Legal basis and related legal issuances
- PPA Administrative Order No. 08-96 is grounded on Section 2 (f), Article II, Section 6-a(ii), (iii), (v), (x), 6-b(xv), Article IV, and Section 20(a), Article VII of PD 857, with Section 20(a) amended by LOI 1005-A (Section 1.1–1.3).
- The order cites Executive Order No. 159 dated Feb. 23, 1994 and Executive Order No. 212 dated Nov. 28, 1994 as part of its legal basis (Section 1.4–1.5).
- The order states that penalties for violations are governed by Section 43 of PD 857, as amended by Executive Order No. 513, including implementing regulations (Section 14).
- The regulation directs monitoring/compliance and authority delegation references to PPA Memorandum Circular No. 38-88 and PPA Memorandum Circular No. 17-90 (Section 6.2.6).
- Security/watchman application processing follows PPA Memorandum Circular No. 16-90 dated 10 April 1990 re: Revised Guidelines on the Supervision of Private Security Agencies Operating within PPA Jurisdiction (Section 6.2.7).
Policy, purpose, and regulatory approach
- PPA regulates and rationalizes ancillary services to port users through licensing of capable operators and continuous availability of needed services (Section 5.3).
- PPA shall provide ancillary services either by itself or through contracting private companies (Section 5.1).
- The regulation encourages private sector participation in providing ancillary services (Section 5.2).
- Port users retain freedom to choose among service providers that are duly authorized by the Authority (Section 5.4).
- Ancillary services must be provided on a non-exclusive basis (Section 5.5).
- Public bidding is required for ancillary services whose contracts have expired (Section 5.6).
Scope, coverage, and definition
- The regulation applies to all ancillary services to cargoes, vessels, and clients/users transacting business in all government ports under the jurisdiction of PPA (Section 3).
- The regulation includes permits to operate ancillary services in port premises covered by lease contracts (Section 3).
- Ancillary services mean services other than cargo handling, porterage services, and pilotage services performed inside the port, including its harbors/fairways and extensions, involving provision/application/use of equipment, facility, utility, manpower/expertise, and goods, as covered by Annex “A” (Section 4).
Regulation of operators and permits
- Any person, natural or juridical, qualified under existing laws to engage in business, and any existing operator not yet holding a PPA permit (or operating in “hold-over capacity”) must apply for a permit to operate ancillary service from the local Port Management Office (PMO) where the applicant intends to operate (Section 6.1).
- Applications must be filed and processed by the concerned Port Management Office; the requirement checklist is in Annex “B” (Section 6.2.1).
- Applications filed or submitted are initially evaluated by the PMO concerned, including those directly filed at the Port District or Head Office, which must be immediately transmitted to the PMOs (Section 6.2.2).
- Processing and approval duration is based on contract duration:
- One (1) year applications are processed and approved by the PMO (Section 6.2.3).
- Two (2) year contracts/permits are forwarded to the District Manager for approval and issuance (Section 6.2.3).
- Three (3) years or above contracts/permits are forwarded to the Office of the AGM for Operations/POSD for technical processing/evaluation/review, and approval follows the approved delegation of authority (Section 6.2.3).
- Authentication of all relevant documents must be strictly accomplished by the Port Manager by signing every consecutively numbered document accompanying each application (Section 6.2.4).
- The PMOs must specifically authenticate the correctness/veracity of the copy of Ancillary Service Rates as prescribed/restructured by the Authority or as proposed by the applicant (Section 6.2.4).
- After permits become effective, the PDO/PMO monitors compliance with every term/condition in the permit, and non-compliance is subject to appropriate action under existing regulations (Section 6.2.5).
- Copies of approved permits must be submitted by the PMO to the Port District Office and the AGM for Operations Office as mandated by PPA MC No. 38-88 and MC No. 17-90 (Section 6.2.6).
- Processing of permits for security/watchman services follows PPA Memorandum Circular No. 16-90 dated 10 April 1990 (Section 6.2.7).
- Processing of permits for transportation and freight service operators includes processing of individual passes for vehicle access based on registration certificates submitted, provided necessary police and safety clearance are issued by the appropriate unit of the PMO concerned (Section 6.2.8).
Duration, renewal, rates, government share
- Permits generally issued under the order are valid for one (1) year (Section 6.3).
- Contracts generally have validity of 2-3 years or more from the date of approval (Section 6.3).
- Renewal applications must be filed within thirty (30) days before the expiration of the permit/contract (Section 6.3).
