M a n i l a
PRESIDENTIAL DECREE No. 1402
CREATING THE PHILIPPINE NATIONAL IRON AND STEEL CORPORATION, DEFINING ITS POWERS AND FUNCTIONS, PROVIDING FUNDS THEREFOR, AND FOR OTHER PURPOSES.
WHEREAS, the availability at all times of iron and steel products at reasonable cost is essential for the promotion and the national welfare, economic progress and industrialization;
WHEREAS, it is imperative for the Government to take a more active role in the iron and steel industry in order to so assure an adequate or increased supply at all times of such iron and steel products at reasonable cost.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution, do hereby create the Philippine National Iron and Steel Corporation, and further order and decree the following, as part of the law of the land, to be the Charter of the Philippine National Iron and Steel Corporation;
Section 1. Title. This Decree shall be known as the "Charter of the Philippine National Iron and Steel Corporation."
Section 2. Declaration of Policy. It is hereby declared to be the policy of the Government to promote the welfare, economic progress and industrialization of the country through the effective development of the iron and steel industry. Accordingly, the creation of an organized corporate entity is necessary to assure an adequate or increased supply at all times of iron and steel products at reasonable cost to all users for the accelerated economic growth and industrialization of the country and the region.
Section 3. Creation, Name, Domicile and Term. To carry out the above policy, there is hereby created a body corporate to be known as the Philippine National Iron and Steel Corporation, hereafter referred to as the Corporation."
The principal office of the Corporation shall be determined by its Board of Director. It may also establish such offices, branches, agencies or correspondents or other units in the Philippines or abroad as its business operations may require.
The Corporation shall have a term of fifty years from its creation hereof, which shall be deemed renewed for an equal period unless sooner dissolved by law.
Section 4. Purposes and Powers. The Corporation shall have the following purposes and powers;
(a) To invest in the iron and steel industry as well as in any activity related to iron or steel operations, and to set up or form business subsidiaries under the Corporation Law or through the acquisition of the controlling interests of existing corporations, which may be necessary or contributory to the economic development of the country and the region, or important in the public interest, or deemed convenient or incidental to the carrying on of any of the purposes of the Corporation, or which will promote the well-being of the Corporation;
(b) To provide and maintain an adequate or increased supply at all times of iron and steel products at reasonable cost for domestic requirements and exports;
(c) To reduce the excessive dependence of the country and the region on imports of iron and steel products;
(d) To foster conditions of iron and steel production conducive to a balanced and sustainable growth of the economy and the region.
Subject to governmental policy, the Corporation shall also have the following purposes and powers;
(a) To enter into contracts with any person or entity, domestic or foreign, and with governments for the undertaking of the varied aspects of the iron or steel industry, under such terms and conditions at it may deem proper and reasonable;
(b) To purchase, hold, alienate, mortgage, pledge or otherwise dispose of the stocks, bonds, and other securities or evidences of indebtedness of any other corporation, association, firm or entity, domestic or foreign, and, while the owner of holder thereof, to exercise all the rights and powers of ownership, including the right to vote thereon for any purpose;
(c) To hold lands and acquire rights over mineral lands as may be necessary to accomplish its purposes;
(d) Subject to existing rights, to lease or contract for unappropriated public waters and foreshore and offshore areas, which, in the decision of the President of the Philippines, is essential to the exercise of the purposes of the Corporation and the same shall be granted to the Corporation by the proper government agency concerned under such terms and conditions as may be mutually agreed upon between them;
(e) To enter into any lawful arrangements for sharing profits, joint venture, union, interests, reciprocal concession or cooperation with any person or corporation, association, partnership, syndicate or entity located in or organized under the laws of any authority in any part of the world in the carrying on of any business which the Corporation is authorized to carry on, or any business or transaction deemed necessary on of any of the purposes of the Corporation;
(f) To acquire assets, real or personal, or interest therein, and encumber or otherwise dispose of the same as it may deem proper and necessary in the conduct of its business;
(g) To establish and maintain for its own use such communication system, whether by radio, telegraph or any other manner, without the need of a separate franchise therefor;
(h) To determine its organizational structure, and the number and salaries of its officers and employees, in accordance with existing laws, rules and regulations.
(i) To design, write, prepare, publish and display, in any manner, advertisements, publicity or promotional devices of all kinds for itself or for others which are necessary or convenient for the accomplishment of the purposes of the Corporation;
(j) To exercise the right of eminent domain as may be necessary for the purposes for which the Corporation is created, subject to existing provisions of laws;
(k) Subject to payment of the proper amount, to enter private lands for the purpose of conducting studies in connection with its purposes, powers and functions;
(l) To acquire easement over public and private lands necessary for the purpose of carrying out any work essential to its purposes, powers and functions, subject to payment of reasonable considerations;
(m) To adopt a code of by-laws to complement this charter;
(n) To adopt and use a corporate seal which shall be judicially noticed; to sue and be sued; and
(o) To perform such corporate acts and exercise such corporate functions authorized by the Corporation Law not inconsistent with this decree and such other acts necessary for the attainment of the purposes and objectives herein specified.
