Revised Rules on Socialized Industrial Forest Management

Policy and program purposes

The DENR is mandated to ensure equitable access to and sharing of benefits from natural resources development and utilization by providing opportunities for wider societal participation in forest resources development (Section 1).
The DENR provides security of tenure to qualified participants by issuing Socialized Industrial Forest Management Agreements (SIFMA) under the Socialized Industrial Forest Management Program (SIFMP) (Section 1).
The SIFMP grants participants a privilege to benefit from forest crops produced from areas developed by them, primarily timber, non-timber forest products, fruits from tree orchards, and other cash crops that may be interplanted (Section 1).
The SIFMP is intended to enhance society’s general welfare through on-site and off-site environmental enhancement effects of forest cover restoration and production of forest-based goods and services (Section 1).
The SIFMP is expected to produce increased supply of timber and other forest products including food (Section 2.1).
The SIFMP is expected to accelerate reforestation and rehabilitation of open and denuded forest lands and protect existing natural forests (Section 2.2).
The SIFMP is expected to conserve soil and water and biodiversity and enhance environmental conditions (Section 2.3).
The SIFMP is expected to generate additional sources of income and livelihood in uplands and improve economic well-being of the people (Section 2.4).
The SIFMP is expected to provide more equitable access to forest lands and resources (Section 2.5).

Definitions and key terms

A Socialized Industrial Forest Management Agreement (SIFMA) is an agreement entered into by and between a natural or juridical person and the DENR granting the right to develop, utilize, and manage a small tract of forest land consistent with sustainable development principles (Section 3.1).
A SIFMA Holder is a qualified person who has entered into a SIFMA with the DENR (Section 3.2).
A Socialized Industrial Forest Plantation (SIFP) is a tract planted primarily to trees and other products to support manufacturing and processing facilities and/or supply wood, food, and biomass energy sources (Section 3.3).
Brushland is land predominantly covered with shrubs or short, stunted trees (Section 3.4).
Open and Denuded Land is land formerly forested but depleted of natural forest cover and predominantly covered by grasses, herbaceous species, or bare soil (Section 3.5).
DENR refers to the Department of Environment and Natural Resources (Section 3.6).
Secretary refers to the DENR Secretary (Section 3.7).
FMB refers to the Forest Management Bureau (Section 3.8).
RED refers to the DENR Regional Executive Director (Section 3.9).
RTD refers to the Regional Technical Director for Forestry (Section 3.10).
PENRO refers to the Provincial Environmental and Natural Resources Office (Section 3.11).
CENRO refers to the Community Environment and Natural Resources Office (Section 3.12).
LGU refers to a Local Government Unit (Section 3.13).
NGO refers to a Non-Governmental Organization (Section 3.14).

Areas covered and size limits

SIFMAs may cover all grasslands, brushlands, and open and denuded forest lands suitable as production forest under DENR jurisdiction (Section 4).
SIFMAs may cover such areas within government reforestation projects (Section 4).
SIFMAs may cover areas that are not part of the initial component of, or not otherwise classified under, the National Integrated Protected Areas System (NIPAS) (Section 4).
SIFMAs may cover areas that are not covered by CADC/CALC and CADT/CALT (Section 4).
SIFMAs may cover areas that are not covered by prior vested rights, licenses, permits, or management agreements (Section 4).
Areas subject to vested rights, licenses, permits, or management agreements may be made available for SIFMA only through prior express and written agreement of the holder of the claim or right (Section 4).
Areas covered by pending applications for Certificates of Ancestral Domain/Land Claim (CADC/CALC) may not be opened to SIFMA applications until the National Commission on Indigenous Peoples (NCIP) has denied or rejected with prejudice such application (Section 4).
Areas currently occupied based on a legal claim may not be opened for SIFMA applications without prior express and written agreement of the occupant or until the legal claim is resolved (Section 4).
The maximum SIFMA area for individuals/single family is 1 to 20 hectares (Section 5).
The maximum SIFMA area for association, partnership or cooperative is over 20 hectares to 500 hectares (Section 5).

