AN ACT CREATING a SPECIAL ECONOMIC ZONE AND FREE PORT IN THE CITY OF ZAMBOANGA CREATING FOR THIS PURPOSE THE ZAMBOANGA CITY SPECIAL ECONOMIC ZONE AUTHORITY, APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES

Nineth Congress
Third Regular Session

[ REPUBLIC ACT No. 7903, February 23, 1995 ]

AN ACT CREATING a SPECIAL ECONOMIC ZONE AND FREE PORT IN THE CITY OF ZAMBOANGA CREATING FOR THIS PURPOSE THE ZAMBOANGA CITY SPECIAL ECONOMIC ZONE AUTHORITY, APPROPRIATING 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 Zamboanga City Special Economic Zone Act of 1995.

Section 2. Declaration of Policy. - It is hereby declared the policy of the State to encourage and promote the attainment of a sound and balanced industrial, economic and social development in the country through the promotion of private enterprises. Towards this end, the State shall endeavor to establish special economic zones in suitable and selected areas in the country where enterprises will be given incentives to create an environment conducive to business. This shall be the means to attract local and foreign investors, generate employment opportunities, and encourage the regional dispersal of industries.

Section 3. Creation of the Zamboanga City Special Economic Zone. - in accordance with the foregoing policy and subject to the concurrence of the city government of Zamboanga affected by the zone, there is hereby established a special economic zone in the City of Zamboanga to be known as the Zamboanga City Special Economic Zone, hereinafter referred to as the ZAMBOECOZONE. the specific metes and bounds of the ZAMBOECOZONE shall be more particularly defined in a presidential proclamation that shall be issued for this purpose.

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

Section 5. Creation of the Zamboanga City Special Economic Zone Authority. - Subject to the concurrence of the local government units that will be affected by the creation of the ZAMBOECOZONE, there is hereby created a body corporate to be known as the Zamboanga City Special Economic Zone Authority, hereinafter referred to as the ZAMBOECOZONE Authority, which shall manage and operate the ZAMBOECOZONE, in accordance with this Act. It shall be organized within one hundred eighty (180) days after the effectivity of this Act.

Section 6. Principal Office. - the ZAMBOECOZONE Authority shall maintain its principal office in the City of Zamboanga, but it may establish branches and agencies within the Philippines and abroad as may be necessary for the proper conduct of its business.

Section 7. Powers and Functions of the ZAMBOECOZONE Authority. - the ZAMBOECOZONE Authority shall have the following functions :

Section 8. Non-profit Character of the ZAMBOECOZONE Authority. - the ZAMBOECOZONE Authority shall be non-profit and shall devote the use of its returns from capital investments, as well as excess revenues from its operations, for the development, improvement, and maintenance and other related expenditures of the ZAMBOECOZONE Authority to pay its indebtedness and obligations and in furtherance and effective implementation of the policy provided in this Act. in consonance with this, the ZAMBOECOZONE Authority is hereby declared exempt from the payment of all taxes, duties, fees, imposts, charges, costs and service fees in any court or administrative proceedings in which it may be a party.

The foregoing exemptions may however be entirely or partially lifted by the President of the Philippines upon the recommendation of the Secretary of Finance, not earlier than five (5) years from the effectivity of this Act, if the President shall find the Authority to be self-sustaining and financially capable by then to pay such taxes, customs duties, fees and other charges after providing for debt service requirements of the ZAMBOECOZONE Authority and of its projected capital and operating expenditures.

Section 9. Board of Directors of the ZAMBOECOZONE Authority. -The powers of the ZAMBOECOZONE Authority shall be vested in and exercised by a Board of Directors, hereinafter referred to as the Board, which shall be composed of the following.

The city's congressional representative, the mayor of the City of Zamboanga and the representative of the city council shall serve as ex officio voting members of the Board.

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 six (6) 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 member of the Board unless he is a Filipino citizen, of good moral character and of recognized competence in some relevant fields of business, banking, shipping, business or labor management, port operations, engineering or law.

Members of the Board shall receive a reasonable per diem which shall be fixed by the President of the Philippines once every six (6) years for every Board meeting: 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 diems 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 10. Powers and Duties of the Chairman-Administrator. -The chairman-administrator shall have the following powers and duties:

Section 11. Promotion of Industrial Peace. - One representative each from the Department of Labor and Employment (DOLE), labor sector, cultural minorities, business and industry sectors shall formulate a mechanism under a social pact for the enhancement and preservation of industrial peace in the City of Zamboanga within thirty (30) days after the effectivity of this Act.

Section 12. Capitalization. - the Zamboanga City special 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 the ZAMBOECOZONE Authority 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 ZAMBOECOZONE Authority. the Board of Directors of the ZAMBOECOZONE Authority, 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 ZAMBOECOZONE Authority 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 ZAMBOECOZONE Authority.

Section 13. Supervision and Coordination of Development Plans. - for purposes of policy direction and coordination, the ZAMBOECOZONE Authority shall be under the direct control and supervision of the Office of the President, in the meantime that the agency tasked with the coordination of special economic zones is not yet in place.

Section 14. Relationship with the Local Government Units. -In case of any conflict between the ZAMBOECOZONE Authority and the City of Zamboanga on matters affecting the ZAMBOECOZONE other than defense and security matters, the decision of the ZAMBOECOZONE Authority shall prevail.

Section 15. Auditing. - the Commission on Audit shall appoint a representative who shall be a full time auditor of the ZAMBOECOZONE Authority and assign such number of personnel as may be necessary to assist said representative in the performance of his/her duties. the salaries and emoluments of the assigned auditor and personnel shall be in accordance with pertinent laws, rules and regulations.

Section 16. 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 17. Repealing Clause. - All laws, executive orders or issuances, or any parts thereof which are inconsistent herewith, are hereby repealed or amended accordingly.

Section 18. 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 he 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 23, 1995

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