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Memo on Aquaculture Investment in the Philippines

The Philippine Fisheries Code (1998) provides for the development, management, conservation and utilization of fisheries and aquatic resources. Said code defines aquaculture as "fishery operations involving all forms of raising and culturing fish and other fishery species in fresh, brackish and marine areas". Under the authorization system of the Fisheries Code, licenses to engage in and set up an aquaculture facility are granted by the body that has jurisdiction over the venue of the aquaculture operation. Thus, in municipal waters1, the construction and operation of fish pens, fish cages, fish traps and other structures for the culture of fish and other fishery products is the task of local government units (LGUs), i.e. the municipal or city governments. The Fisheries Code requires all LGUs to enact, in consultation with the Fisheries and Aquatic Resources Management Councils (FARMCs), a basic Municipal Fisheries Ordinance (MFO) delineating the boundaries of the municipal waters as defined in the Code and providing the rules and regulations on licensing and permits and other fishery activities. According to the Code, only 10% of the surface area of lakes and rivers may be allotted for the construction and operation of fish pens, fish cages, fish traps and other structures for the culture of fish and other fishery products. Since the Code mandates the control of stocking density and feeding rates in such aquaculture facilities, certain guidelines for MFOs have been put into law. For instance, existing pearl farm leases must be respected. Likewise, new pearl farm leases may be granted by the LGUs having jurisdiction over the area to qualified persons who possess the requisite capital and technology. Meanwhile, duly registered fisher folk organizations or cooperatives enjoy preference in the grant of fishery rights by the LGUs. Beyond municipal waters, fish pens and fish cages must only be constructed and operated within fish pen and fish cage belts designated by the Bureau of Fisheries and Aquaculture Resources (BFAR), after corresponding licenses therefor have been issued by BFAR and fees have been paid. Furthermore, some special authorities have been created to control and supervise certain bodies of water that are regulated by specific laws. The National Irrigation Authority, for example, issues licenses for the Maga Dam. The Taal Lake is similarly controlled and supervised by a similar specialized body. When it comes to Fishpond Lease Agreements (FLAs), BFAR also has the responsibility of granting the same over public lands, mainly to fisher folk cooperatives/associations. These FLAs may be granted after public lands "such as tidal swamps, mangroves, marshes, foreshore lands and ponds suitable for fishery purposes" generally under the jurisdiction of DENR, have been declared alienable and disposable for fishpond purposes. When declared as such, DENR

Municipal waters are defined as to include streams, lakes, inland bodies of water and tidal waters within the municipality (and which are not included within declared protected area), as well as the marine waters as delineated in the Code (essentially limited to the waters 15 km from the shore).

releases control over the same to BFARs jurisdiction. It must be noted that the Code expressly forbids conversion of mangroves into fishponds. This prohibition thus practically limits the fishpond area to areas that have been previously developed. The conditions regarding the lease of public lands for fishpond development are further specified and detailed in Fisheries Administrative Order No. 167 (2000). Thus, fishpond leases are subject to the following conditions, inter alia:

Areas leased for fishpond purposes shall be not be more than 50 ha for individuals, and 250 ha for corporations or fisher folk organizations. The lease shall be for 25 years, renewable for another 25 years. In case of the lessees death, his spouse and/or children, as his heirs, shall have pre-emptive rights to the unexpired term of the FLA, subject to the same terms and conditions, and provided that the said heirs are similarly qualified. BFAR shall determine the lease rates for fishpond areas. All fees collected shall be remitted to the National Fisheries Research and Development Institute and other qualified research institutions to be used for aquaculture research development. The area leased shall be developed and producing on a commercial scale within 3 years from the approval of the FLA. All areas not fully producing within 5 years from the date of FLA approval shall automatically revert to the public domain for reforestation. The fishpond shall not be subleased, in whole or in part. Failure to comply shall mean cancellation of the FLA The transfer or assignment of rights under the FLA shall be allowed only upon prior written approval of BFAR. The lessee shall undertake reforestation for river banks, bays, streams and seashore fronting the dike of his fishpond. The lessee shall provide facilities that will minimize environmental pollution, i.e., settling ponds, reservoirs, etc. Failure to comply shall also mean cancellation of the FLA.

Also, any aquaculture structure - whether it concerns fish cages, fish pens, fish traps or fishponds - may not obstruct the navigation or "defined migration paths" of migratory fish species2. When it comes to private fish hatcheries, fish breeding facilities and private fishponds, these must be registered with the LGUs, who are in turn, mandated by the Code to prescribe minimum standards for such facilities in consultation with BFAR. Such private investments do not require a BFAR permit, but must nonetheless be registered with the local Municipal/City Agricultural Office. There is no minimum capital requirement for such ventures, but the usual 60-40 equity ratio must be observed when foreigners take part in the venture.

Fisheries Administrative Orders 216 and 217 (2001) contain the more detailed rules on these issues.

Lastly, BFAR conducts an annual inventory of all fishponds, fish pens and fish cages, whether in private or public land. Every fishpond, fish pen and fish cage operator must also annually report to BFAR about the type of species and the volume of production in the areas utilized for aquaculture.