Applicants, disqualification, and SIFMA duration

Filipino citizens who are of legal age and preferably residents of the municipality where the area is located may participate as individuals/single family units (Section 7.1).
Actual occupants of the area must be given priority for individuals/single family units (Section 7.1).
Cooperatives, associations, and partnerships with members who are Filipino citizens and residents of the province where the SIFMA site is located may participate if duly registered with the Cooperative Development Authority, Department of Trade and Industry, or Securities and Exchange Commission as applicable (Section 7.2).
Applicants previously issued Tree Farm Lease Agreements (TFLAs), Industrial Forest Management Agreements (IFMAs), or other permits/licenses that were canceled due to inability to comply with contract provisions and failure to develop areas into the prescribed land use are disqualified (Section 8.1).
Applicants are disqualified if any of their officers has proven derogatory records, including: anti-dummy law violations, tax evasion, illegal logging/smuggling, unauthorized transfer or subcontracting of forest permits/licenses, and cases where members of cooperatives/associations holding forestry permits, licenses, agreements, lease or contracts cannot comply with the terms and conditions thereof (Section 8.2).
The holder of any subsisting forestry permit, license, lease, contract, or management agreement is disqualified (Section 8.3).
DENR must issue SIFMAs with a duration of 25 years, renewable for another 25 years (Section 9).
DENR must award SIFMA areas on a first-come, first-served basis (Section 9).
A SIFMA is issued in the name of the applicant; for married individuals, it is issued in the names of both spouses (Section 9).
A SIFMA may be transferred, conveyed, or sold, in whole or in part, only to persons, cooperatives, or associations qualified under Sections 7 and 8, subject to approval:
- PENRO for transfers to a qualified individual or family; and
- RED for transfers to a cooperative or association (Section 9).
Transfers must not exceed the 20 ha limit for individuals/single family units or the 500 ha limit for cooperatives and associations (Section 9).
The transferee must assume the original SIFMA’s rights and obligations and must commit to continue the SIFMA for the remaining agreement years (Section 9).
Transfer, conveyance, or sale documents must be notarized and copies must be forwarded to the FMB, RED, PENRO, CENRO, and concerned LGUs (Section 9).
If a SIFMA is canceled, copies of the cancellation order must be furnished to the FMB, RED, PENRO, CENRO, and concerned LGUs (Section 9).

