AN ACT ESTABLISHING THE REGULATORY FRAMEWORK FOR THE SAFE OPERATIONS OF THE LIQUEFIED PETROLEUM GAS INDUSTRY, DELINEATING THE POWERS AND FUNCTIONS OF VARIOUS GOVERNMENT AGENCIES, DEFINING AND PENALIZING CERTAIN PROHIBITED ACTS

Eighteenth Congress
Third Regular Session

Begun and held in Metro Manila, on Monday, the twenty-sixth day of July, two thousand twenty one.

[ REPUBLIC ACT NO. 11592, October 14, 2021 ]

AN ACT ESTABLISHING THE REGULATORY FRAMEWORK FOR THE SAFE OPERATIONS OF THE LIQUEFIED PETROLEUM GAS INDUSTRY, DELINEATING THE POWERS AND FUNCTIONS OF VARIOUS GOVERNMENT AGENCIES, DEFINING AND PENALIZING CERTAIN PROHIBITED ACTS

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

CHAPTER I
GENERAL PROVISIONS

Section 1. Short Title. – This Act shall be referred to as the “LPG Industry Regulation Act”.

Section 2. Declaration of Policy. – It is hereby declared the policy of the State to protect the interests of end-consumers, ensure their general welfare, and establish standards of conduct for business. Towards this end, the State shall:

Section 3. Scope and Application. – This Act shall apply to the following:

Section 4. Definition of Terms. – For purposes of this Act, the following terms shall be defined as stated below:

CHAPTER II
ROLE OF GOVERNMENT AGENCIES

Section 5. Lead Agency. – The DOE shall be the primary government agency responsible for the implementation and enforcement of this Act. The DOE shall regulate, supervise, and monitor the LPG industry and all LPG industry participants to ensure compliance with the health, safety, security, and environmental standards, the applicable PNS, and other accepted codes and standards as adopted by the DTI as PNS.

Section 6. Powers and Functions of the DOE. – In addition to its mandate under Republic Act No. 7638, otherwise known as the “Department of Energy Act of 1992”, and Republic Act No. 8479, otherwise known as the “Downstream Oil Industry Deregulation Act of 1998”, the DOE shall have the following powers and functions:

Section 7. Powers and Functions of the DTI. – In addition to its mandate under existing laws such as Republic Act No. 4109, the DTI shall have the following powers and functions:

Section 8. Powers and Functions of the DILG. – In addition to its mandate under existing laws, the DILG shall have the following powers and functions:

Section 9. Powers and Functions of the BFP. – In addition to its mandate under existing laws, the BFP shall strictly implement the provisions of Republic Act No. 9514, otherwise known as the “Fire Code of the Philippines of 2008”, and its revised implementing rules and regulations, on the manufacturing, storage, handling, use, and transportation of LPG including fire safety devices and the issuance of all relevant permits and certificates: Provided, That the guidelines for the transportation of LPG and LPG pressure vessels shall be formulated together with the DOE and LTO, pursuant to Section 37 of this Act. The BFP shall also undertake with the DOE, DTI, and DILG information, education, and communication activities pursuant to Section 6 of this Act.

The BFP shall issue appropriate guidelines and regulations governing the fire safety of LPG facilities and safety measures in the manufacture, storage, handling, use and transportation of LPG.

Section 10. Powers and Functions of the LTO and the Land Transportation Franchising and Regulatory Board (LTFRB). – In addition to their mandates under existing laws, the LTO and LTFRB, whichever is applicable, shall issue the appropriate guidelines and regulations governing the following:

Section 11. Powers and Functions of Maritime Industry Authority (MARINA). – In addition to its mandate under existing laws, the MARINA shall, upon coordination with the DOE and in consultation with public and private stakeholders, issue the appropriate guidelines and regulations governing marine vessels transporting LPG and filled and unfilled LPG pressure vessels.

Section 12. Powers and Functions of LGUs. – In addition to their mandate under existing laws, LGUs shall have the following powers and functions:

Section 13. Powers and Functions of the PNP and Other Law Enforcement Agencies. – In addition to their mandates under existing laws, the PNP and other law enforcement agencies shall assist the DOE, upon its request, in the exercise of its powers pursuant to Section 6 of this Act including inspections of LPG facilities and motor vehicles transporting LPG in bulk or in LPG cylinders and cartridges.

