AN ACT CREATING THE IRON AND STEEL AUTHORITY.

• Number: Presidential Decree No. 272
• Sections: 9

Preamble

WHEREAS, national interest and security require that an

adequate supply of iron and steel products at reasonable cost be readily

available at all times for the country's needs;

WHEREAS, there have been recurrent imbalances between demand

and supply of iron and steel products that necessitate the orderly regulation of

the market;

WHEREAS, excess capacity exists in several sectors of the

iron and steel industry while other sectors suffer from a deficiency of

investment;

WHEREAS, the recurrent shortage and the spiralling cost of

steel products in international markets and excessive dependence of the country

on imports for its steel supplies render it imperative to explore the backward

integration of the steel industry; and

WHEREAS, the advance of industrialization in this country is

dependent on the development and the promotion of a strong iron and steel

industry and the increased availability of low-cost steel;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the

Philippines, by virtue of the powers vested in me by the Constitution as

Commander-in-Chief of all the Armed Forces of the Philippines and pursuant to

Proclamation No. 1081, dated September 21, 1972,and General Order No. 1,dated

September 22, 1972, as amended, do hereby order and decree the creation of the

Iron and Steel Authority designed to stimulate the growth and regulate the

orderly development of the iron and steel industry, as follows:

Section 1 Composition.

SECTION 1. Composition. — The Iron and Steel

Authority shall be composed of the Chairman of the Board of Investments, as

Chairman, the Secretary of National Defense, the Secretary of Finance, the

Secretary of Trade, the Central Bank Governor, and the Chairman of the

Development Bank of the Philippines or their duly designated permanent

representatives, and two representatives from the private sector, one of whom

shall represent the primary steel manufacturers and the other to represent the

secondary manufacturers of steel products, to be appointed by the President, as

members. The secretariat of the Authority shall be provided by the

Board of Investments.

The Authority shall constitute itself immediately and shall exist for a

period of five years from the date of this Decree:

Section 2 Objectives.

SEC. 2. Objectives. — The Authority shall have the

following objectives:

a) to strengthen the iron and steel industry of the Philippines and to expand

the domestic and export markets for the products of the industry;

b) to promote the consolidation, integration and rationalization of the

industry in order to increase industry capability and viability to service the

domestic market and to compete in international markets;

c) to rationalize the marketing and distribution of steel products in order

to achieve a balance between demand and supply of iron and steel products for

the country and to ensure the industry prices and profits are at levels that

provide a fair balance between the interests of investors, consumers, suppliers,

and the public at

d) to promote full utilization of the existing capacity of the industry, to

discourage investment in excess capacity, and in coordination with appropriate

government agencies to encourage capital investment in priority areas of the

industry;

e) to assist the industry in securing adequate and low-cost supplies of raw

materials and to reduce the excessive dependence of the country on imports of

iron and steel.

Section 3 Sectors Covered.

SEC. 3. Sectors Covered. — For the purpose of

carrying out the foregoing objectives, the following sectors of iron and steel

industry shall be subject to whatever regulations the Authority may deem to

impose:

a) the import and export of iron and steel products and major raw

materials;

b) the accumulation and distribution of iron and steel scrap;

c) all forms of primary iron-and-steel-making, including blast furnace/basic

oxygen furnace operations, electric are furnace and open hearth operations and

direct reduction processing;

d) with respect to capacity installation only, of foundries for all types of

iron and steel; steel fabrication and welding operations; steel forming

operations; steel forging and die-stamping or pressing operations, machining and

metal-cutting of iron and steel products;

e) the manufacture and supply of fluxes, additions and alloying elements used

in iron-and-steel-making, such as ferro alloys, welding electrodes;

f) all rolling mill operations for steel products, including hot and cold

reduction mills, blooming and bar mills, and structural mills;

g) finishing operations for steel products such as galvanizing, tinning, and

drawing, pipe-and-tube-forming, slitting and shearing, cold forming;

h) all marketing and distribution operations of the above

sectors.

Section 4 Powers and Functions.

SEC. 4. Powers and Functions. — The Authority shall

have the following powers and functions:

a) to require firms to obtain its approval before entering into any

commitments to expand, modernize and/or modify facilities for iron and steel

making and/or processing when the expenditures involved may exceed P1 million

and in coordination with appropriate government agencies to require firms within

the industry to register commitments which would involve foreign currency

expenditures of more than $50,000;

b) to make recommendations on import and export limitations, tariffs, taxes,

subsidies or anti-dumping measures affecting the industry;

c) under conditions of acute market shortage or surplus of steel products,

plan the establishment and enforcement of sales quotas, distribution areas and

such other marketing regulations as it may deem necessary 1) to reestablish a

balance between demand and supply on the domestic or export markets; 2) to

allocate demand in an equitable, orderly and efficient manner among the firms

servicing the market; and 3) to maintain stability until such time as the market

imbalance is corrected;

d) to assist in the setting up of marketing outlets for steel products and

other related construction materials;