Applications and processing steps

SIFMA applications must be filed with the CENRO concerned using the prescribed format in Annex "A" (Section 10).
A SIFMA application must include a non-refundable application fee of P1.00 per hectare or fraction thereof, but not lower than TWO HUNDRED AND FIFTY PESOS (P250.00) (Section 10.1).
The application must include the location and sketch map of the area applied for (Section 10.2).
For individuals/single family units, the application must include a Community Tax Certificate and a certified copy of birth certificate (Section 10.3).
For cooperatives, partnerships, and associations, the application must include a certified true copy of the certificate of registration with the CDA, DTI, or SEC depending on the entity type (Section 10.4.1).
For cooperatives and associations, the application must include:
- the list of duly elected officers and members with addresses, certified by the board or association secretary; and
- resolution/minutes of meeting certified by the board or association secretary showing intent to participate (Section 10.4.2).
For partnerships, the application must include a joint undertaking by the partners indicating intent to participate (Section 10.4.3).
Every applicant must submit an Indicative Development Plan jointly prepared by the applicant and DENR staff designated by the PENRO or CENRO (Section 10.5).
The Indicative Development Plan must include strategies/schemes to generate sufficient financial resources to develop the area and must serve as the Initial Environmental Examination for environmental impact assessment purposes and as the development guide for the area (Section 10.5).
Applications must be filed with the CENRO with jurisdiction over the applied area along with all requirements in Section 10 (Section 11.1).
The CENRO receiving office must evaluate completeness; when requirements are complete, it must stamp the application with the date and time of receipt and record it in the receiving office Incoming Logbook (Section 11.2).
When requirements are incomplete, the CENRO must immediately return the application, informing the applicant of deficiencies (Section 11.2).
For mailed incomplete applications, the CENRO must mail the application back within five (5) days from receipt, indicating deficiencies in writing (Section 11.2).
All perfected applications must be pooled with each application bearing its date and time of receipt, and then indorsed to the En Banc Evaluation group created by the RED (Section 11.2).
A verification team comprising representatives from CENRO, PENRO, Regional Office, and LGUs (and the Central Office as the case may be) together with the applicant must conduct final verification, survey, and/or inventory within a verification period not exceeding 5 working days (Section 11.2).
The team must submit its report with specific recommendations to the RED within five (5) days after completion of fieldwork (Section 11.2).
The En Banc Evaluation group must convene at least every fifteen (15) days to evaluate and decide on merits of applications forwarded by various CENROs within the region (Section 11.3).
The En Banc Evaluation group must include representatives of the CENRO and PENRO concerned and staff of specified regional DENR offices designated by the RED, and staff of the EMB Regional Office designated by the EMB Regional Director (Section 11.3).
Other DENR offices may participate when the RED determines participation is needed (Section 11.3).
Evaluation must proceed on a first-in-first-out basis (Section 11.3).
The En Banc Evaluation group must evaluate feasibility of restoring forest/vegetative cover in the shortest time and feasibility of proposed financing strategies/schemes (Section 11.3).
The En Banc group must decide the winning application and endorse it to the RED through the RTD for Forestry for SIFMA awarding; all non-winning applications must be returned in writing to their applicants (Section 11.3).
The RED must refer the winning application to the NCIP for issuance of certification precondition and/or Free and Prior Informed Consent (FPIC) (Section 11.4).
After NCIP certification is received, the RED must approve and award the SIFMA and must furnish copies of the approved SIFMA to the FMB, PENRO, CENRO, and LGU(s) concerned (Section 11.4).

Site selection, publication, and registry

CENRO must identify areas suitable and available for SIFMA sites within its area of responsibility using DENR control maps, LGU Comprehensive Land Use Plans, and other relevant secondary references (Section 6.1).
Identified areas must be within potential or declared production forest areas, preferably but not necessarily in contiguous blocks (Section 6.1).
CENRO must verify that identified areas are not covered by pending applications for or covered by existing forestry tenurial and/or forest use instruments and are not within the exclusions provided under Section 4 (Section 6.1).
CENRO must forward the technical description and preliminary map to the RED (Section 6.2).
The RED must organize a composite team from representatives of the Regional Office, PENRO, CENRO, and concerned LGU(s) to validate the area’s suitability on the ground, including biophysical characteristics and socio-economic factors that may impede or promote development (Section 6.2).
The composite team must determine presence or absence of valid land claims and forest occupants and must conduct consultations with adjoining communities (Section 6.2).
The composite team must finalize: (1) metes and bounds of the SIFMA area based on technical description and final map at a scale of 1:20,000 geo-referenced to PRS 92; (2) LGU Sanggunian endorsement request; and (3) endorsement to the RED for approval (Section 6.2).
LGU endorsement depends on geographic coverage:
- if the area falls within one barangay, endorsement is from the Sangguniang Barangay;
- if the area spans more than one barangay, endorsement is from the Sangguniang Bayan/Sangguniang Panglunsod or all concerned Sangguniang Barangays;
- if the area spans more than one municipality/city, endorsement is from the Sangguniang Panlalawigan or all concerned Sangguniang Bayan (Section 6.3).
After RED approval, copies of the map and technical description must be furnished to the FMB, concerned PENRO, and concerned CENRO for recording in the SIFMA Registry maintained at the FMB, DENR Regional Office, PENRO, and CENRO concerned; the concerned LGU(s) must also be furnished the same materials (Section 6.4).

