PROVIDING FOR THE REORGANIZATION OF MARITIME FUNCTIONS IN THE PHILIPPINES, CREATING THE MARITIME INDUSTRY AUTHORITY, AND FOR OTHER PURPOSES.

• Number: Presidential Decree No. 474
• Sections: 20

Preamble

WHEREAS, the efficient sea transport of raw materials,

products, commodities and people is vital to the growth of the

Philippine economy;

WHEREAS, the functions pertaining to the development and

regulation of shipping enterprises are fragmented among various

government agencies, resulting in inadequate and inefficient shipping

facilities, dependence on external shipping interests, maldistribution

of commodities, and piece-meal solutions;

WHEREAS, there is imperative need to modernize and expand

the Philippine merchant fleet, and to rationalize and improve their

operations in order to make them effective instruments in promoting

domestic production, inter-island and overseas trade, price

stabilization, and employment generation;

WHEREAS, it is urgently necessary to provide a strong

organizational framework to effect the accelerated and integrated

development and effective regulation of shipping enterprises;

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

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

in order to effect the desired changes and reforms in the social,

economic and political structure of our society, do hereby decree and

order that the following be adopted and made part of the laws of the

land:

Section 1 Title.

SECTION 1 Title.—This Decree shall be known as the

Maritime Industry Decree of 1974.

Section 3 Definition of Terms.

SEC. 3. Definition of Terms.—The terms, as

used, in this Decree, shall have the following meaning, unless the

context of the particular usage of the term indicates otherwise:

"Maritime Industry", briefly referred to as "industry" in

the broadest concept of the term.—All enterprises engaged in

the business of designing, constructing, manufacturing, acquiring,

operating, supplying, repairing and, or maintaining vessels, or

component parts thereof; of managing and/or operating shipping lines,

stevedoring arrastre and customs brokerage services, shipyards,

drydocks, marine railways, marine repair shops, shipping and freight

forwarding agencies and similar enterprises.

"Vessels" or watercraft".—Any barge, lighter, bulk

carrier, passenger ship, freighter, tanker, container ship, fishing

boats or other artificial contrivance utilizing any source of motive

power, designed, used or capable of being used as a means of water

transportation operating either as a common contract carrier, including

fishing vessels covered under Presidential Decree No. 43, except (i)

those owned and/or operated by the Armed Forces of the Philippines and

by foreign governments for military purposes, and (ii) bancas, sailboats

and other waterborne contrivance of less than three gross tons capacity

and not motorized.

"Philippine national".—A citizen of the Philippines; or a

partnership or association wholly owned by and composed of citizens of

the Philippines; or a corporation organized under the laws of the

Philippines of which at least sixty per cent of the capital stock

outstanding and entitled to vote is owned and held by Philippine

citizens; or a trustee of funds for pensions or other employee

retirement or separation benefits, where the trustee is a Philippine

national and at least sixty per cent of the funds will accrue to the

benefit of the Philippine nationals: Provided, That where a

corporation and its non-Filipino stockholders own stock in an

enterprise, at least sixty per cent of the members of the governing

board of both corporations must be Philippine nationals.

"Philippine flag vessel".—A vessel or

watercraft registered under Philippine laws.

"Foreign flag vessel."—A vessel or watercraft registered

under the laws of a country other than the Philippines.

"Philippine shipping companies."—Philippine nationals

registered and licensed under the laws of the Philippines to engage in

the business of overseas and/or domestic water transportation.

A. MARITIME INDUSTRY AUTHORITY

Section 4 Maritime Industry Authority, Creation and Organization.

SEC. 4. Maritime Industry Authority, Creation and

Organization.—There is hereby created a Maritime Industry Authority,

hereinafter referred to as the "Authority", under the Office of the

President. It shall be composed of a governing board of directors to be

known as Maritime Industry Board and the Management.

The

Authority shall have general jurisdiction and control over all persons,

corporations, firms or entities in the maritime industry of the

Philippines and shall supervise, regulate in accordance with this

Decree.

The principal office of the Authority shall be in the

Greater Manila Area. Regional or branch offices may be established at

such other place or places within the Philippines as may be deemed

necessary by the Board.

Section 5 Maritime Industry Development Program.

SEC. 5. Maritime Industry

Development Program.—The Authority shall prepare and annually update

a Ten-Year Maritime Industry Development Program, hereinafter referred

to as "Program" which shall contain a rational and integrated

development of the maritime industry. The Authority shall submit the

same for approval by the President of the Philippines.

