceeding forty per
centum (40%) of the balance of the gross value of the geothermal operations
after deducting the necessary expenses incurred in the operations; Provided,
further, that the execution of the activities and operations subject of the
service contract, including the implementation of the work program and
accounting procedures agreed upon, shall at all times be subject to direct
supervision of the Government, through the Bureau of Energy Development.
Service contracts as above authorized shall be subject to approval of the
Secretary of Energy.
Geothermal resources mean (a) all products of geothermal processes, embracing
indigenous steam, hot water and hot brines; (b) steam and other gases, hot water
and hot brines resulting from water, gas, or other fluids artificially
introduced into geothermal formations; (c) heat or other associated energy found
in geothermal formations; and (d) any by-product derived from them.
Geothermal Contract Areas.
SECTION 2. Geothermal Contract Areas.—Service
contracts, as herein authorized, may cover public lands, government geothermal
reservations, including those presently administered or unappropriated areas, as
well as areas covered by exploration permits or leases granted under Republic
Act No. 5092.
Service contracts for exploration and development of geothermal resources may
also cover private lands, or other lands subject of agricultural, mining,
petroleum or other rights or devoted to purposes other then the exploration or
use of geothermal energy; Provided, that the right to enter private
lands, and to establish easements over such lands shall, in the absence of a
voluntary agreement with the private landowner, upon application of the
contractor to the Court of First Instance of the province or the municipal court
of the municipality where the land is situated, and upon posting of the
necessary bond as may be fixed by said court, be allowed by the court subject to
payment of reasonable compensation.
Conversion of Geothermal Exploration Permits and Leases to Service Contract.
SECTION 3. Conversion of Geothermal Exploration Permits
and Leases to Service Contract.—Holders of valid and subsisting geothermal
exploration permits and geothermal leases granted by the Government prior to
January 17, 1973, pursuant to Republic Act No. 5092, shall enter into service
contracts as herein provided relative to the areas covered by their respective
permits or leases within six months from the effective date of this Decree; and,
in default thereof, the geothermal exploration permits and geothermal leases
shall be deemed automatically cancelled and the area covered thereby shall
revert back to the State.
All geothermal exploration permit application filed under Republic Act No.
5092 shall be deemed withdrawn and of no effect as of the effective date of this
Decree.
Privileges of Service Contractors.
SECTION 4. Privileges of Service Contractors.—The
provisions of any law to the contrary notwithstanding, a service contract
executed under this Act may provide that the contractor shall have the following
privileges:
Exemption from payment of tariff duties and compensating tax on the
importation of machinery and equipment, and spare parts and all materials
required for geothermal operations subject to such conditions as may be imposed
by the Director of Energy Development; Provided, that should the
contractor or its sub-contractor sell, transfer, or dispose of these machinery,
equipment, spare parts or materials without the prior consent of the Bureau of
Energy Development, it shall pay twice the amount of the taxes and duties not
paid because of the exemption granted;
Entry, upon the sole approval of the Bureau of Energy Development which
shall not be unreasonably withheld, and subject to such conditions as it may
impose, of alien technical and specialized personnel (including the immediate
members of their families), who may exercise their professions solely for the
operations of the contractor as prescribed in its contract with the Government
under this Act;
Subject to the regulations of the Central Bank, repatriation of capital
investment and remittance of earnings derived from its service contract
operations, as well as such sums as may be necessary to cover principal and
interest of foreign obligations incurred for the geothermal operations.
Other privileges provided in Section 12 of Presidential Decree No. 87 as may
be applied to the geothermal operation.
Exploitation Permits.
SECTION 5. Exploitation Permits.—In cases where
discovered geothermal resources are deemed inappropriate for service contract
arrangements in view of economic and/or technical reasons, the Bureau of Energy
Development may issue development and exploitation permits for such resources
and formulate the applicable rules and regulations to govern the same.
Rules and Regulations.
SECTION 6. Rules and Regulations.—The Director of
Energy Development shall be vested with the authority to promulgate such rules
and regulations as may be necessary to implement the provisions of this Act,
subject to approval by the Secretary of Energy.
Repealing Clause.
SECTION 7. Repealing Clause.—The provisions of
Republic Act No. 5092 and other laws, rules and regulations inconsistent with
this Decree are hereby repealed.
Effectivity.
SECTION 8. Effectivity.—This Decree shall take
effect immediately upon approval.
Done in the City of Manila, this 11th day of June, in the year of Our Lord,
nineteen hundred and seventy-eight.
(Sgd.) FERDINAND E. MARCOS
President
Republic of the Philippines
By the President:
(Sgd.) JACOBO C. CLAVE
Presidential Executive
Assistant
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