- Failure to file a renewal within the thirty (30) days period without justifiable reason constitutes a ground for non-extension of the permit/contract (Section 6.3).
- If renewal has not yet been issued for valid reasons, the applicant may continue to operate in hold-over capacity subject to the terms and conditions of the previous permit (Section 6.3).
- For ancillary service operations, rates applicable are those agreed upon by the parties; if there is absence or conflict, the Authority shall establish the applicable rates (Section 7).
- For services/businesses rendered inside the port, collection rules apply:
- Under Port Ancillary Services I (Annex “A” Group I), the permittee/contractor must remit to the Authority not later than the 10th day of each month an amount not less than 10% of the gross income derived from operation of the listed ancillary services (Section 8.1).
- Under Port Ancillary Services II (Annex “A” Group II), a regulatory fee is collected in consideration of the permit to operate for the ancillary services listed (Section 8.2).
- The operator must submit monthly to the PMO its gross income earned from ancillary services by submitting its financial statement, without prejudice to PPA’s undertaking an examination of its books of accounts (Section 8.3).
- The Authority’s fees are not limited to services mentioned in the order; the Authority may collect fees on other ancillary services and may increase the floor rates as it deems necessary (Section 9).
Port Manager duties and operator standards
- Port Managers of PMOs must supervise ancillary service operations and enforce permit terms and conditions, and initiate necessary corrective measures including enforcement of regulations applicable to such devices (Section 10.1).
- Port Managers may directly undertake ancillary service projects when private sector provision cannot be timely due to relatively substantial project capitalization (Section 10.2.1).
- Port Managers may directly undertake ancillary service projects when direct operation/use of facility and equipment is vital for continuity of service and necessary in the interest of security and public safety (Section 10.2.2).
- Port Managers may directly undertake ancillary service projects when the service must be provided due to urgency to meet strong public demand (Section 10.2.3).
- Authorization to render ancillary services is limited to qualified applicants (Section 11).
- Administrative qualification standards require the operator to:
- hold a valid PPA contract, permit or license (Section 11.1.1);
- comply with permit/contract registration requirements of other government agencies (Section 11.1.2);
- be properly organized and managed by experienced officers and personnel (Section 11.1.3);
- have sufficient capitalization to operate and maintain good service (Section 11.1.4);
- comply with labor laws, compensation laws, and labor relations requirements (Section 11.1.5);
- comply with administrative terms and conditions of its PPA permit/contract (Section 11.1.6);
- undertake training and skills upgrading of personnel (Section 11.1.7);
- renew its PPA permit/contract promptly and before expiration (Section 11.1.8).
- Operational standards require the operator to:
- comply with operational terms and conditions of its PPA permit/contract (Section 11.2.1);
- provide efficient, quality service (Section 11.2.2);
- observe professionalism, good conduct, and discipline (Section 11.2.3);
- observe safe operating procedures and follow port safety regulations (Section 11.2.4);
- not engage in illegal and unauthorized activities in the port (Section 11.2.5);
- maintain upkeep and cleanliness in its area of operations (Section 11.2.6);
- provide sufficient equipment/facilities and skilled workers (Section 11.2.7);
- undertake proper equipment maintenance, equipment acquisition, and modernization (Section 11.2.8);
- ensure prompt and reliable service to clients (Section 11.2.9);
- regularly submit operational/performance reports as required by PPA (Section 11.2.10);
- ensure its performance does not hamper or adversely affect port operations (Section 11.2.11);
- safeguard and protect port users/facilities (Section 11.2.12);
- promptly and judiciously act on claims, losses, damages, or complaints (Section 11.2.13);
- follow port rules and regulations and support/ cooperate with PPA port plans and programs (Section 11.2.14).
- Financial standards require the operator to:
- comply with financial terms and conditions in its PPA permit/contract (Section 11.3.1);
- have sufficient working/operating capital necessary for good service (Section 11.3.2);
- follow PPA authorized/prescribed rates/charges (Section 11.3.3);
- maintain financial records and submit reports as required by PPA (Section 11.3.4);
- promptly remit/pay its prescribed government share (Section 11.3.5).
Revocation/cancellation, withdrawal, penalties
- Contracts/permits may be revoked on these grounds:
- violation of PD 857 and rules/regulations promulgated pursuant thereto, including requirements stipulated in the permit (Section 12.1);
- engaging in activities other than authorized in the permit (Section 12.2);
- failure to pay required fees due and unpaid for more than three (3) months (Section 12.3);
- failure to maintain efficient and effective service (Section 12.4);
- misrepresentation of facts or falsification of documents in the original application and supporting documents (Section 12.5);
- using the permit to further or to conceal operations involving nefarious, illegal, immoral, and vicious activity (Section 12.6).
