| Republic of the Philippines DEPARTMENT OF LABOR AND EMPLOYMENT Intramuros, Manila | Tere Than Jobo! : Fs decent jobo » A. ‘AB Mums Department Order No. 222 Series of 2021 REVISED GUIDELINES ON THE IMPLEMENTATION OF THE SOCIAL AMELIORATION AND WELFARE PROGRAM FOR WORKERS IN THE BIOFUEL INDUSTRY, UTILIZING MOLASSES AS FEEDSTOCK Pursuant to Section 11 (e) and 17 of the Republic Act No. 9367, otherwise known as ‘The Biofuels Act of 2006’; the Joint Administrative Order No.2008-1 Series of 2008, and upon the recommendation of the Tripartite Consultative Council (TCC) in the Bioethanol Sector of the Biofuels Industry, the Department of Labor and Employment (DOLE) hereby issue this Revised Guidelines on the Implementation of the Social Amelioration and Welfare Program (SAWP) for Workers in the Biofuel Industry, Utilizing Molasses as Feedstock: 1. Definition of Terms For purposes of this Guidelines, the following definitions shall apply: 1. Act —refers to Republic Act No. 9367, otherwise known as the Biofuels Act of 2006. 2. AEF- refers to the “Administrative Expense Fund” (5% of the lien) allocated for the implementation of the SAWP in the biofuel industry, utilizing molasses as feedstock. 3. Beneficiary Organization - refers to the Bioethanol Plant Workers’ Group, Association, Cooperative or Union from Department of Energy (DOE) accredited and SAWP lien contributing bioethanol producers/facilties/plants. 4. Bioethanol — refers to ethanol (C2H2OH) produced from feedstock and other biomass that shall be technically proven and approved by the DOE for use in gasoline-fed engines, including hydrous ethanol, with quality specifications in accordance with the PNS, and for higher blends beyond the 10% blend, the DOE shall issue appropriate PNS. 5. Bioethanol Producer- refers to any person or entity engaged in the production of bioethanol fuel and duly accredited by the DOE, as provided under RA 9367. 6. Biofuel — refers to bioethanol and biodiesel and other fuels made from biomass and primarily used for motive, thermal and power generation with quality specifications in accordance with the PNS, and added or blended to petroleum fuels to enhance or alter the chemical or physical properties and improve performance / usage of the fuels. 7. Bioethanol Plant — refers to the area of bioethanol production which includes, but not limited to the processing plant waste management facilities and other facilities directly related to bioethanol production 8. Bioethanol Plant Worker -refers to worker or employee directly hired by the bioethanol plant, regardless of employment status. Page 1 of 149. Bureau ~ refers to the Bureau of Workers with Special Concerns (BWSC) of the Department of Labor and Employment created under Executive Order No. 366 series of 2007. 10. Delivery Receipt — refers to the document that evidences the quantity of molasses delivered to the bioethanol plant as feedstock in the production of bioethanol. 11. DOE - refers to the Department of Energy created under Republic Act No. 7638, as amended. 12. DOLE — refers to the Department of Labor and Employment created under Executive Order No. 126, as amended. 13, Feedstock — refers to the organic sources such as molasses, sugarcane, cassava, coconut, jatropha, sweet sorghum or other biomass used in the production of biofuels. 14, Financial Benefit Fund (FBF) — refers to the eighty percent (80%) of the SAWP Lien collection to be given as financial/cash benefit to qualified bioethanol plant workers, including any and all incomes or interests derived therefrom. 15. Lien — refers to the levy collected from the production of bioethanol utilizing molasses as feedstock, to support the Social Amelioration and Welfare Program for bioethanol plant workers. 16. Liter Ethanol or LE — refers to the volume of bioethanol produced from sugarcane or molasses. 17. Lkg ~ refers to a unit of measurement which is equivalent to 50 kilograms. 18, Managerial Employee — refers to one vested with power or prerogative to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees, pursuant to Article 219, Chapter Il, Book V of the Labor Code Philippines, as amended. 19, Partner Organization - refers to government organization qualified to be proponent for the implementation of the Socio-Economic Project component of the SAWP. 20.PNS — refers to Philippine National Standards consistent with Section 26 of RA No. 8749, otherwise known as the “Philippine Clean Air Act of 1999”. 21.Regional Office — refers to the Regional Office of DOLE including its Field and Provincial Offices. 