Policy, objectives, and guiding principles
- The DENR shall accelerate national development while conserving and protecting natural resources and the coastal environment (Section 1).
- The DENR shall adhere to a government policy to tap resources that generate income to support developmental programs (Section 1(a)).
- The DENR shall promote improvement and sustainable use of foreshore areas through effective and efficient management schemes and strategies (Section 1(b)).
- The DENR shall institutionalize a cohesive partnership between government and foreshore lease contract holders to conserve and maintain an ecologically balanced environment without compromising financial benefits from user’s fees and other similar fees (Section 1(c)).
- The DENR shall provide a generally accepted scheme to ensure free access to the area for recreation, educational and sports purposes (Section 1(d)).
Key definitions for foreshore regulation
- Foreshore lands are the part of the shore alternately covered and uncovered by the ebb and flow of the tide (Section 2(a)).
- Foreshore lease application refers to an application covering foreshore lands, marshy lands and other lands bordering bodies of water for commercial, industrial or other productive purposes other than agriculture (Section 2(b)).
- Foreshore lease contract is the agreement between the DENR and the applicant containing specific terms and conditions (Section 2(c)).
- Marshy lands are wetlands whose soil is permanently or protractedly saturated by water and whose vegetation is dominated by grasses or sedges (Section 2(d)).
Coverage and exclusion rules
- The Order covers all foreshore and marshy lands or lands covered with water bordering upon shores or banks of navigable lakes or rivers (Section 3).
- Mangrove areas are excluded from the coverage of this Order (Section 3).
Eligibility, area limits, and applications
- A foreshore lease contract is covered by application filing rules; no foreshore lease contract shall be issued or renewed unless an application has been filed in accordance with prior orders (Section 5).
- Renewal requires that the renewal application be filed at least Sixty (60) days prior to its expiration (Section 5).
Maximum area per lessee
- Any person, corporation, association, or partnership may lease not more than 144 hectares (Section 4).
Who may apply
- Applications may be made by any Filipino citizen of lawful age (Section 7(1)).
- Applications may also be made by corporations, associations or partnerships duly constituted under Philippine laws, provided that at least sixty per centum (60%) of the capital is owned by Filipino citizens (Section 7(2)).
Forms, documents, where and when to file
- Applications must be filed in a form prescribed by the DENR and must contain particulars on:
- the nature of the proposed utilization, development or activity,
- the location and size of the area,
- a sketch, boundaries, and brief description,
- and other information the DENR may require (Section 8).
- Applications are accepted only if properly subscribed and sworn to by the applicant, or by the applicable authorized officer for juridical persons (Section 8).
- If the applicant is a government official or employee, the application must be accompanied by written permission from the department head or head of the agency concerned (Section 8).
- If the applicant is a naturalized Filipino citizen, the applicant must submit:
- a copy of the certificate of naturalization certified by the agency that issued it, and
- a certification by the Office of the Solicitor General that no action has been filed or taken for denaturalization or any action affecting citizenship (Section 8).
- If the applicant is a corporation, association or cooperative, the application must be accompanied by three (3) copies each of specified corporate documents, including:
- articles of incorporation,
- by-laws,
- minutes of the latest organizational meeting electing the present board of directors,
- board resolution electing the present board of directors certified by the Secretary,
- board meeting minutes electing present officers certified by the Secretary,
- and board minutes indicating authority of the officer to file the application on behalf of the entity (Section 8).
- Corporate articles of incorporation must include an undertaking that there will be no transfer of stock/shares that changes the corporation’s citizenship and capital structure; any such transfer must not be effected without DENR Secretary approval upon the recommendation of the Regional Executive Director concerned (Section 8).
- When the applicant uses a name, style, or trade name other than the true name, the application must include three (3) certified copies of the DTI certificate of registration (Section 8).
- If the applicant was already in existence and required to file, the application must include three (3) certified copies of the income tax return for the preceding year (Section 8).
Where to file
- The Foreshore Lease Application (FLA) or renewal must be filed with the Community Environment and Natural Resources Office (CENRO) having jurisdiction over the area (Section 9).
When to file / recording
- Applications must be numbered, stamped, and recorded in the designated book in chronological order, showing the number, date, and time of receipt (Section 10).
Application fees and term of lease
- A new and renewal FLA is accepted only if accompanied by an application fee of P100.00 plus documentary stamp.
- The application fee is non-refundable (Section 11).
- A Foreshore Lease Agreement is for twenty five (25) years and is renewable for another twenty five (25) years (Section 12).
Processing steps and publication requirements
- Processing begins with filing at the CENRO (Section 13).
- The DENR performs preliminary investigation and appraisal of the land applied for (Section 13).
- The DENR conducts a survey of the land (Section 13).
- The DENR recommends approval of the appraisal and requests authority to lease through bidding (Section 13).
- The approving official grants authority to lease through bidding after approving the appraisal (Section 13).
- Publication expenses are paid if the appraised value of land is more than P240.00 (Section 13).
- The notice of right to lease is published in the Official Gazette and/or two newspapers of general circulation (one in English and the other in the local dialect) once a week for six (6) consecutive weeks (Section 13).
