AN ACT TO STRENGTHEN THE IRON AND STEEL INDUSTRY AND PROMOTE PHILIPPINE INDUSTRIALIZATION AND FOR OTHER PURPOSES

Eighth Congress

REPUBLIC ACT No. 7103             August 8, 1991

AN ACT TO STRENGTHEN THE IRON AND STEEL INDUSTRY AND PROMOTE PHILIPPINE INDUSTRIALIZATION AND FOR OTHER PURPOSES

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

Section 1. Title. – This Act shall be known and cited as the "Iron and Steel Industry Act."

Section 2. Declaration of Policy. – It is hereby declared a policy of the State to promote industrialization through the immediate establishment of an integrated iron and steel industry that makes full and efficient use of the country's human and natural resources taking into consideration its critical impact on employment, indigenous resources utilization, foreign exchange and balance of payments position. The State shall provide impetus to the growth, promotion, and development of the iron and steel industry as the springboard and basis for launching Philippine industrialization.

Section 3. Statement of Objectives. – It is the purpose of this Act to:

Section 4. Definitions of Terms. – Unless otherwise provided for in this Act:

Section 5. Certified Enterprises. – The Board of Investments (hereinafter referred to as the "BOI") in consultation with other government agencies shall certify as eligible for incentives under this Act enterprises that meet the following conditions:

Section 6. Incentives. – All enterprises certified by the BOI in accordance with the foregoing section of this Act shall be entitled to the following incentives:

Section 7. Other Incentives. – The foregoing, incentives shall be in addition to such other incentives as may be available to the certified enterprise under the Omnibus Investments Code, laws creating export processing zones, and other laws. The enterprises certified under this Act shall be eligible for all other incentives that may be given in the future to similar enterprises.

Section 8. Time Frame. – All fiscal incentives in this Act shall apply for a duration consistent with the provisions of the Omnibus Investments Code: provided, that in less developed areas, the duration shall be for fifteen (15) years. All other incentives embodied in this Act shall apply for a period of fifteen (15) years from the effectivity of this Act.

Section 9. Divestment. – All enterprises in the iron and steel industry with foreign equity shall be encouraged to undertake measures that will gradually increase Filipino participation in their businesses by taking in Filipino partners, electing Filipinos to the board of directors, implementing transfer of technology to the Filipinos, generating more employment for the economy and enhancing skills of Filipino workers.

Section 10. Penalties for Smuggling. – Upon the operation of the smelting plants, the following penalties shall be imposed upon any person who shall smuggle, fraudulently import or bring goods into the Philippines that constitute the intermediate or final product of the manufacturing activity described in Section 5 (b) of this Act, such as pig iron and steel, whether in the form of ingots, slabs, blooms, billets, bars, rods, wires, coils, strips, plates, sheets or otherwise, and whether in raw form or galvanized, painted, treated, recast, rolled, finished or processed by any other means, or who shall receive, conceal, buy or in a manner facilitate the transportation, concealment, or sale after importation of such products:

If the offense is committed by a juridical entity, its president and/or other officials responsible thereforee shall be subject to the penalty prescribed above. If the offender, or the president/official in cases where the offense was committed by the juridical entity, is an alien, he shall be deported without further proceedings in addition to the penalty herein prescribed and shall, if naturalized, be automatically denaturalized from the date his sentence becomes final.

Section 11. Preferred Use. – Subject to the availability of the locally manufactured products of comparable quality, price and terms of delivery, the use of iron and steel products manufactured in the Philippines shall be specified for use in all infrastructure, industrial and other construction projects: (a) undertaken by the Government, including all agencies and subdivisions thereof, and all government-owned and controlled corporations; or (b) financed in whole or part by loans denominated in foreign currency or secured by guarantees issued by non-Philippine nationals; and (c) benefiting from loans, grants, or other form of official development assistance extended by foreign government or multilateral agencies.

Section 12. Promotion of Steel Industry Linkages. – The Investment Coordinating Committee of the NEDA Board shall formulate a plan for the development and establishment of upstream and downstream industries identified with the iron and steel industry within one (1) year from the effectivity of this Act. It shall also encourage and promote other uses of intermediate iron and steel products, especially those that will engage in the production of basic household tools, precision tools, engines, ship buildings and those produced by domestic enterprises enjoying benefits under this Act.

In addition, enterprises utilizing the products produced by integrated iron and steel mills in the Philippines shall likewise enjoy the benefits granted to said iron and steel mills, provided that the BOI approval is previously obtained.

Section 13. Technology and Manpower Development. – The Department of Trade and Industry, and Science and Technology shall initiate technology dissemination programs and studies in order to advance the levels of technology used in domestic enterprises. The training systems and specific expertise and skills shall be made available in agencies like the Metals Industry Research and Development Center (MIRDC), the National Manpower and Youth Council (NMYC) and other appropriate agencies to support and service the iron and steel industry.

Section 14. Community Programs. – The certified enterprise shall undertake community programs in the locality where it operates. These programs shall include the establishment of a center that would promote steel industry-related enterprises nationwide and grants to schools that would develop their teaching capability and upgrade technical courses relevant to the steel industry.

Section 15. Implementing Guidelines. – Within sixty (60) days from the approval of this Act, the BOI shall issue implementing guidelines for purposes of the incentives provided above.

Section 16. Separability Clause. – Should any provision under this Act be deemed invalid, the remainder of this Act not otherwise affected thereby shall remain in full force and effect.

Section 17. Repealing Clause. – All laws, orders, issuances, rules and regulations or parts thereof inconsistent with this Act are hereby repealed or modified accordingly.

Section 18. Effectivity Clause. – This Act shall take effect upon its publication in two (2) newspapers of general circulation or in the Official Gazette.

Approved: August 8, 1991.