22. Socio-Economic Program Fund (SEPF)- refers to the fifteen percent (15%) share of the SAWP lien allocated for the socio-economic programs, including any and all incomes or interests derived therefrom. 23. SRA - refers to the Sugar Regulatory Administration of the Department of Agriculture created under Executive Order No. 18 s 1986. 24. TCC —refers to the Tripartite Consultative Council for SAWP in the Bioethanol Sector of the Biofuel Industry tasked to be the advisory body to the DOLE in the policy and program development and implementation of SAWP. Page 2of 1425. Trust Receipt Agreement or TRA — refers to the instrument establishing the responsibilities and obligations of the parties in the release and distribution of financial benefit fund signed by DOLE Regional Office and Bioethanol Producer. 26. Plant Workers’ Group, Association, Cooperatives or Union — refers to any workers’ group, association, union or cooperative composed of plant workers duly registered with DOLE, CDA or anyregistering government agencies. ll. Objectives 1. Promote productive and gainful livelihood opportunities for bioethanol workers including their dependents; 2. Facilitate productive employment through effective employment facilitation services and regulations; 3. Ensure equitable access of bioethanol workers to productive resources and social protection coverage; and 4, Capacitate and enhance the skills of bioethanol workers and their qualified dependents thru trainings and vocational/ college education assistance. lll. Coverage 1. All Bioethanol Producers who own and operate a bioethanol plant, utilizing molasses as feedstock, and duly accredited by the DOE, as provided under RA 9367 2. Eligible to avail SAWP related program, projects or services are the following: 2.4. All bioethanol plant workers, regardless of their employment status. 2.2. Dependents of bonafide members of plant workers’ group, association, cooperative or union. Excluded to avail SAWP benefits are managerial-level employees, as defined herewith. IV. Tripartite Consultative Council 1. The DOLE shall reconstitute every three (3) years sectoral representatives, composed of representatives of management, labor and government sectors, to the Tripartite Consultative Council for SAWP in the Bioethanol Sector of the Biofuel Industry (TCC SAWP), which shall serve as the advisory body of the Department in policy-making, program implementation and monitoring of the SAWP for bioethanol workers. 2. Local TCs shail likewise be created, as may be necessary. 3. The BWSC and the concerned Regional Office shall provide secretariat and technical support to the TCC and LTCC, respectively. V. The BWSC and DOLE Regional Offices 1. Role of the BWSC a. Assist the DOLE Secretary in carrying out the provisions of this Guidelines and 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 biofuel 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 this guidelines; Page 3 of 142. e. Provide technical assistance and support to the Regional Offices in implementing the SAWP for bioethanol workers; f, Develop appropriate manual of operations and procedures as may be necessary for the effective and efficient implementation of the SAWP; and 9. Prepare reports to the DOLE Secretary on the program. Role of the DOLE Regional Offices a. Conduct advocacy and information dissemination on relevant policies and projects on the SAWP for bioethanol workers; b. Enforce compliance of all concemed bioethanol producers on the following:1) collection and remittance of the SAWP lien; and 2) release, distribution and liquidation of the FBF including the recovery of any undistributed FBF. c. Provide technical assistance to the program stakeholders on the development. and implementation of social and economic projects; 4. Monitor and evaluate the status of programs and projects implemented at the regional level; e. Submitto the DOLE Secretary, through the TCC, periodic reports and status on SAWP implementation including the required financial reports; Provide secretariat and technical support to the local TCCs as may be created; and g. Perform such other functions as may be deemed necessary. VI. Management of the Lien 1 Nature and Purpose Alien shall be imposed and collected for the implementation of Social Amelioration and Welfare Program (SAWP) for workers engaged in the bioethanol production using molasses as feedstock. It shall be primarily utilized to improve the socio- economic well-being of the bioethanol plant workers and their dependents. 