- The notice must also be posted for six (6) consecutive weeks at:
- CENRO,
- Municipal/City Halls,
- Barangay Hall,
- and on the land itself (Section 13).
- A public auction is conducted, and the bidder must submit a report of bidding with proof of payment of at least three months user’s fee, and proof of publication and posting (Section 13).
- The process includes an Order of Award (Section 13).
- A lease contract is prepared upon payment of one user’s fee (Section 13).
- The DENR sends the contract to the applicant for signature by the applicant and two credible witnesses and for notarization (Section 13).
- The DENR forwards the contract to the approving official for approval and notarization (Section 13).
- The DENR transmits the approved lease contract to the applicant (Section 13).
Lease contract preparation and execution
- The lease contract preparation requires an original copy of the Official Receipt of the application fee (Section 14).
- The applicant must submit an approved plan and technical description of the land (Section 14).
- The applicant must provide consent of the spouse if married (Section 14).
- If the applicant is a corporation, the contract requires articles of incorporation and certificate of registration from the Securities and Exchange Commission (Section 14).
- The applicant must submit a certification that the land is not needed for public use, from specified heads/offices, including:
- Provincial Tourism Office,
- Philippine Ports Authority, and
- Municipal/District/City Engineer's Office with concurrence of the Regional Director of Public Works and Highways (Section 14).
- The applicant must provide a feasibility study including financial and technical capability to undertake the project (Section 14).
- The applicant must submit an Environmental Compliance Certificate (ECC) (Section 14).
Authorities, bidding, and user-fee computation
- Foreshore lease contracts are issued by officials authorized under DENR AO 98-24 (Series of 1998) (Section 15).
Authority by area size
- The PENRO (Provincial Environmental and Natural Resources Officer) issues contracts for areas up to 1,000 square meters (Section 15).
- The RED (Regional Executive Director) issues contracts for areas more than 1,000 square meters up to 30,000 square meters (Section 15).
- The DENR Secretary issues contracts for areas more than 30,000 square meters (Section 15).
Bidding method
- Leases are made through bidding, and adjudication is made to the highest bidder (Section 16).
- If an applicant made improvements on the land under a permit issued by competent authority, the lease is made through sealed bidding as prescribed in Section 26 of CA 141 (Section 16).
User fees and reappraisal
- The annual user fee must not be less than:
- three per centum (3%) of the value of the land, and
- one per centum (1%) of the improvements (if any),
- computed in accordance with the appraisal and/or re-appraisal under DENR DAO 98-20 (S. 1998) (Section 17).
- The area used and improvements are re-appraised every ten (10) years from the date of approval of the lease contract (Section 17).
- If new improvements/developments are introduced, immediate appraisal is effected (Section 17).
Contract conditions, transfers, and forfeiture
- The lessee may not assign, encumber or sublet lease rights without prior consent issued by the PENRO/RED/Secretary of the DENR (Section 18).
- Any violation of the no-transfer/consent rule voids the contract (Section 18).
- Nothing in this section allows assignment, encumbrance, or subletting of foreshore lands under CA 141 or previous Acts to persons or entities that are not authorized to lease under those Acts (Section 18).
- The lease must not confer the right to remove timber, if any, except as provided under the revised Forestry Laws (Section 18).
- Violation of these conditions causes:
- forfeiture of the lessee’s rights and participation stipulated in the lease contract, and
- liability to immediate dispossession and suit for damages (Section 18).
Administration by NRDC and expiration effects
- Management, administration, and development of foreshore areas, marshy lands, and other lands bordering bodies of water are assigned to the Natural Resources Development Corporation (NRDC) (Section 19).
- NRDC may be authorized to collect user fees due on foreshore leases and other fees accruing from use of foreshore areas and related lands (Section 19).
- Subject to the approval of the Secretary of the DENR, NRDC may utilize sixty per centum (60%) of such collections for:
- total protection of coastal resources and environment,
- advancement of people’s rights to a balanced and healthful ecology,
- coastal biodiversity,
- and other expenses deemed necessary by the Secretary (Section 19).
Transfer of improvements upon expiration
- Upon final expiration, extension, or cancellation of the lease, all buildings and other permanent improvements made by the lessee and those succeeding the lessee (heirs, executors, administrators, successors, assigns) accrue to the DENR (Section 20).
- NRDC may be allowed to manage and administer these properties in accordance with law (Section 20).
Succession of rights under death
- If the applicant dies before issuance of the foreshore lease contract, during the lease term, or while obligations pending toward the Government exist, the applicant’s heirs succeed to the applicant’s rights and obligations.
- The heirs are entitled to the contract subject to compliance with requirements and to being bound to the applicant’s rights and obligations under the law (Section 6).
Repeal and effectivity
- Inconsistent orders, rules, circulars, and other issuances are revoked, amended, or modified (Section 21).
- The Order’s effectivity is triggered by publication, with effect after fifteen (15) days (Section 22).
- The Order was adopted on 10 Aug. 1999 and signed by ANTONIO H. CERILLES, Secretary (adopted and signature block).