- If an operator decides to stop or suspend operations inside the port, it must send written notice to the concerned Port Manager at least thirty (30) days before cessation (Section 13).
- Withdrawal/suspension results in automatic cancellation of the permit to operate (Section 13).
- The effect of withdrawal or suspension is determined by the Port Manager in each instance, considering reasons and the need for continuity of service in the port (Section 13).
- Violations by any person of the order, its implementing rules/regulations, or the terms and conditions in the contract/permit are subject to the administrative fines and penalties under Section 43 of PD 857, as amended by Executive Order No. 513, and its implementing regulations (Section 14).
Repeal and non-impairment; effectivity mechanism
- All PPA orders, circulars, rules, and regulations inconsistent with the order are repealed, amended, or modified accordingly (Section 15).
- Nothing in the order alters, revokes, or impairs any existing contract or permit effective at the time the order becomes effective (Section 16).
- Effectivity occurs after PPA Board of Directors approval and publication in a newspaper of general circulation, with effect fifteen (15) days after publication (Section 17).
Annex: Ancillary services—Group I and II
- Port Ancillary Services I (10% Government Share) include:
- Cargo Checking Service—service of tallying by marks, countermarks, and numbers, quantity/conditions, and measurements of breakbulk cargoes performed by duly authorized Cargo Checkers other than the cargo handling operator (Annex “A” I.1).
- Equipment/Appliance Hire—leasing/providing cargo handling gears/equipment/appliance to cargo handling operators or consignees (Annex “A” I.2).
- Vessel Maintenance/Repair Service—repairs for upkeep of vessels and cargo gears/equipment (Annex “A” I.3).
- Waste Disposal Service—waste collection for ships for garbage, oil/sludge, and other waste (Annex “A” I.4).
- Other Services—services not listed that the Authority may classify in future regulations (Annex “A” I.5).
- Port Ancillary Services II (Annual Regulatory Fee) include:
- Bunkering—supplying/delivering oil, gasoline, grease, lubricant, and other oil products/materials (Annex “A” II.1).
- Canteen Service—selling food at a fixed area within an office building to serve employees/occupants (Annex “A” II.2).
- Cargo Surveying Service—inspecting/determining condition or extent/appraisal of damage of cargoes for insurance and related purposes (Annex “A” II.3).
- Chandling—supplying food items, groceries, consumables, and other provisions to vessels/sea-going crafts docked at piers/wharves/anchorage (Annex “A” II.4).
- Cleaning Service—cleaning passenger, bulk, oil, and other types of vessels at berth or at anchorage (Annex “A” II.5).
- Container Repair—repairs on containers within port premises (Annex “A” II.6).
- Communication Service—telephone and/or telegrams/letters services within port premises (Annex “A” II.7).
- Fumigation—disinfecting containers/ship compartments to rid vans/vessels or pests (Annex “A” II.8).
- Laundering—laundry services for linens/curtains/similar items and vessel crew clothing apparel (Annex “A” II.9).
- Lighterage/Barging Service—loading/unloading/transportation of goods by lighters or barges (Annex “A” II.10).
- Parking/Garage Services—providing parking spaces for vehicles for the general public area (Annex “A” II.11).
- Reproduction Service—copying services for documents (Annex “A” II.12).
- Security Service—security/protection/safety to cargoes onboard vessels at berth/anchorage or in warehouses/buildings/other port areas (Annex “A” II.13).
- Shops/Stores—shops and stores within the port zone including sari-sari store, souvenir/curio shops, bookstore, newsstand, drugstore, and similar services (Annex “A” II.14).
- Transport Service—trucks and other vehicles for delivery of cargoes/passengers (Annex “A” II.15).
- Towing/Tugging Service—pulling or pushing a vessel using watercraft (Annex “A” II.16).
- Water Suppliers—supplying fresh water to vessels/ships/sea-going crafts docked at piers/wharves/anchorage (Annex “A” II.17).
- Water Taxi—ferrying ship’s crew/agents/provisions and passengers to/from a vessel at berth/anchorage by small craft (Annex “A” II.18).
- Weighbridge/Truck Scale—weighing cargo on truck or other delivery equipment to determine charges based on cargo weight (Annex “A” II.19).
- Other Services—services not listed that the Authority may classify in future regulations (Annex “A” II.20).