Upon

approval of the Program by the President, all government departments,

bureaus, agencies, and instrumentalities shall implement the same within

their respective jurisdictions. The Authority shall ensure that the

approved program is being effectively implemented by the participating

agencies. No government body or instrumentality shall adopt any policy

or take course of action contrary to or inconsistent with the Program.

B. MARITIME INDUSTRY BOARD

Section 6 Powers and Functions of the Board.

SEC. 6. Powers and Functions of the Board.—The

Maritime Industry Board shall have the following powers, functions, and

duties, among others:

To provide comprehensive policy guidance for the

promotion and development of the maritime industry as provided for in

this Decree;

To promulgate and prescribe such promotional and developmental

rules and regulations, standards, guidelines and procedures and

recommend laws or measures as may be necessary for the growth and

effective regulation of shipping enterprises;

To formulate a comprehensive and practicable Maritime Industry

Development Program for a ten-year period and review and update the

same annually;

To prescribe specific policies in the determination of just

and reasonable passenger fares, freight rates and other

charges relative to the operation of inter-island vessels.

Accordingly, the Board of Transportation shall exercise its rate fixing

functions in accordance with such policies;

To recommend to the President that the State,

through such agency or agencies as the President may designate,

purchase, lease, manage, operate or requisition any vessel, ship

or shipping enterprise, for national security purposes, to meet

emergency situations or when the national interest so requires;

To approve contracts;

To approve the organizational structure, staffing pattern, and

budget of the Authority upon the recommendation of the Administrator;

To appoint, discipline and remove, and determine the

composition of the Authority technical staff and other personnel: Provided,

That all regular professional and technical personnel in the Authority

shall be permanent and career in status, but exempt from WAPCO and Civil

Service rules and regulations: Provided, further, That the

personnel shall be entitled to the benefits normally accorded to

government employees, such as retirement, GSIS insurance, leave and

similar matters: Provided, furthermore, That the appointments of

personnel in the management below the rank of section chief shall be

made by the Administrator, in accordance with the approved budget and

staffing pattern and shall be noted by the Board: Provided, finally,

That the Board or the Administrator may engage on contractual basis or

other arrangements for the temporary services, and fix the compensation

of highly qualified professionals, experts technical advisers or

consulting firms;

To adopt a common seal for the Authority which shall be

juridically noticed, determine the exact location of its office, and

prescribe the rules and regulations to govern its proceedings;

To recommend to the President, through the National Economic

and Development Authority, the grant of necessary incentives for the

development of shipping and other related maritime enterprises; and

To perform such acts as are proper and necessary to implement

this Decree.

Section 7 Composition and Organization.

SEC. 7. Composition and Organization.—The Board

shall be composed of eight members as follows: The Secretary of Trade,

the Secretary of Public Works, Transportation and Communications, the

Secretary of National Defense, the Executive Secretary, the Chairman of

the Board of Investments, the Chairman of the Development Bank of the

Philippines, the Chairman of the Board of Transportation and the

Maritime Administrator. The Chairman of the Board shall be appointed by

the President of the Philippines from among its members.

The

official next in rank to the regular members shall serve as permanent

alternate members, except that, in the absence of the Chairman, the

Board shall elect a temporary presiding officer. The alternate members

shall attend meetings of the Board and committees assigned to their

principals and receive the corresponding per diems whenever their

principal is absent or the said position is vacant.

The Board

shall meet regularly once a month and may hold special meetings to

consider urgent matters upon call of the Chairman or any three members

thereof. A majority shall constitute a quorum for the transaction of

business.

Each members shall receive a monthly commutable

allowance of five hundred pesos and per diem of one hundred for every

meeting of the Board or committee thereof actually attended: Provided,

That the total amount of per diems which each may receive shall not

exceed five hundred pesos a month.

C. MANAGEMENT

Section 8 Management Head.

SEC. 8. Management Head.—The management of the

Authority shall be vested in the Maritime Administrator who shall be

directly assisted by the Deputy Administrator for Planning and a Deputy

Administrator for Operations hereinafter referred to as "Deputy

Administrators."

Section 9 The Maritime Administrator and Deputy Administrator.