The preceding clause shall be construed and interpreted as both purposes and powers, and the matters expressed in them shall, except as otherwise expressly provided, but in no wise limited by reference to or inference from the terms of any other clause, but shall be regarded as independent purposes and powers, and the enumeration of specific purposes and powers shall not be construed to limit or restrict in any manner the meaning in general terms of the general powers of the Corporation, nor shall the expression of one thing be deemed to exclude another not expressed, if it be of like nature.
Section 5. Subsidiaries. The controlling interest of the business subsidiaries of the Corporation shall, within a reasonable period from their incorporation or the purchase of their controlling interest by the Corporation, be transferred for value to the private sector: Provided, That in consideration of the fact that the business subsidiaries of the Corporation shall be transferred to or controlled by the private sector within a reasonable period as aforementioned and that these business subsidiaries are formed under the Corporation Law, such business subsidiaries shall not be subject to any law, decree, executive order, circular, rule or regulation or restriction which pertains to government-owned or controlled corporations nor shall the said subsidiaries be subject to the Civil Service Law nor the Rules and Regulations or the standards and salary scales prescribed by the Office of Compensation and Position Classification, in addition the officers and employees of these business subsidiaries of the Corporation shall not be covered by the Government Service Insurance System or by any law, decree, executive order, circular, rule or regulation relating to leaves of absences, retirement privileges, regular working hours, or any other government personal benefits.
Section 6. Governing Body. The Corporation shall be governed by a Board of Directors, hereinafter referred to as the "Board," which shall be composed of seven (7) members, namely, the Secretary of Industry, the Secretary of Finance, the Secretary of National Defense, the Chairman of the Development Bank of the Philippines, the Solicitor General, the Budget Commissioner, or their duly authorized representatives, and the President of the Corporation.
The President of the Corporation shall be elected from among the members of the Board.
The Secretary of Industry and the President of the Corporation shall be the Chairman and Vice-Chairman, respectively, of the Board. In the absence of the Chairman, the Vice-Chairman shall act as presiding officer of the Board.
The members of the Board shall act as such for the duration of the term of the Corporation.
The Board shall formulate the policies which may be necessary or incidental to carry out the business of the Corporation or to the exercise of its express and implied powers or for the accomplishment of any of its purposes.
All the members of the Board of their duly authorized representative, shall receive a per diem of Five Hundred Pesos for each board meeting actually attended by them; Provided, That such per diem shall not exceed One Thousand Pesos during any month for each member: Provided, Further, that no other allowance or any form of compensation shall be paid them, except actual expenses in traveling to and from their residences to attend board meetings.
The Board shall meet as often and at such dates, times and places as may be necessary to transact all matters as shall properly come before them and require their action as the Board. The meetings of the Board may be called by the President of the Corporation or by the Chairman or by five members of the Board as and when necessary. At least five members of the Board shall constitute a quorum and all decisions of the Board shall require the concurrences of the majority of the quorum.
Section 7. Capital Stock. The Corporation shall have a capital stock divided into Two Hundred Million shares with a par value of P10 each to be subscribed, paid for and voted as follows:
(a) One Hundred Sixty -Five Million Eight Hundred Thousand shares shall be originally subscribed and paid for the Government of the Republic of the Philippines.
(b) The remaining shares of stock may be subscribed and paid for by the Government of the Republic of the Philippines or by government financial institutions.
The voting power pertaining to shares of stock subscribed by the Government of the Republic of the Philippines shall be vested in the President of the Philippines or in such person or persons as he may designate.
The voting power pertaining to shares of stock subscribed by the government financial institutions shall be vested in them.
Section 8. Powers and Duties of the President. The President, who shall be the chief executive of the Corporation shall have the following powers and duties;
(a) To prepare the agenda for the meetings of the Board, and to submit for the consideration of the Board such policies and measures as he believes necessary to carry out the purpose and objectives of this Decree;
(b) To execute, administer and implement the policies and measures approved by the Board;
(c) To direct and supervise the operation and administration of the Corporation;
(d) To appoint and fix the compensation for all the employees, except the officers, of the Corporation;
(e) To represent the Corporation in all dealings with other offices, agencies and instrumentalities of the government and with all persons and other entities, public or private, domestic or foreign; and
(f) To exercise such other powers and perform such other duties provided in the by-laws and as may be vested in him by the Board.
Section 9. Legal Counsel. The Solicitor General shall be the ex officio legal counsel of the Corporation and he may designate a representative for that purpose.