2. Fund Allocation, Budget and Audit a. Eighty (80%) percent of the Fund shall be allocated for Financial Benefit of the qualified bioethanol plant workers. b. Fifteen percent (15%) of the Fund shall be allocated for the Socio-Economic Program Fund (SEPF) for the benefit of the bioethanol plant workers and their qualified dependents. c. Five percent (5%) of the Fund shall be allocated for Administrative Expense Fund (AEF). The AEF shall be used for the management and implementation of SAWP by DOLE and for the operation of TCC, or local consultative bodies, as may be created. The BWSC shall prepare an Annual SAWP-AEF Budget, in consultation with the TCC, for the Secretary of Labor and Employment’s consideration and approval Page 4of 14Further, the Secretary of Labor and Employment, upon due consultation with the resident COA Auditor, DOLE Financial Management Service (FMS), and DOLE Internal Audit Service (IAS) and upon the recommendation of the TCC, may use any savings from the current Annual SAWP-AEF Budget to fund mechanisms and projects geared at incentivizing efforts made to promote SAWP and/or in setting up a Recognition and Merits Systems that advocates inclusiveness amongst all stakeholders, duty bearers, and/or implementers (i.e conduct of annual recognition awards to best performing DOLE RO implementing SAWP) and allows for equitable access to SAWP resources. The same shall be subject to the usual government accounting rules and regulations and shall be post-audited by the Commission on Audit (COA). 3. Amount Lien a. The SAWP lien on molasses-based bioethanol shall be equal or equivalent to the lien share of sugar mill imposed on raw sugar produced as provided under Republic Act 6982 or the Sugar Amelioration Act of 1991. To ensure equivalent collection of SAWP lien, conversion of the amount of SAWP lien collected per 50 kilogram (Lkg) of raw sugar produced shall be computed and multiplied by 35% or percentage share of nearest operating sugar mill district as. industry practice. The following computation shall be observed to determine the equivalent SAWP. lien per liter of molasses-based bioethanol produced: Equivalent Lien/liter = Lien on raw sugar produced x No. of Lkg per TC x 35% share No. of Liter Ethanol per TC bioethanol plant = Php 7.90513 Lkg x 1.70Lka per TC x 35% share of bioethanol 70 LE per TC plant = Php 0.19 per liter on bioethanol x 35% share of bioethanol plant = Php 0.07 per liter of molasses-based bioethanol 4. Collection and Remittance of the SAWP Lien a. Collection The SAWP lien of Php 0.07 per liter of molasses-based ethanol shall be borne by DOE accredited bioethanol producers upon sale to Oil Companies as may be evidenced by delivery receipt (DR) and official receipt (OR). b. Remittance i. 80% of the SAWP lien for the Financial Benefit Fund (FBF) Within thirty (30) days upon receipt of the statement of account from the DOLE, the bioethanol producer shall remit the 80% of the SAWP lien due or FBF in a Joint Bioethanol Plant-DOLE account in an interest-bearing account with an authorized government depository bank under the name of: Page 5 of 14“FBF FOR THE BIOETHANOL PLANT WORKERS IN TRUST TO THE BIOETHANOL PRODUCER *X" In exceptional cases, where there are no accessible authorized government depository bank accounts within the area where the bioethanol plant is located, the bioethanol producer shall open and maintain FBF bank account in a reputable private bank located nearest to the bioethanol plant, subject to the approval of the DOLE Regional Office. By opening of FBF account, the bioethanol producer agrees that the DOLE, as trustor, shall have the authority to inquire into said account, to have access to, and to have certified copies of, all records and supporting documents of all transactions relating to or affecting such account, including deposits and withdrawals from such account, waiving for this purpose, any rights of the bioethanol producers under the Bank Secrecy Law. ji, 20% of the SAWP lien for the Socio-Economic Program Fund (SEPF) and Administrative Expense Fund (AEF) ‘The Bioethanol Producer shall directly remit to the DOLE-SAWP Bioethanol Collection Account maintained at the Land Bank of the Philippines, Intramuros Branch, 20% of the Monthly SAWP Lien due from Molasses- based Bioethanol sold to Oil Companies, not later than thirty (30) days upon receipt of the statement of account from DOLE. ©. Trust Agreement Each Bioethanol Producer shall engage in a trust agreement with the DOLE, using the prescribed form, which shall take effect upon signing of parties involve and shall remain effective until terminated by DOLE. Every remittance deposited to the FBF bank account of such bioethanol producer, shall be covered by the trust agreement. The trust agreement shall stipulate, among other, that every such deposit to the FBF bank account is received by the bioethanol producer in trust for the worker- beneficiaries, and that thebioethanol producer shall release the FBF to the worker-beneficiaries in accordance with the provisions in this Guidelines. 