QuestionsQuestions (OTC ADMINISTRATIVE ORDER NO. 2000-001)
It is issued pursuant to Section 2 of Executive Order No. 898 (Revised Charter of the Office of Transportation Cooperatives), as amended by Executive Order No. 1030, and other applicable laws.
Key objectives include equitable distribution of income/wealth, upgrading members’ social and economic conditions, integrating and rationalizing public transport systems, improving transport by route responsibility and maximum utilization of available vehicles under cooperatives to eradicate destructive competition, and enhancing revenue-generating projects/programs.
A transport service cooperative is one assisted in organization and accredited by OTC and registered with CDA to render public service under a franchise/CPC and necessity issued by relevant agencies (e.g., LTFRB, MARINA, CAB, LGUs), composed of persons (operators, drivers, conductors/conductresses, pilots, investors, allied workers, users/commuters) pooling skills, savings, and resources including vehicles/aircraft/watercraft to provide efficient carriage of passengers and goods.
It may exercise rights/privileges of persons, partnerships, and corporations; establish and operate enterprises; own and dispose of property; enter into contracts; sue and be sued; issue and handle negotiable instruments and obligations (e.g., promissory notes, mortgages, bills of exchange); issue bonds/debentures; and do other necessary acts to pursue its objectives.
At least 15 qualified natural persons may organize. They must have a common bond, possess required qualifications, reside/work in the area of operation, pledge responsibilities, complete Cooperative Education and Transport Operations Seminar (CETOS), and patronize or intend to patronize cooperative services (as owners/users or both).
Authorized capital stock: P240,000 (tricycle), P480,000 (jeepney/taxi/shuttle/motorized banca), P800,000 (mini-buses/buses/trucks), P3,200,000 (aircraft). At least 25% must be subscribed and 25% of subscribed must be paid-up. Paid-up minimums: P15,000 (tricycle), P30,000 (jeepney/taxi/shuttle/motorized banca), P50,000 (mini-bus/buses/trucks), P200,000 (aircraft) or the amount needed for viability in the feasibility study—whichever is higher. Paid-up capital should be in cash.
(1) For individual members: at least 15 units of jeepneys/taxis/tricycles/vans/AUVs; 10 for bus/mini-bus; 5 for motorized banca; 2 for trucks. (2) For cooperative-owned: at least 5 units of jeepneys/taxis/tricycles/vans/AUVs; 2 for buses/mini-buses/motorized banca; 1 for truck and aircraft. OTC may exempt in highly exceptional cases involving remote/isolated barangays.
Cooperatives should be organized from passenger lines converging into/passing through a common point. No cooperative should be organized along a single route unless profitable enough (as determined by DOTC route surveys) to ensure viability. As much as practicable, no two cooperatives on the same route/line; new cooperatives may be allowed under conditions such as viability of another, potential service, complementary operation, existing cooperative unable to accommodate more members/units without serious prejudice, different route structure, or lack of objection/endorsement by the existing cooperative.
The proposed cooperative should be encouraged to join the existing cooperative unless the existing cooperatives’ applied routes are not practicable due to size, viability, or geographical location, or in OTC’s opinion the routes are best operated by more than one cooperative. If there’s no pending expansion or expansion is not feasible, OTC may allow a new cooperative without prejudice, while adopting measures to protect the existing cooperative’s interests.
Organizers must form a Core Group/Organizing Committee existing only up to the first Board of Directors meeting. It prepares feasibility studies, draft Articles/By-Laws via an ad-hoc committee, prepares documents, recruits members, collects membership fees and initial paid-up capital, and assists in CETOS. It is automatically dissolved after election and oath-taking of the Board, and must turn over funds/records/documents to the Board.
CETOS is a cooperative education and transport operations seminar conducted by OTC among prospective members (in coordination with the prospective cooperatives). It covers: overview and rationale/objectives/functions of transport cooperatives; essential provisions of RA 6938/6939 and franchising/licensing/registration and traffic laws; model Articles/By-Laws and structure; policies for cooperative operations; available financial/technical assistance; and CDA registration requirements.
Applications are filed with OTC. OTC evaluates within 15 days. If requirements are fully satisfied, it is presented to the OTC Board for approval; otherwise applicants are informed of deficiencies.
Membership is limited to individual natural persons and open to workers in the transportation industry and users of public transport services. Prospective members must be Filipino citizens, at least 18 years old, and possess qualifications/nones disqualifications under applicable rules/by-laws. Membership is voluntary, without discrimination, and no person may be a member of more than one transport service cooperative.
Each member has one vote regardless of shares; proxy voting is not allowed. Regular or special general assembly quorum is one-half plus one of total members in good standing, considering those who have been members for at least six months. If quorum is not present at the fixed time, members present constituting at least 30% of members in good standing may transact, but resolutions are not valid until ratified in writing by at least two-thirds of members within one month.
Board membership is an odd number, not less than 5 nor more than 15. It consists of representatives from drivers and operators’ group; drivers represent at least 30% but not more than 50% of total board membership (unless the cooperative is exclusively for drivers or individual users). Directors are elected by secret ballot for 2-year terms, re-electable up to 3 consecutive terms.
Directors are disqualified if not in good standing and/or for grounds such as: holding certain elective government positions (except barangay council), conflicting interest, absences in required board meetings, removal by General Assembly, being an employee/relative within the third civil degree of the general manager or cashier, profit participation in dealings with the cooperative, family group where one is already a director, and conviction for crimes involving moral turpitude or findings of gross negligence or financial/property accountability violations in administrative/civil proceedings.
Election offenses include coercion/intimidation or undue influence to affect members’ votes, threats/violence/fraudulent devices to affect voters, coercion of election committee officials/members, offering expenditures from cooperative funds to influence votes, unlawful electioneering within the 15-day pre-election window and on the day of election within the polling place, misuse of cooperative funds or money deposited for election campaigns, and carrying deadly weapons in the polling place and within 100 meters on election day.