Republic of the Philippines

HOUSE OF REPRESENTATIVES
Quezon City, Manila

Fourteenth congress

HOUSE BILL NO. ________

Introduced by:

AN ACT TO REGULATE AGRICULTURAL JOINT VENTURE AGREEMENT

TO PROTECT AND PRESERVE FOOD SECURITY NEEDS OF THE
PHILIPPINES

SECTION 1. Title – this act shall be known as “Agricultural joint venture

regulation act”.

SECTION 2. Declaration of Policy – it is a mandate and policy of the

government to enter into co-production, joint venture, or production-sharing
agreements with private corporations or associations. In order to protect and
preserve food security, the government promote the efficient use of
resources by regulating joint undertakings agreement with respect to
agriculture.

SECTION 3. Definition of Terms:

1. Agricultural production and processing zone

a. 1. Agriculture production - refers to the production of food,

goods and other desired products through farming and
forestry.

a. 2. Processing zone – refers to a geographic area located

physically and or administratively outside and/or inside
customs territory. Mainly oriented to import and export
production. Enterprises located in processing zones are
allowed to import and export capital equipment and raw
materials free from duties, taxes and other import restrictions

2. Agricultural joint venture agreement – refers to the contractual

agreement whereby foreign investors entity or a group of foreign
investors entities on one hand, and a government entity or a group of
government entities on the other hand contribute money/capital,
services, assets (including equipment, land or intellectual property), or
 a combination of any or all of the foregoing. All parties agree to share
in the profits and losses of the enterprise.

3. Bio-fuel – refer to as solid, liquid or gaseous fuel obtained from

relatively recently lifeless or living biological material and is different
from fossil fuels, which are derived from long dead biological material.
Also, various plants and plant-derived materials are used for bio-fuel
manufacturing.

4. Corporation - refers to as an artificial being created by operation of

law, having the right of succession and the powers, attributes and
properties expressly authorized by law or incident to its existence.

5. Food security - refers to the availability of food and one's access to

it. A household is considered food secure when its occupants do not
live in hunger or fear of starvation.

6. Labor consultant – refers to an experienced individual that is trained

to analyze and advise a client in order to help the client make the best
possible choices.

6. Non-domestic resources – refers to any capitals that is foreign

and/or international, not domestic.

SECTION 4. Joint venture agreement over agricultural production shall be

conditioned upon:

1. Constitutional prohibition on owning land - in pursuant to Sec. 3 Art. XII

of the 1987 constitution provide that private corporations or
associations are not allowed to hold such agricultural lands of the
public domain except by lease, for a period not exceeding twenty-five
years, renewable for not more than twenty-five years, and not to
exceed one thousand hectares in area.

2. Corporation – under official development assistance, (ODA) build

operate and transfer law (BOT) and government procurement reform
act (GPRA) where government-owned and/or controlled corporations,
government corporate entities government instrumentalities with
corporate powers are allowed to own jointly undertake
assets/businesses.
 3. Infusion of new capital from non domestic resources - under Philippines
constitution and other pertinent laws provides that the government
entity contribution in the JV company shall only be less than fifty
percent (50) of the outstanding stock of the latter which shall be
subject to a 3rd party independent valuation. Government contribution
may be through assets (including money, equipment, land, intellectual
property or anything of value. The government may enter into joint
venture agreements with Filipino citizens, or corporations or
associations at least sixty per centum of whose capital is owned by
such citizens.

4. To meet the demand of local consumers. Exports only surplus – export

only surpluses local products that enabled the local consumer avail
and / or have access to locally produced goods.

SECTION 5. Labor consultant, priorities are Filipinos – the agreed party are
authorized to set aside a portion of its appropriation for the hiring of the
services of qualified Filipino labor consultants. It shall avail itself of the
services of the Government as may be required.

SECTION 6. Equipment locally made except as needed, tariff fee, technology

transfer - domestic materials and locally produced goods shall free from
duties, taxes and other import/export restrictions. Private sector party shall
allow to take over the undertakings of the projects in it’s entirely after the
government entity divest itself of any interest in the joint venture.

SECTION 7. Creation of agricultural and processing zones as may be

determined by the PEZA after due consultation with sectors – establishment
of economic zone under PEZA is based on prioritization system. The metes
and bounds of each ECOZONE are to be delineated and more particularly
described in a proclamation to be issued by the President of the Philippines,
upon the recommendation of the Philippine Economic Zone Authority (PEZA),
which shall be established under this Act, in coordination with the municipal
and / or city council, National Land Use Coordinating Committee and / or the
Regional Land Use Committee.

SECTION 8. Privileges same as PEZA – The agricultural joint venture

agreement shall have the following powers and functions.

(a) To register, regulate and supervise the enterprises in the ECOZONE

in an efficient and decentralized manner.

(b) To coordinate with local government units and exercise general

supervision over the development, plans, activities and operations of
 the ECOZONES, agricultural production processing zones, and the like.

(c) In coordination with local government units concerned and

appropriate agencies, to construct, acquire, own, lease, operate and
maintain on its own or through contract, franchise, license, bulk
purchase from the private sector and build-operate-transfer scheme or
joint venture, adequate facilities and infrastructure, such as light and
power systems, water supply and distribution systems,
telecommunication and transportation, buildings, structures,
warehouses, roads, bridges, ports and other facilities for the operation
and development of the ECOZONE;

(d) To adopt, alter and use a corporate seal; make contracts, lease,
own or otherwise dispose of personal or real property; sue and be
sued; and otherwise carry out its duties and functions as provided for
in this Act.
(e) To coordinate with the National Economic Development Authority
(NEDA), the Department of Trade and Industry (DTI), the Department
of Science and Technology (DOST), and the local government units and
appropriate government agencies for policy and program formulation
and implementation.

SECTION 9. Restriction of using bio-fuel, food security priority – it shall not

allow the use of bio-fuel productions. It shall not, during joint undertakings,
directly or indirectly, use and/or utilize bio-fuel production. Thus, Bio-fuel
production affects food price and food security.

SECTION 10. Repealing clause – all laws, decrees, orders, rules and
regulations or other issuances inconsistent with the provisions of this act are
hereby repealed, amended or modified accordingly.

SECTION 11. Separability clause – if any part, section or provisions of this act
is held invalid or unconstitutional, other provisions not affected thereby shall
remain in full force and effect.

SECTION 12. Effectivity clause – this act shall take affect fifteen (15) days
after its publication in at least two (2) newspapers of general circulation.