Guidelines on the Implementation of the Social Amelioration and Welfare Program for Workers in the Biofuel Industry Utilizing Coconut as Feedstock
DOLE Department Order No. 123-12

October 29, 2012



I. Legal Basis

Section 11 (e) of 'Theprovides that the Department of Labor and Employment (DOLE) shall: (1) Promote gainful livelihood opportunities and facilitate productive employment through effective employment services and regulation; (2) Ensure the access of workers to productive resources and social protection coverage; and (3) Recommend plans, policies and programs that will enhance the social impact of the National Biofuels Program (NBP).

Section 17 of the same Act mandates the National Biofuel Board (NBB) to establish a similar mechanism provided under the

Per authority granted under Joint Administrative Order No. 2008-1 Series of 2008, the Department of Labor and Employment (DOLE) shall be the implementing agency for the development and management of the Social Amelioration and Welfare Program (SAWP) for biofuel workers. In pursuance thereof, the following guidelines on the SAWP for workers in the biofuel industry, using coconut as feedstock, are hereby issued:

II. Definition of Terms

1. Act shall refer to the

2. AEF shall refer to the "Administrative Expense Fund" (5% of the lien) allocated for the implementation of the SAWP in the biodiesel industry utilizing coconut as feedstock;

3. Biodiesel shall refer to Fatty Acid Methyl Ester (FAME) or mono-alkyl esters derived from vegetable oils or animal fats and other biomass derived oils that shall be technically proven and approved by the DOE for use in diesel engines with quality specifications in accordance with the Philippine National Standards (PNS);

4. Biofuel shall refer to bioethanol and biodiesel and other fuels made from biomass and primarily used for motive, thermal and power generation with quality specifications with the PNS and added or blended to petroleum fuels to enhance or alter chemical or physical properties and improve performance/usage of the fuels; caEIDA

5. Biofuel Worker shall refer to a rank and file worker or employee in distillery plant including a farm worker who is directly engaged in the production of feedstock and/or raw materials in the biofuel production;

6. BWSC shall refer to the Bureau of Workers with Special Concerns of the Department of Labor and Employment;

7. Coco Biodiesel Workers shall refer to workers in duly accredited CME plant, CNO mill and farm workers whose crops or products are used in the production of biodiesel (CME);

8. CME shall refer to Coconut Methyl Ester or coco-biodiesel which is derived from coconut;

9. CME plant shall refer to the facility where CME is processed into coco biodiesel;

10. CME producer shall refer to the duly accredited CME producer enjoying benefits from fiscal incentives and tax exemptions provided for under

11. CNO Mill shall refer to the duly accredited coconut mill whose coconut oil was delivered and used for the production of coco biodiesel (CME);

12. Diesel shall refer to refined petroleum distillate, which may contain small amounts of hydrocarbon or non-hydrocarbon additives to improve ignition quality or other characteristics, suitable for compression ignition engine and other suitable types of engines with quality specifications in compliance with the PNS;

13. DOE shall refer to the Department of Energy created under

14. DOLE shall refer to the Department of Labor and Employment created under

15. Farm workers shall refer to workers who are members of duly accredited organizations or cooperatives whose crops are used in the production of coco-biodiesel (CME); aSEDHC

16. Feedstock shall refer to organic sources such as molasses, sugarcane, cassava, coconut, jatropha, sweet sorghum or other biomass used in the production of biofuel;

17. Fund shall refer to the "Social Amelioration and Welfare Program for Biofuel Workers Fund" which will be used to provide assistance and finance the socio-economic programs of the rank and file workers involved in the production of CME and coconut farm workers whose crops are used as feedstock for the production of the CME;

18. NBB or Board shall refer to the "National Biofuel Board" created under Section 8 of the

19. PCA shall refer to the Philippine Coconut Authority created under

20. Regional Office shall refer to the Regional Offices of the Department of Labor and Employment implementing the SAWP in respective regional areas;

21. SAP shall refer to the Social Amelioration Program conceptualized under

22. SAWP shall refer to the Social Amelioration and Welfare Program;

23. Secretary shall refer to the Secretary of the Department of Labor and Employment;

24. TCC shall refer to the Tripartite Consultative Council for SAWP in the Biodiesel Sector of the Biofuel Industry tasked to be the advisory body to the DOLE in the policy and program development and implementation of SAWP.

III. Objectives and Program Components

1. Objectives:

a. Promote gainful livelihood opportunities;

b. Facilitate productive employment through effective employment services and regulations; and cSHIaA

c. Ensure the access of workers to productive resources and social protection coverage.

