Creation and Purpose of the Fine Rating System
- PAB shall develop a fine rating system to adjust the fine amount based on several factors:
- Violator's ability to pay
- Degree of willfulness
- Degree of negligence
- History of non-compliance
- Degree of recalcitrance
- In cases of negligence without aggravating circumstances, the fine shall be half the amount of willful violation fines.
Scope and Applicability
- These guidelines apply to air pollution cases concerning stationary sources under RA 8749 and its Implementing Rules and Regulations (IRR).
- Cases brought before PAB or through regional offices of DENR, including referrals from the Laguna Lake Development Authority (LLDA), PENROs, and CENROs, fall within this scope.
- Guidelines are to be liberally construed to facilitate compliance and just, speedy, and inexpensive case resolution.
Key Definitions
- Board/PAB: Pollution Adjudication Board
- CENRO: Community Environment and Natural Resources Office
- Department: Department of Environment and Natural Resources (DENR)
- Order: Any PAB-issued order
- PCO: Pollution Control Office accredited by DENR
- PENRO: Provincial Environment and Natural Resources Office
Sources of Emissions and Parameters for Violation
- Stationary sources include but are not limited to fuel burning equipment (coal, oil, bagasse, wood), cement plants, furnaces, petrochemical and chemical plants, milling processes, extractive industries, geothermal power plants, incinerators, asbestos-based industries, and others like furniture production.
- Practical parameters for analysis include particulate matter (PM), sulfur oxides (SOx), nitrogen oxides (NOx), carbon monoxide (CO), volatile organic compounds (VOC), heavy metals, acid mist/vapor, persistent organic pollutants (POPs), and others as specified in the National Emission Standards for Source Specific Air Pollutants (NESSAP).
- Parameter sampling depends on analyzer availability and technical capability.
Fine Computation Factors and Weightage
- Fines are computed based on a 100-point system distributed as follows:
- Degree of willfulness: 10 points
- Degree of negligence: 5 points
- History of non-compliance: 10 points
- Degree of recalcitrance: 15 points
- Exceedance of standards: 60 points
Degree of Willfulness
- Defined as deliberate refusal to comply with PAB or EMB requirements, including submitting false/misleading data or late document submissions.
- Scoring:
- Maximum 10 points for misleading/misrepresenting facts
- Other violations: first offense (3 points), second offense (5 points), third or more offenses (10 points)
Degree of Negligence
- Points set at half of the willfulness rating (max 5 points).
- Aggravating factors include:
- Non-maintenance or failure to complete Air Pollution Control Facility (APCF)
- Failure to file motions timely
- Failure to notify breakdowns within 24 hours
- Operating without APCF
- Max 5 points irrespective of number of such factors
History of Non-Compliance
- Considers cases brought before the Board:
- First offense: 3 points
- Second offense after Formal Lifting Order (FLO): 5 points
- Third or more offenses: 10 points
Degree of Recalcitrance
- Fixed 15 points regardless of offenses.
- Includes refusal to:
- Allow entry to PAB representatives
- Accept or execute PAB orders
- Appear at hearings/conferences without valid excuses
Exceedance of Standards Point Equivalent
- Points correspond to degree of standard exceedance:
- Up to 30%: 10 points
30% to 50%: 20 points
50% to 70%: 30 points
70% to 85%: 40 points
85% to 90%: 50 points
90%: 60 points
- Computation based on lab analysis from samples collected during inspections.
Fines Schedule Based on Total Points
- Total points map to fine amounts per day:
- Up to 30 points: Php 10,000
- 31-40: Php 20,000
- 41-50: Php 30,000
- 51-60: Php 40,000
- 61-70: Php 55,000
- 71-80: Php 70,000
- 81-90: Php 85,000
- 91-100: Php 100,000
Consideration of Violator’s Ability to Pay
- Fines may be adjusted based on financial capacity, particularly for Micro, Cottage, and Small Enterprises (MCS).
- Requires submitting financial documentation such as tax returns, audited financial statements, or registration documents.
- MCS enterprises are defined as those with assets not exceeding Php 15 million excluding land.
Fine Limits for Micro, Cottage, and Small Enterprises
- Maximum fines vary based on asset size:
- Up to Php 150,000 assets: max Php 10,000 fine
- Php 150,000 to 1 million: max Php 40,000
- Php 1 million to 5 million: max Php 60,000
- Php 5 million to 10 million: max Php 80,000
- Php 10 million to 15 million: max Php 100,000
- Toxic and hazardous emissions subject to full fines regardless of enterprise size.
Notification and Procedural Requirements
- Violating firms must be immediately notified via a Notice of Non-Compliance (NON) issued by the Regional Director.
- Existing rules of the PAB govern procedures for enforcing and computing fines.
Required Documentation for Fine Computation
- Respondents may be required to provide:
- Notarized Pollution Control Officer (PCO) reports (including operating days, maintenance, shutdowns, volumetric flow rate, operational status)
- Continuous Emission Monitoring System (CEMS) data, if applicable
- Income Tax Return (ITR), SEC/DTI registration, audited financial statements
- Other documents as required
Fine Computation Adjustments for Asset Changes
- If an enterprise's assets change classification during the violation period, fines will be computed in sub-periods:
- First sub-period based on MCS provisions
- Second sub-period based on regular point system
Daily Computation of Fines and Exemptions
- Fines apply per day of violation from sampling date indicating exceedance until compliance or issuance of Cease and Desist Order (CDO).
- No fines during:
- Days of non-operation or equipment breakdown with timely notification
- Force majeure events with prompt written notice and due diligence
- Period covered by executed CDO
- Partial day operations considered as full day for fines calculation.
Handling Firms with Multiple Emission Sources
- Average pollution exceedance of all sources is calculated using a prescribed formula and compared against DENR standards.
Additional Penalties for Non-Attainment Areas
- Sources located in air quality non-attainment areas incur a 100% surcharge (doubling) on base fines.
- This surcharge also applies to new and modified sources in these areas.
Termination of Cases
- PAB may lift Cease and Desist Orders and terminate cases if emissions comply with standards and all fines have been paid.
Transitional and Miscellaneous Provisions
- Pending air pollution cases must conform to these guidelines within 30 days from effectivity.
- Unconstitutional or invalid provisions do not affect other parts of the guidelines.
- Inconsistent prior policies and rules are repealed or modified accordingly.
- Guidelines take effect 15 days after publication.
Mathematical Formulas for Pollution Exceedance
- Specific formulae provided for calculation of pollution exceedance for single and multiple emission sources.
- Formulae consider source concentrations and DENR standards to quantify percent exceedance.
- Application subject to technical capacity and availability of analyzers.
Note: Sampling and enforcement subject to practical constraints such as analyzer availability and technical capability.