4d. Penalty Rate imposed to the producers for the Non-Remittance of SAWP Lien Dues A penalty rate of three percent (3%) per month on unremitted SAWP lien shall be imposed to defaulting bioethanol producer after thirty (30) days upon receipt of the statement of account from the DOLE.Any deficiency in the payment of ‘SAWP lien dues shall be subject to the monthly penalty rate prescribed in this section, until the full payment is made thereof. Page 6 of 14Such penalties for non-remittance of SAWP lien dues to FBF and DOLE SAWP Bioethanol Collection Account shall accrue to the Financial Benefit and Socio- Economic Program for the benefit of bioethanol workers and their qualified dependents. Accrued penalties to the SEPF component shall be distributed equally to its sub-program components. fe. Required Report For purpose of monitoring, the Bioethanol Producer shall prepare and submit the following reports to the BWSC and concerned DOLE Regional Office: i. Monthly Report of Molasses Based Bioethanol Production, Sales, Lien Collection and Remittances, within sixty (60) working days from the end of the reference month. if using different classes of molasses, a separate report for each class of molasses shall be submitted ii, Validated deposit slip for every remittance of SAWP lien il, Notarized copy of Trust Receipt Agreement f, Program Monitoring and Supervision i. Complementation Scheme on Monitoring SAWP Lien Collection The DOLE shall establish with the Sugar Regulatory Administration (SRA), the Department of Energy (DOE) and other concerned implementing agencies, a complementation scheme for the proper monitoring of molasses purchased and processed for ethanol production, and for the timely collection of the SAWP lien. ii, Manual of Operation The DOLE thru the BWSC shall formulate the Social Amelioration and Welfare Program Operation Manual, including the Accounting and Management Reporting Systems of the SAWP-Related Funds, pursuant to Section 17 of RA 9367. Consultation with the stakeholders may be conducted, as necessary. VII. Mechanics for the Availment and Implementation of Programs 1. Financial Benefit Program a. Coverage All bioethanol plant workers who are directly hired by the bioethanol plant, regardless of their employment status shall be covered by the financial benefit program. b. Distribution, Liquidation and Processing of Undistributed FBF i. The bioethanol producers shall directly distribute, on a yearly basis, the FBF to their respective bioethanol workers. ii, The FBF distribution to bioethanol workers shall be completed within one (1) month from the scheduled date of distribution as agreed upon by the bioethanol producer and plant worker's group/ association/ cooperative or union. In no case the release of the FBF shall be authorized, if the bioethanol producer fails to submit the required special payroll covering the previous year's FBF fund release. Page 7 of 14After the lapse of the prescribed distribution period, the concerned DOLE Regional Office in coordination with the concerned bioethanol plant shalll be authorized to undertake Special Distribution of FBF under any of the following conditions: 1. Workers who failed to claim their FBF during the scheduled distribution period and whose whereabouts are already established. 2. Upon receipt of notice or proof! information of impending closure of the bioethanol plant. iv. The Undistributed Financial Benefit Fund (UFBF) shall be deposited by the bioethanol producer to FBF account within fifteen (15) days after the end of one (1) month scheduled date of distribution and shall remain to be deposited within the period of three (3) months. Payment of financial benefit assistance by bioethanol producer to worker-claimants shall be drawn from the deposited UFBF. v. The UFBF, including interests and penalties earned therefrom shall be remitted by the bioethanol producer to the DOLE Regional Office within fifteen (15) days after the end of three (3) months period. vi. The DOLE Regional Office shall hold in trust the UFBF for a period of three (3) years from the date of receipt of remittance from the bioethanol plant. ‘The UFBF shall be deposited in a separate interest-bearing account with the authorized government depository bank in the name of the DOLE RO-UFBF to pay financial benefit claims