2. Program Components:

a. Livelihood Assistance;

b. Training and Educational Assistance;

c. Social Protection and Welfare Benefits; and

d. Emergency Assistance.

IV. Coverage

1. Employers who are coco-biodiesel (CME) producers duly accredited under

2. Employees/Workers of CME distillery/plants except managerial employees; workers in coconut oil mills that provide feedstock; coconut farmers and farm workers who are engaged in feedstock for biofuel production.

V. Tripartite Consultative Council

1. The DOLE shall create a Tripartite Consultative Council (TCC) for SAWP in the Biofuel Industry composed of representatives of management, labor and government sectors, which shall serve as the advisory body of the DOLE in policy-making, program implementation and monitoring of the SAWP.

2. Local Tripartite Consultative Council (LTCC) shall likewise be created as may be necessary.

3. The BWSC and the Regional Office concerned shall provide secretariat and technical support to the TCC and LTCCs, respectively.

VI. The BWSC and DOLE Regional Offices

1. Role of the BWSC

a. Assist the Secretary in carrying out the provisions of these guidelines and in developing other related policies, and procedures;

b. Opening and maintaining an interest bearing bank account in an authorized government depository bank under the name of the Department of Labor and Employment, for which SAWP lien will be deposited as a trust in behalf of the coco-biodiesel workers.

c. Monitor and report the status of compliance on the collection and remittance of the SAWP lien including the utilization of SAWP fund;

d. Coordinate, monitor and evaluate the social and economic programs, projects and activities undertaken pursuant to these guidelines;

e. Provide technical assistance and support to the Regional Offices in implementing the SAWP;

f. Develop appropriate manual of operations and procedures as may be necessary for the effective and efficient implementation of the SAWP; and

g. Prepare reports to the Secretary on the program.

2. Role of the Regional Offices CaTSEA

a. Conduct advocacy and information dissemination on relevant policies and projects on the SAWP;

b. Enforce compliance of all concerned CME producers on the collection and remittance of the SAWP lien;

c. Provide technical assistance to the program stakeholders on the development and implementation of social and economic projects;

d. Monitor and evaluate the status of programs and projects implemented at the regional level;

e. Submit to the Secretary, through the TCC, periodic reports and status on SAWP implementation including the required financial reports;

f. Provide secretariat and technical support to the local TCCs, as may be created; and

g. Perform such other functions as may be necessary.

VII. Management of the Lien

1. Nature, Purposes and Components of the Lien

a. Effective Calendar Year 2012, a lien of Php0.05 per liter of CME produced and sold shall initially be imposed and implemented, subject to review every two (2) years for possible adjustment upon the recommendation of the Tripartite Consultative Council.

b. The collected lien shall be used to primarily augment the income and finance the social and economic programs to improve the livelihood and well-being of coco-biodiesel workers directly involved in feedstock and processing into CME as biofuel.

c. The Secretary of DOLE may, upon the recommendations of the TCC, increase the amount of lien upon careful determination of its viability, taking into consideration the declared policy of

d. The amount herein imposed shall be borne by the CME producers. aEcSIH

2. Collection and Remittance of SAWP Lien

a. The SAWP lien shall be borne by all CME producers for the benefit of coco-biodiesel workers.

b. All CME producers are mandated to remit not later than the 7th day after the reference month, the SAWP lien corresponding to every liter of CME produced and sold, to an interest bearing bank account in an authorized government depository bank created for the purpose under the name of the Department of Labor and Employment, which shall be held in trust in behalf of the coco-biodiesel workers. The lien that will be charged therefrom shall be computed based on the actual volume of CME produced as reported to the Department of Energy (DOE).

c. A report of collection and remittance, including statement of bank accounts shall be submitted to the DOLE-BWSC, on a monthly basis, within fifteen (15) days from the end of each reference month.

d. Any interest earned from deposit and authorized investments shall accrue to the Fund which shall be used for programs and projects intended for coco-biodiesel workers.

e. A penalty of ten percent (10%) per month on unremitted lien collection after the lapse of prescriptive period of seven (7) days from the end of the reference month shall be imposed upon non-complying producer. Such penalties for non-remittance of lien collected shall accrue to the Fund.

f. The Department of Labor and Employment, through the BWSC shall administer and manage the Fund, including its income and interests.

