ANNEX a Forest Land Use Management Agreements
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Terminal Report Simplified and Harmonized Forestry Regulatory Procedures With funding support from The EcoGovernance Program-USAID (Subcontract No. 4105-506-03P-03) ANNEX A Forest Land Use Management Agreements FORESTRY DEVELOPMENT CENTER College of Forestry and Natural Resources University of the Philippines Los Baños (Through the University of the Philippines Los Baños Foundation, Inc.) College, Laguna 4031 Philippines April 2004 Table of Contents Page ANNEX A – FOREST LAND USE MANAGEMENT AGREEMENTS ANNEX A.1 – Analysis of the Regulatory Procedures on Integrated Forest A.1-1 Management Agreement (IFMA) 1.0 Overview A.1-1 1.1 Enabling Policy A.1-2 1.2 Brief History of IFMA Policies A.1-2 2.0 Existing and Potential IFMA A.1-4 3.0 Analysis of IFMA Regulatory Procedures A.1-6 3.1 Identification and approval of potential IFMA areas and preparation of A.1-7 forest land use plans 3.2 Qualification requirements A.1-13 3.3 Application requirements A.1-14 3.4 Processing and approval of IFMA A.1-16 3.5 Responsibilities of IFMA holders A.1-20 3.6 Responsibilities of DENR A.1-24 3.7 Benefits of IFMA holders; sanctions and penalties A.1-26 3.8 Government share A.1-28 4.0 Summary and Recommendations A.1-29 REFERENCES A.1-30 Appendix Table 1 A.1-32 ANNEX A.2 – Analysis, Simplification and Harmonization of Socialized Industrial A.2-1 Forest Management Agreement (SIFMA) Regulatory Procedures 1.0 Policy Basis of SIFMA A.2-1 2.0 Existing SIFMA and Potential SIFMA Areas A.2-1 2.1 Number and area of existing SIFMAs A.2-1 2.2 Potential SIFMA areas A.2-2 3.0 Analysis of Existing SIFMA Regulatory Procedures, Issues and Proposed / A.2-4 Recommended Simplification and Harmonization 3.1 Identification and approval of potential SIFMA areas A.2-4 3.2 Qualification requirements of SIFMA applicants A.2-7 3.3 Application requirements A.2-10 3.4 Processing and approval of SIFMA A.2-11 3.5 Benefits, sanctions and penalties A.2-16 3.6 Responsibilities of SIFMA holders A.2-17 REFERENCES A.2-19 ANNEX A.3 – Analysis, Simplification and Harmonization of Special Land Use A.3-1 Management Agreement (SPLUMA) Regulatory Procedures 1.0 Overview A.3-1 1.1 Policy Basis A.3-1 2.0 Status of SPLUP/MAs A.3-2 3.0 Analysis of Issues on Existing SPLUMA Regulatory Procedures A.3-2 3.1 Identification and approval of potential sites/areas A.3-5 3.2 Qualification requirements for SPLUMA applicants A.3-10 3.3 Application requirements A.3-10 3.4 Processing and approval of SPLUMA A.3-11 3.5 Benefits, sanctions and penalties A.3-17 3.6 Responsibilities of DENR and M & E system A.3-18 4.0 Summary and Recommendations A.3-18 REFERENCES A.3-20 Appendix Table 1 A.3-22 Appendix Table 2 A.3-24 ANNEX A.4 – Analysis of the Regulatory Procedures on Forest Land Grazing A.4-1 Management Agreement (FLGMA) Regulatory Procedures 1.0 Overview A.4-1 2.0 Enabling Policy A.4-4 3.0 The Problem A.4-4 4.0 Analysis of Existing FLGMA Regulatory Procedures and Issues A.4-5 4.1 Areas available for FLGMA A.4-8 4.2 Application requirements A.4-8 4.3 Processing and approval of FLGMA A.4-10 4.4 Responsibilities of FLGMA holders A.4-14 4.5 Responsibilities of DENR A.4-15 4.6 Benefits and incentives of FLGMA holders A.4-15 4.7 Grounds for cancellation A.4-16 REFERENCES A.4-17 ANNEX A.5 – Analysis, Simplification and Harmonization of Private Forest A.5-1 Development Agreement (PFDA) Regulatory Procedures 1.0 Introduction A.5-1 2.0 PFDA-Related Policies A.5-1 2.1 Deregulation A.5-1 2.2 PLTP / SPLTP A.5-2 3.0 PFDA Status A.5-3 4.0 Analysis of PFDA Regulatory Procedures A.5-4 4.1 Application requirements A.5-5 4.2 Processing and approval A.5-7 4.3 Benefits / incentives for PFDA holders A.5-7 4.4 Sanction and penalties A.5-8 4.5 Other provisions A.5-8 REFERENCES A.5-9 ANNEX A.1 ANALYSIS OF THE REGULATORY PROCEDURES ON INTEGRATED FOREST MANAGEMENT AGREEMENT 1.0 OVERVIEW IFMA evolved out of the need to address the country's increasing demand for wood and forest products through the establishment of industrial forest plantations in lieu of the fast dwindling naturally grown forests. Timber and processed forest products from natural forests used to be a major source of national income through export earnings but this has become decreasingly evident through the years as our natural forests were rapidly depleted. Thus, the establishment of industrial forest plantations and the expected revenues from them after 10 to 15 years, was foreseen as a way to revive the floundering national economy while addressing the growing demand for wood and other forest products. The establishment and development of industrial forest plantations on a wide scale, however, requires the