e) whenever price adjustments for raw materials or products of iron and steel

cause undue hardships or disagreements among sectors of the industry, their

consumers or Suppliers, to call together representatives of the affected parties

and government agencies concerned in order to arrive at a satisfactory

consensus; if it deems so necessary, to establish fair and reasonable selling

prices at different levels of distribution and to call on the appropriate

government agencies for assistance in enforcing the established prices;

f) to require the firms in the industry to conform to established standards,

including standards on weights and measures, product quality control, and

pollution control;

g) to require any firm in the industry to secure its approval before

acquiring or negotiating a loan or a guarantee from a government financial

institution, the Philippine Government or any of its agencies;

h) to recommend to the appropriate authorities such policies and measures as

may be necessary to stimulate the expansion of the market for the industry;

i) to negotiate, and when necessary, to enter into contracts for and in

behalf of the Government, for the bulk purchase of materials, supplies or

services for any sectors in the industry, and to maintain inventories of such

materials in order to insure a continuous and adequate supply thereof and

thereby reduce operating costs of such sector;

j) to initiate expropriation of land required for basic iron and steel

facilities for subsequent resale and/or lease to the companies involved if it is

shown that such use of the State's power is necessary to implement the

construction of capacity which is needed for the attainment of the objectives of

the Authority;

k) to plan, organize, implement and control the backward integration of the

steel industry;

l) to organize and implement programs for manpower development to benefit the

industry, in coordination with the appropriate government agencies, public or

private educational institutions, and private firms;

m) to negotiate with its counterparts in other ASEAN countries for the

rationalization, complementation and integration of the iron and steel industry

in the region;

n) to organize and/or implement programs in coordination with appropriate

government agencies for the surveying, exploration and development of iron ore,

coal and other deposits that are utilized as raw materials for the industry; to

negotiate with sources from other countries to secure for the industry adequate,

high-grade, and long-term supplies of such materials at the lowest cost and most

advantageous terms possible;

o) to promote product development, new uses and new applications for iron and

steel products; to arrange for financial and technical support for product

research and commercial development of iron and steel products undertaken by

firms in the industry and other entities;

p) to inspect inventories of firms in the industry and, during periods of

market shortage, to regulate or confiscate inventories in order to alleviate the

shortage;

q) whenever necessary to achieve its objectives and to carry out its

functions, to require firms in the industry to submit data on costs, sales,

production, deliveries

and inventories;

r) to conduct studies on the status and problems of the industry and to

maintain comprehensive statistical records and for this purpose, to require any

person or entity to submit to it such data, information, papers or document it

may deem necessary;

s) to prescribe and enforce compliance with such rules and regulations as may

be necessary to implement the intent and provisions of the Decree, which rules

and regulations shall take effect immediately following their publication in two

newspapers of general circulation in the Philippines;

t) to conduct investigation, hearing and inquiry and for this purpose, to

issue subpoena and subpoena duces tecum to compel the attendance of witnesses

and

the production of the necessary papers and documents;

u) to perform such other acts as may be necessary or conducive to the

exercise of its functions and powers and the discharge of its duties under this

Decree.

Section 5 Power to require assistance.

SEC. 5. Power to require assistance.—The Authority

may require the assistance of any government agency or any entity or association

within the industry in order to ensure the effective implementation of the

powers and functions of the Authority.

Section 6 Affected Parties.

SEC. 6. Affected Parties. — A party adversely

affected by a decision or any order of the Authority may, within a period of

seven days from receipt of said decision or order, appeal in writing to the

National Economic and Development Authority which shall have authority and

jurisdiction to review, reverse, modify or amend the same. The decision of the

National Economic and Development Authority shall be appealable to the President

in writing within a period of five days from receipt of the said decision or

order. The decision of the President shall be final.

Section 7 Penal Clause.

SEC. 7. Penal Clause. — Any person who wilfully

gives false or misleading data or information or conceals or falsifies any

material fact in any investigation, hearing, inquiry or study conducted pursuant

to this Decree or commit any violation of the provisions of this Decree shall be

punished by a fine not to exceed fifty thousand pesos (P50,000.00) or

imprisonment for not more than five (5) years or both, at the discretion of the

court: Provided, however, Where such violation is committed by a

corporation, partnership or other juridical entity, the penalty

provided herein shall be imposed on the responsible officers or

directors of such entity: Provided, further, That if the false or

misleading data or information shall have been given under oath, the maximum

penalty for false testimony under the Revised Penal Code shall be imposed.

Section 8 Repealing Clause.

SEC. 8. Repealing Clause. — Any provision of law,

decrees, or executive orders, instructions, rules, regulations or circulars

inconsistent with this Decree is hereby repealed or modified accordingly:

Provided, That, all the powers and functions of the Presidential Steel

Committee are hereby transferred to the Authority.

This Decree shall take effect immediately after its publication.

Done in the City of Manila, this 9th day of August, in the year of Our Lord,

nineteen hundred and seventy-three.

(Sgd.) FERDINAND E. MARCOS

President

Republic of the Philippines

By the President:

(Sgd.) ROBERTO V. REYES

Assistant Executive Secretary