3. Fund Allocation, Budget and Audit

a. Ninety five percent (95%) of the Fund shall be allocated for the social and economic programs and projects for coco biodiesel workers to be distributed as follows:

a.1 Fifty per cent (50%) for livelihood assistance (35% for farm workers and 15% for CME plant or coconut oil mill workers); ATcaEH

a.2 Twenty per cent (20%) for training and educational assistance;

a.3 Fifteen per cent (15%) for social protection and welfare benefits; and

a.4 Ten per cent (10%) for emergency assistance.

b. Five per cent (5%) of the Fund shall be for the management and implementation of the SAWP by the BWSC and concerned DOLE Regional Offices and for the operation of TCC or local consultative bodies that may be created;

c. The BWSC, in collaboration with the TCC, shall prepare an annual budget for the above purpose, to be approved by the Secretary; and

d. The said fund shall be audited by the Commission on Audit (COA).

VIII. Mechanics for the Availment and Implementation of Programs

1. Availment of SAWP Benefits:

a. The following may propose socio-economic project for coco-biodiesel workers:

a.1. Accredited and SAWP lien contributing CME producers;

a.2. Duly registered and feedstock-providing coconut oil mill organizations;

a.3. Duly registered workers' organizations; and/or

a.4 The Department of Labor and Employment.

b. The following workers who should be members of registered or duly accredited organizations with the Philippine Coconut Authority, the Department of Labor and Employment or any government registering organization, are eligible to avail of SAWP benefits: HCEaDI

b.1. Workers of the CME distillery/plant except managerial employees;

b.2. Workers of coconut oil mill that provide feedstock; and

b.3. Coconut farmers and farm workers whose crops or products are used as feedstock for coco biodiesel production.

c. The benefits provided under these guidelines shall not in any way reduce any benefit, interest, right or participation already enjoyed by the workers. No amount received by any worker under these guidelines shall be subject to any form of taxation.

d. Before and after receipt of the financial and welfare benefits in the form of cash by the worker, the same cannot be subject to attachment, garnishment, levy or seizure by virtue of or under any legal process except to pay any debt of the worker or whenever expressly authorized in satisfaction of his/her legal obligation.

2. Project Description:

a. Livelihood Assistance shall include a package of direct services to establish or improve and expand workers' existing livelihood assets and transform these into sustainable livelihood and community enterprises that can provide employment and stable income for their families and communities. The services shall include training on entrepreneurship and enterprise development, provision of tools and equipment, materials including initial start up working capital;

b. Training and Vocational Education Assistance shall include skills training and retraining to enhance employability in farm and non-farm enterprises; organizational and community development, financial literacy, network building and other capacity building assistance to promote entrepreneurship and improve self-employment; provision of stipends or allowance to deserving biofuel workers and their dependents for technical vocational education or tertiary assistance toward developing skilled manpower in the industry; aICcHA

c. Social Protection and Welfare Benefits shall include package of services that will promote work improvement, productivity, safety and health: promote basic preventive health care, nutrition and hygiene practices; conduct of medical and dental missions; and other strategies to reduce their vulnerabilities against job loss and/or health risks; it may also include a one-time cash assistance equivalent to one-month contribution for social security and health insurance to jump start voluntary enrollment to SSS and PhilHealth, respectively; and

d. Emergency Assistance shall include assistance against unexpected or catastrophic events such as earthquake, typhoons, landslides, flooding, prolonged drought and other emergencies. It covers the provision of food relief and cash assistance, emergency employment program and other services to eligible workers. Likewise, emergency assistance may also be provided in the event of economic displacement due to mergers, closures or retrenchments for purpose of providing start-up capital for self-employment and enterprise development.

3. Processing, Release, Utilization and Audit of the Project Fund

a. The Regional Offices or units of the DOLE and PCA may provide technical assistance to the proponents in the preparation of project proposals, when necessary or as requested.

b. The RO/BWSC, shall take appropriate action on the project proposals intended to benefit workers in the coco-biodiesel industry.

c. A Memorandum of Agreement (MOA) shall be entered into by the DOLE and the proponent, upon approval of the proposal.

d. The release of the fund to the proponent shall be in accordance with the government accounting and auditing rules and procedures.

e. The proponent shall utilize the SAWP fund received from DOLE exclusively for the intended purpose and in accordance with the guidelines.

f. The proponent shall keep and maintain separate books of account, subsidiary records and combo/savings bank account for SAWP fund received from DOLE which shall be subject to the visitorial audit and examination of the DOLE and/or the Commission on Audit (COA). aDSTIC

g. The proponent shall submit to DOLE the required physical and financial reports on the project.