filed within the period of three (3) years. The processing of UFBF claims shall be subject to submission of the following requirements: 4. Duly accomplished application form; 2. Employer's Certification that the claimant whose name appear on the financial benefit payroll and failed to claim his/her financial benefit assistance during the scheduled distribution period; 3. Identification Card for identity verification. vil. The DOLE Regional Office shall furnish the concerned bioethanol producer a semi-annual report on the status of UFBF account. A quarterly analysis report on the status of UFBF account shall be submitted to the DOLE Secretary through the BWSC. cc. Formula in Determining the FBF i. The formula in computing the FBF share of individual worker shall be as follows: Step.1 Determine the Factor FACTOR = ‘OTAL FBF* FOR COVERED WORKERS TOTAL BASIC ANNUAL PAYROLL OF COVERED WORKER Step 2. Determine the Share of the Worker SHARE OF COVERED WORKER = TOTAL BASIC ANNUAL SALARY X. FACTOR OF INDIVIDUAL WORKERS. * Total F8F shall include interests and penalties accrued within covered period Page 8 of 14Explanation 1. Covered workers represent all the workers during the year. 2. Total annual payroll of covered workers represents all basic wages, the financial benefit of the worker shall be computed based on the maximum credit of Php 2,000.00 per month. ii. In case the monthly earnings of a plant worker is less than the amount indicated above, his/ her actual earings shall be the basis for the computation. Documentary Requirements for Validation and Verification of FBF Distribution i. The bioethanol producer shall prepare three (3) copies of prescribed FBF payroll signed by covered workers indicating therein the amounts of bonuses they actually received and duly certified by the employer or his authorized representative. The employer shall certify in the F8F payroll that none of the employees receiving the financial benefit assistance is a managerial level employee. ii, For liquidation of FBF distributed amount, a copy of FBF payroll together with the list of workers who failed to claim their financial benefit assistance shall be submitted to the nearest DOLE Regional Office or Provincial Office within fifteen (15) calendar days after the end of one (1) month of the scheduled distribution of FBF. ili, For liquidation of undistributed FBF, a copy of UFBF Remittance Report together with the following documents shall be submitted to DOLE Regional or Provincial Office within the period of fifteen (15) days after the end of the three (3) months period of maintaining the said fund to FBF account, subject to periodic review of the process cycle time: 1. Validated deposit slip/ Cash/ Check, if any,representing undistributed financial benefit fund; and 2. List of workers who failed to claim their financial benefit and their corresponding financial benefit shares. iv. The bioethanol producer shall retain a copy of the FBF payroll in addition to his or her regular payroll and/ or records for validation andi or verifications. The said copy shall be maintained by the bioethanol plant for five (5) years together with other documentary requirements. . Books and Records The bioethanol producers shall maintain their respective journals and ledgers to record the transactions pertaining to the FBF, including undistributed FBF. The said record shall be subject to regular examination by the Department. Publication of Undistributed Financial Benefit Fund The DOLE Regional Office shall make at least three (3) publications annually. The publication shall be made through announcements in radio stations in the area, local newspapers or posting on the DOLE Bulletin board and in other conspicuous places in the areas, such as barangay, municipal and city hall and other social media platforms. Page 9 of 14g. Forfeiture After the three (3) years period, all the undistributed financial benefit fund in the DOLE RO shall be forfeited. The forfeited amount including its interests shall be deposited to DOLE-SAWP Bioethanol Collection Account within one month from the date of forfeiture. The said fund shall be allocated to Socio-Economic Program Fund, to be distributed equally to its sub-program components. 