infusion of large investments that Government definitely does not have. Hence, private investors were invited to participate by providing the necessary funds and resources while Government provides the land in the development of industrial forest plantations. The IFM Program attracted private investors through incentive packages and a minimal government share in the future proceeds from the forest plantation. The terms for this arrangement between Government and private investors are contained in an agreement called IFMA. The "Integrated Forest Management Agreement (IFMA) is a production-sharing contract entered into by and between the DENR and a qualified applicant wherein the DENR grants to the latter the exclusive right to develop, manage, protect and utilize a specified area of forestland and forest resource therein for a period of 25 years and may be renewed for another 25-year period, consistent with the principle of sustainable development and in accordance with an approved comprehensive development and management plan (CDMP), and under which both parties share in its produce" (Section 3.u, DAO 99-53). The IFMA is an instrument intended to replace the Industrial Tree Plantation Lease Agreement (ITPLA) and the Timber License Agreement (TLA) in line with Constitutional changes in the mode of disposition and utilization of forestlands and forest resources from the licensing system to co- production, joint venture and production sharing systems. Thus, new ITPLAs and TLAs were no longer issued after DAO 91-42 was promulgated and ITPLAs and TLAs existing prior to 1991 were encouraged to convert to IFMA. The IFMA is awarded to qualified entities primarily for the establishment, development and utilization of industrial forest plantations in degraded forestlands and secondarily, for the management of natural forests existing within the IFMA areas. Previous policy issuances (DAO 91- 42 and DAO 93-60) initially classified two types of IFMA areas. Type I IFMA was issued for purely plantation establishment while Type II was for plantation development and management of natural forest combined. Existing policies, however, no longer distinguish between the two types of IFMA. ANNEX A.1 Integrated Forest Management Agreement From the issuance of the first DAO (91-42) on IFMA to its repeal by three succeeding DAOs (93- 60, 97-04, and 99-53), the IFMA guidelines and regulations have since undergone major changes brought about mainly by political changes in administration and their responses to public interest. More than a decade of IFMA implementation has generated issues and problems that have to be addressed by policy makers. This exercise in analyzing the IFMA policies is aimed at coming up with proposed simplification and harmonization of procedures to better achieve the objectives of the program. 1.1 Enabling Policy The enabling policy for IFMA is DENR Administrative Order (DAO) No. 99-53, which is entitled "Regulations on the Integrated Forest Management Program". DAO 99-53 was issued by then DENR Secretary Antonio H. Cerilles, and it repeals three previous Orders on IFMA: DAO 91-42, DAO 93-60, and DAO 97-04. DENR is mandated by Law, through the Revised Forestry Code of the Philippines (PD 705 as amended by PD 1559), the 1987 Philippine Constitution, and EO 192 of 1987, as the primary agency responsible for the conservation, management, development and proper use of the country's environment and natural resources. EO 278 of 1987 further authorizes DENR to negotiate and enter into contract with any Filipino citizen or entity for the disposition and utilization of forestlands and/or forest resources. 1.2 Brief History of IFMA Policies The IFMA evolved from the issuance of Executive Order (EO) Nos. 725 and 728 issued in 1981 and 1987, respectively. EO 725 mandates the establishment of industrial tree plantations (ITPs) in open, denuded, brushland and inadequately stocked areas. Implementing rules and regulations for ITP establishment and development through ITP Lease were provided in DAO 01, Series of 1989, issued by then Secretary Fulgencio S. Factoran, Jr. EO 728 basically replaced the licensing system (as mandated in PD 705) with the constitutionally (1987 Philippine Constitution) mandated modes of joint venture, co-production, or production sharing agreements for the development or utilization of forestlands and/or resources. This Order authorized the DENR to negotiate and enter into such agreements with Filipino qualified entities for a period of 25 years renewable for another 25. DAO 91-42 (issued by Sec. Factoran) empowered EO 728 through the revised regulations and guidelines governing the establishment and development of Industrial Forest Plantations (IFPs).