4. Acquisition and Disposition of Equipment and Machinery

a. No purchase of equipment and machinery shall be allowed, unless authorized in writing by the DOLE Secretary or his/her authorized representative as contained in the approved project proposal.

b. As a general rule, authorized procurement of equipment and machinery shall be made through competitive bidding. All supporting documents relative to the purchase of said items shall form part of the liquidation report to be submitted to the DOLE.

c. In the event that a particular project ceases its operation or the proponent organization disintegrates, any equipment and machinery acquired out of the project fund shall be submitted and turned over by the proponent to DOLE for proper disposition, subject to accounting and auditing rules.

d. The BWSC/concerned DOLE Regional Office shall maintain an inventory of assets, equipment and machinery derived from SAWP fund, subject to prescribed government rules on disposition thereof and execution of Deed of Donation as may be provided in the MOA.

IX. Administrative Expense Fund and Program Management

1. The 5% of the SAWP lien referred to as the Administrative Expense Fund (AEF) to be administered by the DOLE through the BWSC shall be utilized for the management and implementation of the SAWP and operation of the TCC and/or local consultative bodies.

2. The BWSC shall prepare an annual operational budget relative to the implementation of the SAWP for approval of the Secretary.

3. All disbursements thereof shall be made in accordance with existing government auditing rules and regulations.

4. For accounting and management reporting purposes, the BWSC and concerned Regional Offices shall maintain separate books of accounts and other records, such as general and subsidiary ledgers, journals including related financial reports on transactions pertaining to SAWP Fund.

5. In addition to the usual required financial reports, the Regional Offices and other SAWP program partners and implementors shall submit the following reports to the BWSC:

a. Financial Report not later than the 5th day of the month after the reference quarter; and ETDaIC

b. Physical Report not later than the 15th day of the month after the reference quarter.

6. The BWSC shall consolidate said reports and submit program and financial reports to the Secretary, copy furnished the TCC, the NBB and other concerned entities.

X. Monitoring and Evaluation

1. The DOLE, PCA and the DOE shall set up a complementary monitoring system on the CME production and sales including employment and income generated due to coco biodiesel, including the development and maintenance of database on biodiesel workers, towards ensuring timely and accurate collection of the SAWP lien.

2. Reportorial Requirement

2.1 The CME producers shall submit the following:

a. To DOE

a.1. Production volume, price and sales of CMEs, both for local and for export;

a.2. Cost of CME production;

a.3. List of oil companies or third party buyers and respective volume and amount of CME biofuel bought; and

a.4. Other data as may be necessary.

b. To DOLE through the BWSC

b.1. Proof of monthly SAWP lien payment or copy of bank deposit slip;

b.2. List of rank and file workers in CME plant, their position and employment status who are directly involved in the CME production;

b.3. Volume and amount of feedstock used and CME production volume and price;

b.4. Information on feedstock suppliers;

b.5. List of feedstock workers and their corresponding organizations who are eligible to benefit under SAWP;

b.6. Sources of feedstock (barangay, municipality and province) and volume delivered for CME production for biofuel; and

b.7. Other data or information as may be necessary.

2.2 The producers supplying feedstock to Biodiesel Manufacturers/Producers shall submit the following:

a. To PCA TaEIcS

a.1. Monthly and annual volume of feedstock delivered for production to biodiesel manufacturers or CME producers;

a.2. Monthly and annual sales amount of feedstock delivered for production of CME biofuel;

a.3. Sources of feedstock (barangay, municipality and province) used in CME production; and

a.4. Other data as may be necessary.

3. The DOLE through the BWSC/Regional Office shall validate the amount of SAWP lien remittance with records of delivery of feedstock used and CME production reports from DOE records of CME production data as provided by CME producers.

4. The BWSC shall be responsible for the development of monitoring and evaluation instruments for the SAWP lien collection, remittance and releases including projects implemented for coco-biodiesel workers and their dependents.

XI. Penalties and Sanctions/Resolution of Issues

1. As provided for under Section 13 of the ACETID

2. In case of association, partnership or corporation, the penalty shall be imposed on the partner, president, chief operating officer, chief executive officer, directors or officers, responsible for the violation.

3. The DOLE Secretary shall recommend to NBB and DOE to suspend or stop the business operations of concerned biofuel producers for refusal to comply with the provisions of

4. The DOLE Secretary or his/her authorized representative shall recommend to the NBB or DOE the filing of appropriate case against any erring company, organization, person/s for any violation of these guidelines in the appropriate court.

5. Issues arising from the implementation or interpretation of these guidelines shall be submitted to the DOLE Secretary for resolution and appropriate action.

XII. Effectivity

1. Any provision of these guidelines which may be declared null or void shall not affect the validity and effectivity of other provisions thereof.

2. These guidelines shall take effect fifteen (15) days upon publication in a newspaper of general circulation or in the Official Gazette.

Done this 29th day of October 2012 at Manila, Philippines. CIDaTc