SEC. 9. The Maritime Administrator and Deputy

Administrator.—The Maritime Administrator and Deputy Administrators

shall be appointed by the President for a term of six years:

Provided, That upon the expiration of their respective terms, they

shall continue to serve until their successor shall have been appointed

and qualified: Provided, further, That no vacancy shall be filled

except for the unexpired portion of the term: Provided, finally,

That the President may remove the Administrator and Deputy

Administrators from office for cause upon recommendation of the Board.

The Maritime Administrator and Deputy Administrators shall be citizens

of the Philippines, at least thirty-five years old on the date of their

appointment, of good moral character, or recognized executive ability

and competence in previous public or private employment, with adequate

training and experience in economic, technology, finance, law,

management, public utility, or in other phases or aspects of the

maritime industry. Until otherwise fixed by the Board, the Administrator

shall receive an annual salary of fifty thousand pesos and a monthly

commutable allowance of two thousand pesos. Each Deputy Administrator

shall receive an annual salary of forty thousand pesos and a monthly

allowance of one thousand five hundred pesos.

The Administrator

shall be directly responsible to the Board, and shall have powers,

functions and duties as provided in this Decree. The Deputy

Administrator shall be directly responsible to the Administrator, and

their respective powers, functions and duties shall be determined by the

Board, upon recommendation of the Administrator.

Section 10

SEC. 10.

Authority to Administer Oath.—The Chairman of the Board, the

Administrator, the Deputy Administrators, the- Chief Legal Officer and

heads of divisions of the Authority shall have the power to administer

oaths for the transaction of official business.

Section 11 General Powers and Functions of the Administrator.

SEC. 11. General Powers and Functions of the

Administrator.—Subject to the general supervision and control of the

Board, the Administrator shall have the following general powers,

functions and duties:

To implement, enforce and apply the policies, programs,

standards, guidelines, procedures, decisions and rules and regulations

issued, prescribed or adopted by the Board pursuant to this Decree;

To undertake researches, studies, investigations and other

activities and projects, on his own initiative or upon instructions of

the Board, and to submit comprehensive reports and appropriate

recommendations to the Board for its information and action;

To undertake studies to determine present and future

requirements for port development including navigational aids, and

improvement of waterways and navigable waters in consultation with

appropriate agencies;

To pursue continuing research and developmental

programs on expansion and modernization of the merchant fleet and

supporting facilities taking into consideration the needs of the

domestic trade and the need of regional economic cooperation schemes;

and

To manage the affairs of the Authority subject to the

provisions of this Decree and applicable laws, orders, rules and

regulations of other appropriate government entities.

Section 12 Specific Powers and Functions of the Administrator.

SEC. 12. Specific Powers and Functions of the

Administrator.—In addition to his general powers and functions, the

Administrator shall:

Issue Certificate of Philippine Registry for all vessels being

used in Philippine waters, including fishing vessels covered by

Presidential Decree No. 43 except transient civilian vessels of foreign

registry, vessels owned and/or operated by the Armed Forces of the

Philippines or by foreign governments for military purposes, and bancas,

sailboats and other watercraft which are not motorized, of less than

three gross tons;

Provide a system of assisting various officers,

professionals, technicians, skilled workers and seamen to be gainfully

employed in shipping enterprises, priority being given to domestic

needs;

In collaboration and coordination with the Department of

Labor, to look into, and promote improvements in the working conditions

and terms of employment of the officers and crew of vessels of

Philippine registry, and of such officers and crew members who are

Philippine citizens and employed by foreign flag vessels, as well as of

personnel of other shipping enterprises, and to assist in the settlement

of disputes between the shipowners and ship operators and such officers

and crew members, and between the owner or manager of other

shipping enterprises and their personnel;

To require any public water transport utility or

Philippine flag vessels to provide shipping services to any coastal

areas in the country where such services are necessary for the

development of the area, to meet emergency sealift requirements, or when

public interest so requires;

Investigate by itself or with the assistance of other

appropriate government agencies or officials, or experts from the

private sector, any matter within its jurisdiction, except marine

casualties or accidents which shall be undertaken by the Philippine

Coast Guard;

Impose, fix, collect and receive in accordance with the

schedules approved by the Board, from any shipping enterprise or other

persons concerned, such fees and other charges for the payment of its

services;

Inspect, at least annually, the facilities of port and cargo

operators and recommend measures for adherence to prescribed standards

of safety, quality and operations;

Approve the sale, lease or transfer of management of vessels

owned by Philippine Nationals to foreign owned or controlled

enterprises;