Section 14. Powers and Functions of the DENR. – In addition to is mandate under existing laws, the DENR shall issue, together with the DOE, guidelines for the disposal of LPG, LPG contaminated water, and LPG pressure vessels.

CHAPTER III
RESPONSIBILITIES OF LPG INDUSTRY PARTICIPANTS

Section 15. LPG Industry Participants. – In addition to the provisions under this Act, an LPG industry participant shall:

Section 16. Bulk Supplier. – In addition to the provisions under this Act, a bulk supplier shall:

Section 17. Bulk Distributor. – In addition to the provisions under this Act, a bulk distributor shall:

Section 18. Hauler. – In addition to the provisions under this Act, a hauler shall:

Section 19. Refiller. – In addition to the provisions under this Act, a refiller shall:

Section 20. Trademark Owner or Marketer. – In addition to the provisions under this Act, a trademark owner or marketer shall:

Section 21. Dealer. – In addition to the provisions under this Act, a dealer shall:

Section 22. Retail Outlet. – In addition to the provisions under this Act, a retail outlet shall:

CHAPTER IV
REGISTRATION, LICENSES, AND PERMITS

Section 23. Registration Prior to Commencement of Construction. – In addition to other permits under existing laws, bulk suppliers, refillers, and bulk consumers shall register with the DOE before commencement of construction of terminals and refilling plants.

Section 24. License to Operate. – In addition to other permits, certifications, clearances, and licenses under existing laws such as Republic Act No. 9514 and Republic Act No. 4109, every LPG industry participant shall secure a license to operate for a specific activity, which shall be specific to the site, plant, or outlet, prior to the commencement of commercial operation, and shall publicly post such license to operate in its business establishment or premises. In the event that the LPG industry participant intends to engage in a new activity outside of its current license to operate, it shall secure another license to operate for such new activity. All LPG industry participants shall conduct business only with LPG industry participants with a valid license to operate for the specific activity they are engaged in.

The DOE shall have the exclusive authority to issue the license to operate. It shall be valid for a period of three (3) years or any such period as may be determined by the DOE.

Any person already engaged in any activity as defined herein, at the time of the effectivity of this Act, shall obtain a license to operate within six (6) months from the promulgation of this Act’s implementing rules and regulations.

Section 25. Registration of Bulk Consumers and Centralized LPG Piping Systems. – A bulk consumer, and the owner and operator of a centralized LPG piping system shall register with the DOE: Provided, That a bulk consumer, and the owner or operator of a centralized LPG piping system who engages in another activity as an LPG industry participant shall be required to secure another license to operate for such activity: Provided, further, That registration does not exempt the bulk consumer, and the owner and operator of the centralized LPG pipping system from compliance with quality and safety requirements and standards as provided under this Act and existing laws such as Republic Act No. 9514 and Republic Act No. 4109.

Section 26. DTI Certificates and Licenses. – An LPG industry participant who engages in the importation, requalification, manufacture, or repair of LPG pressure vessels, whichever is applicable, shall obtain the applicable certificates and licenses from the DTI prior to the commencement of commercial operation, and as may be determined by the DTI.

Any LPG industry participant already engaged in the importation, requalification, manufacture, or repair of LPG pressure vessels, whichever is applicable, at the time of effectivity of this Act shall secure the required certificates and licenses from the DTI within six (6) months from the promulgation of this Act’s implementing rules and regulations.

CHAPTER V
AUTO-LPG

Section 27. Auto-LPG Container Importers and Manufacturers, Auto-LPG Conversion Shops, and Auto-LPG Dispensing Stations. – Any LPG industry participant who imports or manufactures auto-LPG containers, engines, and accessories, installs auto-LPG containers, engines, and accessories, retrofits motor vehicles with auto-LPG containers, or operate an auto-LPG conversion shop shall comply with the requirements, quality and safety standards, rules, and regulations issued by the DTI and LTO pursuant to Sections 7 and 10 of this Act and other pertinent government agencies including the BFP.

Any LPG industry participant who constructs and operates an auto-LPG dispensing station shall comply with the requirements, quality and safety standards, rules, and regulations issued by the DOE pursuant to Section 6 of this Act and other relevant government agencies including the BFP.