Section 10. Auditor. The Chairman of the Commission on Audit shall appoint a representative who shall be the Auditor of the Corporation and such personnel as may be necessary to assist said representative in the performance of his duties. The budget of the office of the Auditor shall be appropriated by the Corporation, subject to the approval of the Board. Such representative shall render a semestral report on the financial condition and operations of the Corporation to the Chairman of the Commission on Audit and the Board. The Chairman of the Commission on Audit shall submit to the President of the Philippines an annual report covering the financial conditions and operations of the Corporation. These auditing reports shall contain a statement of the resources and liabilities including earnings and expenses, reserves and profits, as well as losses, bad debts and such other facts which, under the auditing rules and regulations, are considered necessary to accurately describe the financial conditions and operations of the Corporation; Provided, That before such reports are made, the Corporation shall be given reasonable opportunity to examine the reports and make exceptions to any criticisms of the Auditor of the Corporation or the Chairman of the Commission on Audit, as the case may be, to point out, explain or answer any inaccuracies therein, if any, and to file a statement which shall be appended by the Auditor of the Corporation and the Chairman of the Commission on Audit in their respective reports.
The auditors of the business subsidiaries of the Corporation shall be appointed by their respective Boards of Directors.
Section 11. Applicability of Civil Service law and Other Laws. The Corporation and its officers and employees shall be subject to the Civil Service Law, rules and regulations, as well as to all laws, decrees executive orders, circulars, rules or regulations pertaining to government-owned or controlled corporations and relating to government personnel benefits.
The provisions of the Corporation Law shall apply to the Corporation and its business subsidiaries insofar as not inconsistent with the provisions of this Decree.
Section 12. Loans; Guarantees; Issuance of Bonds. Subject to the provisions of existing laws, rules and regulations, the Corporation is hereby authorized to contract loans, credits or any indebtedness from time to time from foreign governments, or any financial institutions or fund sources or any other entities, foreign or domestic, on such terms and conditions as it shall deem appropriate for the accomplishment of its purposes and to enter into and execute agreements and other documents specifying the said terms and conditions as well as do or perform any such acts as may be necessary in connection therewith: Provided, That the total loans, credits or indebtedness which the Corporation is hereby authorized to contract shall in no case exceed the amount of One and a Half Billion Philippine Pesos from domestic sources and the amount of Four Hundred Million US Dollars, or the equivalent in other foreign currencies, from foreign sources, outstanding at any one time, exclusive of interests.
The Republic of the Philippines, through the President of the Philippines, or his duly authorized representative, is empowered to guarantee, absolutely and unconditionally, as primary obligor and not as surety merely, the payment of the loans, credits and indebtedness contracted by the Corporation, as herein before provided, in accordance with Republic Act Numbered Sixty-One Hundred Forty-Two, as amended, as well as the performance of all or any of the obligations undertaken by the Corporation pursuant to loan agreements entered into with foreign governments or any international financial institutions or fund sources.
The provisions of any law to the contrary notwithstanding, any financial institution owned or controlled by the Government of the Republic of the Philippines, other than the Central Bank, the Government Service Insurance System and the Social Security System, is hereby empowered to guarantee also acceptance credits, loans, transactions, undertakings, or obligations of any kind which may be incurred by the Corporation, whether directly or indirectly in favor of any person, association or entity, whether domestic or foreign.
The Corporation, upon the recommendation of the Secretary of Finance in consultation with the Monetary Board and with the approval of the President of the Philippines, is hereby empowered to issue bonds or other securities, which the President of the Philippines may authorize to be exempt from any or all taxes or to be guaranteed by the Government, to finance its corporations.
Section 13. Appropriation. The sum of One Billion Six Hundred Fifty-Eight Million Pesos (P1,658,000,000) is hereby set aside initially and appropriated from the General Funds not otherwise appropriated, and the same shall be applied to the full payment of the subscription of the Government of the Republic of the Philippines referred to in Section 7, paragraph (a), of this Decree. Other subsequent requirements shall be contained in the Annual Appropriation Act. Releases from this appropriation shall be in accordance with a schedule to be determine by the Secretary of Finance, subject to the approval of the President.
Section 14. Transfer of Properties, Rights and Interests. To enable the Corporation to effectively carry out its purpose and powers under this Decree, the Development Bank of the Philippines and the Secretary of Finance, the latter acting on behalf of the Government of the Republic of the Philippines, are hereby directed and authorized to transfer, assign and convey to the Corporation such properties, rights and/or interests as may be required by the Corporation in connection therewith, under terms and conditions to be mutually agreed upon among them.
Section 15. Reports. The Corporation shall, within three months after the end of every fiscal year, submit its annual report to the President of the Philippines. It shall likewise submit such periodic or other reports as may be required of its from time to time.
Section 16. Miscellaneous. All heads of Departments, Agencies, Offices and instrumentalities of the National Government as well as political subdivisions are hereby enjoined to extend full cooperation and assistance to the Corporation in the implementation of the provisions of this Decree.
Section 17. Separability Clause. Should any provision of this Decree be held unconstitutional, no other provision hereof shall be affected thereby.
Section 18. Repealing Clause. All laws, decrees, executive orders, administrative orders, rules or regulations inconsistent herewith are hereby repealed, amended or modified accordingly.
Section 19. Effectivity. This Decree shall take effect immediately.
Done in the City of Manila, this 6th day of June, in the year of Our Lord, nineteen hundred and seventy-eight.
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