Prescribe and enforce rules and regulations for the prevention

of marine pollution in bays, harbors and other navigable waters of the

Philippines, in coordination with the government authorities concerned;

Established and maintain, in coordination with the appropriate

government offices and agencies, a system of regularly and promptly

producing, collating, analyzing and disseminating traffic flows, port

operations, marine insurance services and other information on maritime

matters;

Recommend such measures as may be necessary for the regulation

of the importation into and exportation from the Philippines of vessels,

their equipment and spare parts;

Implement the rules and regulations issued by the Board of

Transportation;

Compile and codify all maritime laws, orders, rules and

regulations, decisions in leasing cases of courts and the Authority's

procedures and other requirements relative to shipping and other

shipping enterprises, make them available to the public, and, whenever

practicable to publish such materials;

Delegate his powers in writing to either of the Deputy

Administrators or any other ranking officials of the Authority: Provided,

That he informs the Board of such delegation promptly; and

Perform such other duties as the Board may assign, and such

acts as may be necessary and proper to implement this Decree.

Section 13 Maritime Industry Manpower Needs.

SEC. 13. Maritime Industry Manpower Needs.—The

Authority shall establish and support a system of maintaining and

developing a reservoir of trained manpower to meet the current and

future needs of the industry. For the attainment of this objective, it

shall undertake the following:

Evaluate, in collaboration with the Department of Education and

Culture, the capability of maritime educational and training

institutions and programs in the Philippines, including the Philippine

Merchant Marine Academy, herein placed under the administrative

supervision of the Authority, to supply shipping and shipyard manpower

needs.

Inspect and evaluate periodically the standards,

facilities and performance of the maritime educational and training

programs of government and private schools and enterprises and recommend

to the Department of Education and Culture and other

appropriate government agencies such changes in the curriculum as may

be necessary.

Conduct or arrange for the holding of pre-employment,

on-the-job and other training programs to provide and upgrade shipping

skills and techniques, with the cooperation and support of private

enterprises and government agencies.

Provide incentives for education and training in shipping and

shipbuilding fields, especially those which are not attractive to

students such as naval architecture, including scholarships and

fellowships, in the Philippines or abroad, with liberal grants for the

entire duration of the course, to be sponsored directly or arranged by

the Administration.

Section 14 Penalties.

SEC. 14. Penalties.—Any person who gives false or

misleading data or information wilfully or through gross negligence,

conceals or falsifies a material fact, in any investigation, inquiry or

hearing, or other proceedings held pursuant to this Decree, shall be

punished with imprisonment of not less than two nor more than six months

and with a fine of not less than five hundred nor more than one

thousand pesos: Provided, however, That if the false or

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

maximum penalty for giving false testimony or perjury shall be imposed.

D. MISCELLANEOUS PROVISIONS

Section 15 Auditor.

SEC. 15. Auditor.—The Commission on Audit shall

be the ex-officio Auditor of the Authority and it shall appoint its

representative therein, who shall audit all accounts thereof.

Section 16 Reorganizational Changes.

SEC. 16. Reorganizational Changes.—

Department of Trade.—The Shipping and Freight

Study Unit of the Department of Trade is hereby transferred to the

Authority together with its applicable appropriations, records,

equipment, property and such personal as may be necessary.

Bureau of Transportation.—The powers and functions

pertaining to the development and supervision of maritime shipping of

the Bureau of Transportation for Water are hereby transferred to

the Authority. Accordingly the Water Transportation Division of the

Bureau is hereby abolished.

National Development Company.—The powers and

functions of the National Development Company relative to ship

acquisition under Republic Act No. 1407, as amended, (Philippine

Overseas Act of 1955) are hereby transferred to the Authority

together with its applicable records, equipment and property.

In addition to the powers and functions herein transferred,

balances of all appropriations, funds, accounts and notes receivable

derived from shipping companies, equipment, records and supplies are

likewise transferred to the Authority.

Section 17 Retention of the Functions and Powers of the Philippine Coast Guard.

SEC. 17. Retention

of the Functions and Powers of the Philippine Coast Guard.—Nothing

in this Decree shall be constructed to affect or delimit the present

functions and powers of the Philippine Coast Guard relative to maritime

affairs. All such functions and powers of the Philippine Coast Guard are

retained by it. Furthermore in the performance of its functions,

especially in the classification and inspection of vessels, the

Philippine Coast Guard will be assisted by the Authority: Provided,

That within two years from the issuance of this Decree, the President

may transfer to the Authority such regulatory functions of the

Philippine Coast Guard pertaining to maritime affairs as may be

necessary for the achievement of the aims and purposes of the Authority.