CHAPTER VI
OWNERSHIP OF LPG PRESSURE VESSELS

Section 28. Ownership of LPG Cylinders. – The trademark owner whose permanent mark or durable marking, whichever is applicable, appears on the LPG cylinders with water capacity of less than or equal to one (1) liter shall comply with the durable marking requirements as may be determined by the DOE and DTI. The ownership shall apply to LPG cylinders sold, subject of exchange or swapping, or which are in the possession of any refiller, bulk distributor, marketer, dealer, retail outlet, or requalifier, or such other person duly authorized by the trademark owner.

The trademark owner who owns the LPG cylinder shall have the obligation to ensure that all of its LPG cylinders comply with all the required quality and safety standards including requalification, and other rules and regulations before they are released for distribution: Provided, That receipt by the DOE of a notice or report from the trademark owner, as verified by the DTI, regarding any lost, stolen, or missing LPG cylinder shall prima facie relieve the trademark owner of the obligation to ensure the quality and safety of such LPG cylinder.

Section 29. Ownership of LPG Cartridges. – The trademark owner whose durable shall be permanently installed inside the motor vehicle and shall be an inherent and integral part of the vehicle. The ownership of the auto-LPG container shall be with the owner of the motor vehicle to which the auto-LPG container shall ensure its compliance with the quality and safety standards, rules, and regulations pursuant to the provisions of this Act and existing laws.

CHAPTER VII
LPG CYLINDER EXCHANGE, SWAPPING, AND IMPROVEMENT PROGRAMS

Section 31. LPG Cylinder Exchange and Swapping Program. – Within six (6) months from the effectivity of this Act’s implementing rules and regulations, the DOE shall, together with the DTI and in consultation with all LPG industry participants, consumer groups, and other public and private stakeholders, formulate and publish an LPG Cylinder Exchange and Swapping Program, which shall include, among others, the procedure and timeline for exchange, swapping and buyback of LPG cylinders, and the establishment of accredited LPG cylinder swapping centers.

The LPG Cylinder Exchange and Swapping Program shall be governed by the following principles:

The DOE shall, together with the DTI and in coordination with LPG industry participants, create a task force including public and private stakeholders to assist in the implementation of the LPG Cylinder Exchange and Swapping Program.

Section 32. LPG Cylinder Improvement Program. – Within six (6) months from the effectivity of this Act’s implementing rules and regulations, the DOE shall, together with the DTI and in consultation with all LPG industry participants, consumer groups, and other public and private stakeholders, formulate and publish an LPG Cylinder Improvement Program which shall include, among others, the entities responsible for establishing and the amount to be set aside for the LPG Cylinder Improvement Program fund, the allowed uses and entities authorized to utilize the fund, and the procedures for access and audit of the fund.

The LPG Cylinder Improvement Program shall be governed by the following principles:

The DOE and DTI shall determine the transition period for the permanent marking of all generic LPG cylinders and LPG cylinders without a trademark or trade name in circulation in the market which were not illegally imported and are not defective, injurious, unsafe, and dangerous: Provided, That such transition period shall not be beyond three (3) years from the time of the effectivity of the LPG Cylinder Improvement Program. The DOE shall, together with the DTI and in coordination with LPG industry participants, create a task force including the public and private stakeholders to assist in the implementation of the PLG Improvement Program.

CHAPTER VIII
MONITORING AND ENFORCEMENT MECHANISMS

Section 33. Reports and Disclosures to the DOE. – In requiring LPG industry participants to submit written or electronic forms or reports pursuant to Section 6 of this Act, the DOE shall be prohibited from sharing, disclosing, or making available to the public and other LPG industry participants any information, document, plan, and report constituting trade secrets, proprietary data, and other legitimate commercial information which are confidential or privileged in nature.

