AN ACT ESTABLISHING A SPECIAL ECONOMIC ZONE AND FREE PORT IN THE MUNICIPALITY OF SANTA ANA AND THE NEIGHBORING ISLANDS IN THE MUNICIPALITY OF APARRI, PROVINCE OF CAGAYAN, PROVIDING FUNDS THEREFOR, AND FOR OTHER PURPOSES

Nineth Congress
Third Regular Session

[ REPUBLIC ACT No. 7922, February 24, 1995 ]

AN ACT ESTABLISHING A SPECIAL ECONOMIC ZONE AND FREE PORT IN THE MUNICIPALITY OF SANTA ANA AND THE NEIGHBORING ISLANDS IN THE MUNICIPALITY OF APARRI, PROVINCE OF CAGAYAN, PROVIDING FUNDS THEREFOR, AND FOR OTHER PURPOSES

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

Section 1. Short Title. - This Act shall be known as the "Cagayan Special Economic Zone Act of 1995."

Section 2. Declaration of Policy. - It is hereby declared the policy of the government to actively encourage, promote, induce and accelerate a sound and balanced industrial, economic and social development of the country in order to provide jobs to the people especially those in the rural areas, increase their productivity and their individual and family income, and thereby improve the level and quality of their living condition through the establishment, among others, of special economic zones and free ports in suitable and strategic locations in the country and through measures that shall effectively attract legitimate and productive foreign investments.

Section 3. The Cagayan Special Economic Zone and Free Port. -In accordance with the foregoing declared policy, there is hereby established a special economic zone and free port, to be known as the Cagayan Special Economic Zone, hereinafter known as the Zone, which shall cover the entire area embraced by the Municipality of Santa Ana and the islands of Fuga, Barit, and Mabbag in the Municipality of Aparri, Province of Cagayan.

Section 4. Governing Principles. - The Cagayan Special Economic Zone shall be managed and operated under the following principles:

Section 5. Creation of the Cagayan Economic Zone Authority. - A body corporate to be known as the Cagayan Economic Zone Authority, hereinafter referred to as the CEZA, is hereby created to manage and operate, in accordance with the provisions of this Act, the Cagayan Special Economic Zone and Free Port. This corporate franchise shall expire in fifty (50) years counted from the first day of the fifth (5th) calendar year after the effectivity of this Act, unless otherwise extended by Congress.

Section 6. Powers and Functions of the Cagayan Economic Zone Authority. - The Cagayan Economic Zone Authority shall have the following powers and functions:

Section 7. Board of Directors of CEZA. - The powers of the Cagayan Economic Zone Authority shall be vested in and exercised by a Board of Directors, hereinafter referred to as the Board, which shall be composed of fifteen (15) members, to wit:

The chairman and the members of the Board, except the ex officio members, shall be appointed by the President of the Philippines to serve for a term of three (3) years, unless sooner removed for cause or dies or resigns voluntarily. In case of death, resignation or removal for cause, the replacement shall serve only the unexpired portion of the term.

Except for the representatives of the business and investment sectors, no person shall be appointed by the President of the Philippines as a member of the Board unless he is a Filipino citizen, of good moral character and of recognized competence in some relevant fields in business, banking, shipping, business or labor management, port operations, engineering, or law.

Members of the Board shall receive a reasonable per diem which shall not be less than the amount equivalent to the representation and transportation allowances of the members of the Board and/or as may be determined by the Department of Budget and Management: Provided, however, That the total per diem collected each month shall not exceed the equivalent per diems for four (4) meetings. Unless and until the President of the Philippines has fixed a higher per diem for the members of the Board, such per diem shall not be more than Ten thousand pesos (P10,000.00) for every Board meeting.

Section 8. Administrative and Chief Executive Officer. - The President of the Philippines shall appoint a full-time professional and competent administrator and chief executive officer for the Cagayan Economic Zone Authority whose compensation shall be determined by its Board of Directors and shall be in accordance with the revised compensation and position classification system. The administrator as chief executive officer of CEZA shall be responsible to the Board and the President of the Philippines for the efficient management and operation of the Cagayan Special Economic Zone.

Section 9. Capitalization. - The Cagayan Economic Zone Authority shall have an authorized capital stock of two billion (2,000,000,000) no par shares with a minimum issue value of Ten pesos (P10.00) each. The national government shall initially subscribe and fully pay three hundred million (300,000,000) shares of such capital stock. The initial amount necessary to subscribe and pay for the shares of stock shall be included in the General Appropriations Act of the year following its enactment into law and thereafter. The Board of Directors of CEZA may, from time to time and with the written concurrence of the Secretary of Finance, increase the issue value of the shares representing the capital stock of the Cagayan Economic Zone Authority. The Board of Directors of CEZA, with the written concurrence of the Secretary of Finance, may sell shares representing not more than forty per centum (40%) of the capital stock of the CEZA to the general public with such annual dividend policy as the Board and the Secretary of Finance may determine. The national government shall in no case own less than sixty per centum (60%) of the total issued and outstanding capital stock of the CEZA.

Section 10. Supervision. - The Cagayan Special Economic Zone shall be under the direct control and supervision of the Office of the President of the Philippines for purposes of policy direction and coordination, in the meantime that the agency tasked with the coordination of special economic zones is not yet in place.

Section 11. Relationship with the Municipalities of Santa Ana and Aparri. - In case of any conflict between the Cagayan Economic Zone Authority and the municipalities of Santa Ana and Aparri on matters affecting the Cagayan Special Economic Zone other than in defense and security matters, the decision of CEZA shall prevail.

Section 12. Legal Counsel. - The Cagayan Economic Zone Authority and the corporations in which CEZA owns a majority of the issued capital stock shall have its own internal legal counsel under the supervision of the government corporate counsel. When the exigencies of its businesses and operations demand it, the CEZA may engage the services of an outside counsel either on a case to case basis or on a fixed retainer.

Section 13. Auditor. - The Commission on Audit shall appoint a representative who shall be a full-time auditor of the Cagayan Economic Zone Authority and its subsidiaries, and assign such number of personnel as may be necessary to assist said representative in the performance of his or her duties. The salaries and emoluments of the assigned auditor and personnel of the Commission on Audit shall be in accordance with the revised compensation and position classification system. The Commission on Audit shall render an annual report to the President of the Philippines and to Congress on the business activities, transactions and operations of the Cagayan Economic Zone Authority.

Section 14. Separability Clause. - If any provision of this Act shall be held unconstitutional or invalid, the other provisions not otherwise affected shall remain in full force and effect.

Section 15. Repealing Clause. - All laws, executive orders or issuances, or any parts thereof which are inconsistent herewith are hereby repealed or amended accordingly.

Section 16. Effectivity Clause. - This Act shall take effect upon its publication in at least one (1) newspaper of general circulation.

Approved,

This Act which originated in the House of Representatives was finally passed by the House of Representatives and the Senate on December 19, 1994 and February 20, 1995, respectively.

Approved: February 24, 1995

(Sgd.) FIDEL V. RAMOS
President of the Philippines