2. Socio-Economic Program (SEP) a. SEP Components The following benefits, and other benefit schemes that may be recommended by the Tripartite Consultative Council and approved by the DOLE Secretary, that are eligible for funding under SAWP-SEP may consist any or a combination of the following: Livelihood Assistance (4%) includes training on entrepreneurship and enterprise development, provision of tools and equipment, materials including initial start- up working capital that will be given in cash or in kind to eligible plant! distillery workers or plant workers’ group, association, cooperative or union. ji, Training and Vocational Education Assistance (4%) includes skills training and retraining to enhance organizational and community development, financial literacy, network building and other capability building assistance; provision of stipends or allowance to deserving bioethanol workers or their dependents for technical vocational or tertiary courses which are aligned with the manpower needs of the biofuel industry. iii. Social Protection and Welfare Benefits (4%) includes services which seeks to reduce poverty and vulnerability to risks and enhance the social status and rights of the marginalized by promoting and protecting livelihood and employment, protecting against hazards and sudden loss of income, and improving people's capacity to manage risks. This may include activities, that will promote work improvement, productivity, safety and health, promote basic preventive health care, nutrition and hygiene practices, conduct of medical and dental mission, provision of maternity and death benefit assistance and other strategies that will reduce their vulnerabilities against economic shocks and other risks. On the provision of maternity benefit assistance, only actively employed female bioethanol plant worker is entitled to receive a one-time maternity benefit assistance. Likewise, the qualified beneficiary of the deceased bioethanol plant worker shall be entitled to receive a death benefit assistance. The Secretary of Labor and Employment shall issue a separate order to effect these, subject to the availability of funds allocated for the said purpose, and upon the recommendation of the Tripartite Consultative Council The Bureau of Workers and Special Concerns will set necessary guidelines needed for processing of maternity and death benefit claims. Page 10 of 14iv. Emergency Assistance (3%) includes assistance that provides protective coping strategies to workers against unexpected or catastrophic events such as earthquake, typhoons, landslides, flooding, prolonged drought or man- made emergencies or catastrophes leading to temporary work stoppage of at least 15 days or job displacement or retrenchment. It covers the provision of food relief or financial assistance, emergency employment program and other services to help eligible workers cope during or after an unexpected or catastrophic natural disasters and economic displacements. b. Availment of SAWP SEP Benefits Proponents. Those who may propose socio-economic projects for bioethanol workers are the following: 1. Duly registered Bioethanol Plant Workers’ Group, Association, Cooperatives or Union; 2. DOE accredited and SAWP lien contributing bioethanol producers! facilities/ plants; 3. Sugar Regulatory Administration and its Regional Offices; and 4. BWSC or the Field and Regional Offices of the Department of Labor and Employment. Beneficiaries. Those who are eligible to avail the program, projects or services are the following: 1. All bioethanol plant workers, regardless of their employment status, except managerial-level employees; 2. Members of Bioethanol Plant Workers’ Group, Association, Cooperatives or Unionfrom DOE accredited and SAWP lien contributing bioethanol producers’ facilities/ plants; and 3. Dependents of bonafide members of plant workers’ association or union and/or workers of DOE accredited and SAWP lien contributing bioethanol plants/ facilties/ distilleries. c. The benefits provided under this 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 thisGuidelines shall be subject to any form of taxation. 4. 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. e. Processing, Release, Utilization, and Ausit of the Project Fund i, Concerned DOLE Field/ Provincial Office shall provide advisory services or technical assistance to proponents/ beneficiary organization or partner government organization in the preparation of project proposal. Technical support from SRA Regional Office may be solicited by DOLE Field/ Provincial Office, if necessary. |. The concerned DOLE Field or Provincial Office shall initially evaluate the project proposal and determine the legitimacy of the proponent or beneficiary organization, prior endorsement to DOLE Regional Office. AMemorandum of Agreement (MOA) shall be executed between the DOLE and the proponent/ beneficiary organization or partner organization, upon approval of the proposal by the DOLE Secretary. Page 11 of 14