Section 34. Central Database of LPG Industry Participants. – The central database, which shall be open to the public, created by the DOE pursuant to Section 6 of this Act shall be updated on a monthly basis. It shall include the following information:

CHAPTER IX
LPG CYLINDERS AND CARTRIDGES

Section 35. Declaration of LPG cylinder or Cartridge as Uncertified, Defective, Injurious, Unsafe, or Dangerous. – When the DOE finds, motu propio or upon complaints of any person, that an LPG cylinder or cartridge is uncertified, generic, substandard, defective, injurious, unsafe, or dangerous, whichever is applicable, it shall, after due notice, issue the appropriate order for its immediate confiscation, recall, seizure, impoundment, or prohibition from public sale or distribution: Provided, That duly requalified generic LPG cylinders already in the market at the time of the effectivity of this Act which were not illegally imported shall be allowed until the lapse of the transition period as may be determined by the DOE and DTI pursuant to Section 32 of this Act. The concerned LPG cylinder or cartridge owner shall be afforded an opportunity to be heard from the issuance of such order, for the purpose of determining the propriety of the confiscation, recall, seizure, impoundment, or prohibition from public sale or distribution of the LPG cylinders or cartridges. The DOE shall terminate the proceedings and make a final determination on whether the LPG cylinder or cartridge is uncertified, generic, substandard, defective, injurious, unsafe, or, dangerous, whichever is applicable, within thirty (30) calendar days from the issuance of the order for confiscation, recall, seizure, impoundment, or prohibition from public sale or distribution.

LPG-filled cylinders or cartridges which are confiscated, recalled, seized, or impounded and found by the DOE to pose an imminent threat to the public or in danger of exploding shall be disposed of without serving prior notice to the owners thereof. The DOE shall notify the owner of such fact within five (5) calendar days after such disposition.

Section 36. LPG in Cartridges. – It shall be unlawful for any person to refill an LPG cartridge or sell, trade, or distribute cartridges not designed or intended for LPG, or noncompliant with existing PNS.

CHAPTER X
TRANSPORT OF LPG

Section 37. Transport of LPG. – All motor vehicles utilized in the transportation of bulk LPG and filled and unfilled LPG cylinders and cartridges shall comply with the guidelines of the DOE, LTO, and BFP pursuant to Sections 6, 10 and 9, respectively, of this Act.

CHAPTER XI
PROHIBITED ACTS AND PENALTIES

Section 38. Prohibited Acts. – Any natural or juridical person, whether an LPG industry participant or otherwise, shall be prohibited from the following acts:

Section 39. Underfilling. – The following acts undertaken by the following natural or juridical persons shall constitute underfilling of LPG pressure vessels:

If applicable, a broken, tampered, absent, or removed seal, or an LPG pressure vessel that does not have the proper seal attached to it, shall be considered prima facie evidence of underfilling.

Section 40. Illegal Refilling. – The following acts shall constitute illegal refilling of LPG pressure vessels:

Section 41. Penalties. – Any person found in violation of the following acts shall have the following administrative and criminal penalties:

Section 42. Violations by Juridical Entities. – If the violation is committed by a corporation, partnership, association, or other juridical entity, the penalty of imprisonment shall be imposed on the responsible directors or officers thereof, and the lack of corporate personality cannot be raised as a defense in case the juridical entity is unregistered. Any new juridical entity formed by persons or agents of such persons previously found in violation of the prohibited acts under this Chapter for the third time shall be permanently disqualified from engaging in any activity as an LPG industry participant.

Section 43. Suspension, Cessation, and Closure. – Nothing in this Chapter shall preclude the DOE from ordering the suspension or cessation of the operation of the facility, or the closure thereof until such time that the mandatory requirements or corrective measures directed by the DOE have been met.

Section 44. Initiation of Administrative Action by the DOE. – An administrative action shall be initiated by the DOE through the issuance of a show cause order to the LPG industry participant, giving the latter the opportunity to explain in writing within the period prescribed by the DOE from receipt of the order: Provided, That the entire administrative proceeding shall not exceed sixty (60) calendar days from the issuance of a show cause order to the final resolution by the DOE. The DOE shall have the discretion to conduct a hearing pertaining to the violation, or to impose an outright penalty based on the merits of the written explanation.

Section 45. Imposition of Preventive Suspension Order. – Without prejudice to other administrative remedies, the DOE may, during the pendency of an administrative proceeding, suspend the operations of the concerned business of an LPG industry participant subject of the proceeding within a maximum period of forty-five (45) calendar days to prevent undue interference in the ongoing investigation and tampering of evidence in accordance with the implementing rules and regulations of this Act.