Minimum agreement terms and required obligations

Every SIFMA must include a provision requiring SIFMA holders to furnish necessary management, technology, and financial services for development and management (Section 12.1).
Every SIFMA must include a provision on consultation and arbitration for interpretation of the SIFMA (Section 12.2).
Every SIFMA must prohibit conversion of the area into other land uses not authorized under the SIFMA (Section 12.3).
Every SIFMA must include pollution prevention and mitigation and environmental protection measures, especially measures to prevent degradation of soil and water resources (Section 12.4).
Every SIFMA must require rehabilitation of open and denuded areas and protection of existing natural forest vegetation (Section 12.5).
Every SIFMA must provide an effective monitoring scheme implemented by the DENR, including periodic assessment of the SIFMA holder’s program; the awarded area must be fully planted within three (3) years from the date of award (Section 12.6).
Every SIFMA must integrate gender concerns, requiring equitable participation of women and youth in project activities and enjoyment of fruits (Section 12.7).
Every SIFMA must include a provision for protection of workers’ rights (Section 12.8).
Every SIFMA must include a commitment to community development (Section 12.9).
Every SIFMA must require the SIFMA holder to plant forest tree species, including rubber and/or non-timber economically valuable species such as rattan and bamboo, in not less than 60% of the area (Section 12.10).
Every SIFMA must require fruit trees in not less than 30% of the area (Section 12.10).
The remaining plantable areas must be devoted to agricultural crops, preferably permanent agricultural crops, for food production purposes (Section 12.10).
All planted trees, crops, and products therefrom must be owned by the SIFMA holder (Section 12.10).
Every SIFMA must require permanent tree cover for areas with slopes of 50 percent or higher and strips of land at least 20 meters wide bordering rivers and streams (Section 12.11).
Every SIFMA must prohibit planting or introducing exotic species untested in Philippine conditions unless DENR clearance is given (Section 12.12).

Incentives and government share

SIFMA holders must be entitled to harvest, sell, and utilize planted trees, crops, and products, except those retained for environmental protection (Section 13.1).
DENR must allow export of logs, lumber, and other forest products harvested from SIFMA areas according to the government allocation system (Section 13.2).
Plantation products derived from the SIFMA area must be exempt from payment of forest charges (Section 13.3).
SIFMA holders must be entitled to appropriate and reasonable compensation for developments in the area if the SIFMA is canceled without cause or for public interest (Section 13.4).
Actual occupants of the program must receive priority in future rules/laws that allow a more permanent tenurial arrangement (Section 13.5).
The SIFMA and improvements may be used as collateral for loans for improvement of the SIFMA area without restrictions, provided there is prior approval of the issuing authority of the SIFMA (Section 13.6).
SIFMA holders who wish to confederate into a larger organization are entitled to technical assistance (Section 13.7).
Government share under a SIFMA must be realized through products/benefits derived from execution of the SIFMA (Section 14).
Government share includes environmental enhancement through protection and rehabilitation of steep/eroded slopes, riverbanks and streambanks and residual forests; conservation of natural forests; accelerated revegetation and regeneration of open areas; and increased carbon sequestration capability of trees (Section 14.1).
Government share includes trees planted for protection purposes that will not be harvested but maintained by the SIFMA holder as government’s share, such as in areas with 50 percent slope or over and along riverbanks and streambanks (Section 14.2).
Government share includes generation of employment (Section 14.3).
Government share includes trails and access road development and improvement (Section 14.4).
Government share includes increased production of fuelwood, food, and other non-wood products (Section 14.5).
Government share includes ready and steady supply of raw materials for wood-dependent industries (Section 14.6).
Government share includes protection of soil, water, wildlife, and existing natural forest resources (Section 14.7).
Government share includes income taxes paid by the SIFMA holder (Section 14.8).
Government share includes rentals for land use with the following schedule:
- free from the first to the fifth year of the SIFMA;
- P300.00 per hectare or fraction thereof from the sixth to the tenth year; and
- P500.00 per hectare or fraction thereof for every year thereafter,
  subject to future adjustments upon review (Section 14.9).