The Authority shall coordinate with the Philippine Coast Guard in the

exercise of supervision and regulation of the operations of water

transport utilities.

Section 18 Coordination with Other Agencies.

SEC. 18. Coordination with Other Agencies.—The

Authority shall coordinate with the Department of Labor, the Department

of Education and Culture and the National Manpower and Youth Council in

the exercise of its pertinent functions that have relation to the

functions of the above-mentioned agencies, particularly as these pertain

to the development of trained and qualified seamen for Philippine

vessels.

In order to strengthen its coordinative functions, the

Authority shall hire and train appropriate technical personnel which may

be assigned to other government agencies involved in the implementation

of laws, rules and regulations relative to maritime affairs.

SEC.

19. Transitory Provision.—Officials and employees of all

existing offices or agencies which are abolished or reorganized under

this Decree may be absorbed into the Authority on the basis of merit and

fitness: Provided, That employees who shall be laid off by

reason of this Decree shall be given gratuity equivalent to one month's

salary for every year of service but in no case more than twenty-four

months salary, in addition to all benefits to which they are entitled

under existing laws and regulations.

To carry out the provisions

of this Section there is hereby appropriated the sum of Five-Hundred

Thousand Pesos out of the unappropriated funds in the National Treasury.

Section 20 Appropriations.

SEC. 20. Appropriations.—To carry out the provisions of

this Decree, there is hereby appropriated the sum of two million pesos

out of the funds in the National Treasury not otherwise appropriated.

Thereafter, the succeeding appropriations of the Authority shall be

included in the Annual Appropriations Act.

In addition to the

above, the Authority is hereby authorized to retain fifty per cent of

its collections from fees, charges and fines to defray any deficiency in

annual appropriations and to finance its other projects.

SEC.

21. Repealing and Separability Clauses.—All laws, decrees,

orders, rules and regulations, policies, programs or parts thereof,

which are inconsistent with any of the provisions of this Decree, are

hereby repealed or modified accordingly.

If for any reason any

section or provision of this Decree is declared to be unconstitutional

or invalid, the other sections or provisions hereof, which are not

affected thereby, shall continue in full force and effect.

SEC.

22. Effectivity.—This Decree shall take effect upon its

promulgation: Provided, That these portions hereof which may

require a transition period to assure the orderly transfer of powers and

functions shall take effect as stated in the implementing details: Provided,

further, That such implementing details shall be prepared by the

Board, in consultation with the government agency heads concerned, and

submitted to the President for approval within four months after

issuance of this Decree.

Done in the City of Manila, this 1st day

of June, in the year of Our Lord, nineteen hundred and seventy-four.

(Sgd.)

FERDINAND E. MARCOS

President of the Philippines

By the President:

(Sgd.)

ALEJANDRO MELCHOR

Executive Secretary

Section 1 Declaration of Policies and Objectives.

SEC. 1. Declaration of Policies and Objectives.—It is

hereby declared the policy of the State to accelerate the Integrated

development of the maritime industry of the Philippines to attain the

following objectives: (a) To increase production and productivity in the

various islands and regions of the archipelago through the provision of

effective sea linkage; (b) To provide for the economical, safe,

adequate and efficient shipment of raw materials, products, commodities

and people; (c) To enhance the competitive position of Philippine flag

vessel in the carriage of foreign trade; (d) To strengthen the balance

of payments position by minimizing the outflow of foreign exchange and

increasing dollar earnings; (e) To generate new and more job

opportunities.

For the attainment of these objectives, the Government through the

Maritime Industry Authority hereinafter created shall:

Adopt and implement a practicable and coordinated Maritime

Industry Development Program which shall include, among others, the

early replacement of obsolescent and uneconomic vessels; modernization

and expansion of the Philippine merchant fleet, enhancement of

domestic capability for shipbuilding, repair and maintenance; and the

development of reservoir of trained manpower;

Provide and help provide the necessary; (i) financial

assistance to the industry through public and private financing

institutions and instrumentalities; (ii) technological assistance;

and (iii) in general, a favorable climate for expansion of domestic

and foreign investments in shipping enterprises; and

Provide for the effective supervision, regulation and

rationalization of the organizational management, ownership and

operations of all water transport utilities, and other maritime

enterprises.