Section 46. Impoundment and Disposition of Impounded Evidence. – Without prejudice to Section 35 of this Act, the DOE shall, with the assistance of law enforcement agencies pursuant to Section 13 of this Act, be authorized to impound prohibited LPG, LPG pressure vessels, ancillary equipment, and motor vehicles used in the transportation of LPG and LPG-filled pressure vessels as evidence of the violation under this Act. The final disposal of the impounded items shall be subject to the final resolution of the DOE or the court having jurisdiction over the prohibited act.

CHAPTER XII
FINAL PROVISIONS

Section 47. Sharing of Fines and Penalties. – The city or municipality where the principal place of business of an LPG industry participant is located shall be allotted a forty percent (40%) share of the proceeds from fines and penalties collected by the DOE from the concerned LPG industry participant: Provided, That the remaining sixty percent (60%) shall be utilized by the DOE to implement the provisions of this Act including information dissemination, capacity building, and research and development.

Section 48. Utilization of LGU Share. – The LGU shall utilize its share from the fines and penalties collected pursuant to Section 47 of this Act exclusively for the purpose of transporting, hauling, storing, decanting, and disposing confiscated LPG, LPG pressure vessels, and ancillary equipment.

Section 49. Permits and Licenses. – The procedure for all permits and licenses issued pursuant to this Act shall be governed by Republic Act No. 11234, otherwise known as the “Energy Virtual One Stop Shop Act”. The EVOSS Steering Committee shall streamline the permitting process for the LPG industry and shall continue its mandate under Republic Act No. 11234.

Section 50. Establishment of Dedicated Office. – The DOE shall establish a dedicated office for the effective implementation of this Act. The organizational structure and staffing complement shall be determined by the Secretary of the DOE, in consultation with the Department of Budget and Management, and in accordance with existing civil service rules and regulations. The budgetary requirements shall be taken from the current appropriations of the DOE. Thereafter, the funding for the dedicated office shall be included in the annual General Appropriations Act.

Section 51. Appropriations. – The amounts necessary for the sustainable implementation of this Act shall be included in the annual General Appropriations Act.

Section 52. Implementing Rules and Regulations. – The DOE, shall, together with the DTI, and in consultation with the concerned government agencies and stakeholders, including consumer groups, promulgate the implementing rules and regulations of this Act within sixty (60) days from its effectivity. All guidelines, regulations, and other issuances mandated to be promulgated in this Act shall be issued within sixty (60) days from the promulgation of this Act’s implementing rules and regulations except in the case of the LPG Cylinder Exchange and Swapping Program and the LPG Cylinder Improvement Program which shall be promulgated pursuant to Sections 31 and 32 of this Act.

Section 53. Transition Period. – Unless otherwise provided in this Act, the DOE shall, upon prior consultation with the LPG industry participants and other government agencies and taking into account data obtained from PLG industry participants and other sources, determine the appropriate transition period for compliance by all LPG industry participants with the objectives of this Act: Provided, That such transition period shall not be beyond six (6) months from the effectivity of this Act’s implementing rules and regulations.

Section 54. Congressional Oversight. – The Joint Congressional Energy Commission shall exercise oversight powers over the implementation of this Act.

Section 55. Construction and Interpretation. – Any doubt in the interpretation of any provision in this Act shall be interpreted in favor of the interest of the end-consumers and the general public.

Section 56. Separability Clause. – If, for any reason, any chapter, section, or provision of this Act shall be declared unconstitutional, illegal, or invalid, such parts not affected thereby shall remain in full force and effect.

Section 57. Repealing Clause. – All laws, decrees, executive orders, proclamations, and administrative regulations, or parts thereof inconsistent herewith are hereby repealed or modified accordingly.

Section 58. Effectivity. - This Act shall take effect immediately after fifteen (15) days after its publication in the Official Gazette or in a newspaper of general circulation.

Approved,

This Act which is a consolidation of Senate Bill No. 1955 and House Bill No. 9323 was passed by the Senate of the Philippines and the House of Representatives on August 2, 2021 and August 4, 2021, respectively.

Approved: OCT 14 2021

(SGD.) RODRIGO ROA DUTERTE
President of the Philippines