Cancellation grounds, monitoring, and reporting

A SIFMA may be canceled or revoked on any of the following grounds (Section 16):
- failure to develop the area within three (3) years;
- the SIFMA holder is found to be a dummy;
- transfer of rights to another person without DENR knowledge and concurrence;
- conversion of the area or any part to any land use other than tree farming and planting of allowable crops;
- allowing others to enter the area for building residential houses;
- cutting or allowing cutting of naturally grown trees within or adjacent to the SIFMA area;
- refusal to allow entry by duly authorized forest officers or duly authorized governmental officials to SIFMA premises or improvements introduced and used for SIFMA execution;
- obtaining the SIFMA through fraud or misrepresentation or by false or misleading statements;
- conviction of the holder for violation of the Labor Code of the Philippines and other relevant labor laws;
- violation of any SIFMA terms and conditions or of pertinent provisions of forestry laws, rules and regulations;
- abandonment of the area;
- failure to pay rentals or other required fees;
- voluntary surrender of the SIFMA; or
- when public interest so requires.
SIFMAs must be registered with the FMB within fifteen (15) days from issuance (Section 17.1).
The FMB must develop a performance monitoring and reporting system for all SIFMA operations accomplished by the CENRO (Section 17.1).
The PENRO must analyze and consolidate reports and submit them to the FMB through the RED, with comments and recommendations on policy and program implementation (Section 17.1).
The FMB must prepare and submit regular consolidated reports to the Secretary (Section 17.1).
Site monitoring and evaluation must be conducted by a team composed of representatives of the concerned LGU, an NGO, and the CENRO as team leader (Section 17.2).
The status indicator in monitoring must include:
- seedling production by species;
- area and date planted by species;
- environmental protection and mitigating measures;
- progress maps showing area planted by year and species planted;
- photographs of development work; and
- issues/problems in implementation and recommendations to improve project implementation (Section 17.2).

Program management and operational responsibilities

The program is managed and implemented through DENR offices (Section 18).
The FMB serves as the National Coordinating Office and must:
- develop, formulate, and recommend policies, rules, and regulations related to program development and implementation;
- coordinate program implementation and execution;
- evaluate program implementation and provide periodic reports to DENR senior management;
- establish institutional linkages at the national level with government and non-government agencies; and
- keep complete and systematic files and updated information on all SIFMAs issued and related program documents (Section 18.1).
The RED, assisted by the RTD for Forestry, is responsible for program implementation in the region and must approve SIFMA applications, issue cancellation orders, and approve transfers for areas up to 500 hectares (Section 18.2).
The Forest Resources Development Division acts as the regional repository of all data and information, and the RED must submit periodic reports to the Secretary through the FMB on program implementation including SIFMA monitoring and evaluation (Section 18.2).
The PENRO is responsible for effective program implementation in the province, must evaluate periodic reports submitted by CENRO, and must forward reports with findings and recommendations to the RED; the PENRO must maintain a database for all SIFMAs within the province (Section 18.3).
The CENRO is responsible for program implementation within its jurisdiction, in coordination with other concerned government and non-government units; it must handle site identification, processing of applications, and monitoring/evaluation, and must submit periodic reports to the PENRO (Section 18.4).
SIFMA holders must be encouraged to confederate into cooperatives, associations, and/or federations for economies of scale (Section 15).
DENR must work with other government agencies to provide technical assistance, capacity building through skills training, organizational management, and linkage to markets and social services, livelihood, and financing (Section 15).
DENR must explore incentives for SIFMA holders to transfer control over awarded areas to their employees and to actual forest occupants (Section 15).

Repeal and administrative effect

Section 19 repeals DENR Administrative Order No. 24, series of 1996 and amends all other orders or sections inconsistent with DENR Administrative Order No. 30, S. 2004 (Section 19).