Rules and Regulations - Part 2

The Lawphil Project - Arellano Law Foundation

RULES AND REGULATIONS IMPLEMENTINGTHE SPECIAL PROVISIONS OF THE PHILIPPINE COOPERATIVE CODE OF 2008

(REPUBLIC ACT NO. 9520)

TITLE AND DEFINITIONS

Section 1. Title. These Rules shall be known as the "Rules and Regulations Implementing the Special Provisions ofthe Philippine Cooperative Code of 2008."

Section 2. Definition of Terms. For the purpose of these Rules and Regulations, the following terms are defined asfollows:

1. Accreditation - shall refer to the act of the OTC Board of Directors recognize the Transportation ServiceCooperatives and which shall take place after registration with the CDA as evidenced by a Certificate ofAccreditation.

2. Agrarian Reform Area - shall refer to the area subject to the coverage of Comprehensive AgrarianReform Program (CARP)/Comprehensive Agrarian Reform Program Extension with Reform (CARPER).

3. Agrarian Reform Beneficiaries (ARBs) - shall refer to the qualified beneficiaries of ComprehensiveAgrarian Reform Program (CARP) as defined under Section 22, Chapter VII of R.A. 6657.

4. Agrarian Reform Community (ARC) - shall refer to a community composed and managed by ARBs whoare willing to be organized and to undertake the integrated development of an area and/or their organizationsor cooperatives as defined under RA 9700, otherwise known as the Comprehensive Agrarian ReformProgram Extension with Reform (CARPER) Act.

5. Agrarian Reform Cooperative - shall refer to one organized by marginal farmers majority of which areAgrarian Reform Beneficiaries duly registered with the Authority for the purpose of developing an appropriatesystem of land tenure, land development, land consolidation or land management in areas covered byagrarian reform and for other purposes as provided by law. The same shall also refer to Agrarian ReformBeneficiaries Cooperative (ARB Coop) as defined in DAR Administrative Order No. 05, Series of 2009.

6. Authority - shall refer to Cooperative Development Authority (CDA).

7. BFAD - shall refer to Bureau of Food and Drugs.

8. Blanket Loan/Wholesale Loan - shall refer to a housing loan contracted/obtained by a housingcooperative intended to identify member-beneficiaries for land acquisition, land improvement, houseconstruction, home improvement, or renovation and other similar purposes.

9. BSP - shall refer to Bangko Sentral Pilipinas.

10. CGS - shall refer to the Certificate of Good Standing issued by the Authority to all types of cooperatives.Transportation Service Cooperative shall also secure another CGS from OTC or LGU, whichever isapplicable.

11. CLOA - shall refer to the Certificate of Land Ownership Award.

12. Commission - shall refer to the Insurance Commission.

13. Cooperative Education and Transport Operation Seminar (CETOS) - shall refer to seminarsconducted by CDA and/or OTC for the purpose of providing continuing education on cooperative and transportoperation to enhance the knowledge and capability of the officers as well as the members of theTransportation Service Cooperative.

14. Cooperative Housing Program - shall refer to an alternative housing approach, in partnership withgovernment/non-government agencies involved in a housing program, undertaken by a financially andorganizationally stable cooperative to address the housing problems of its members primarily the low-incomeearners through its own cooperative efforts in planning and direct production of affordable, decent andadequate housing units.

15. CPCN/Franchise/Permit - shall refer to the Certificate of Public Convenience and Necessity issued by

R.A. 9520 file:///C:/Users/Cezar/Desktop/ra_9520_2009.html

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the appropriate government agencies which authorizes the grantee thereof to render the appropriate publicservice.

16. Dairy Cooperative - shall refer to one whose members are engaged in the production of fresh milk whichmay be processed and/or marketed as dairy products.

17. Distribution of Electricity - shall refer to the conveyance of electric power by a distribution utility throughits distribution system pursuant to the provisions of the EPIRA Law.

18. Distribution of Utility - shall refer to any Electric Cooperative, private corporation, government-ownedutility, or existing local government unit which has an exclusive franchise to operate a distribution system inaccordance with the EPIRA Law.

19. DAR - shall refer to the Department of Agrarian Reform.

20. DOH - shall refer to Department of Health.

21. DOTC - shall refer to Department of Transportation and Communications.

22. Electric Cooperative - shall refer to one organized for the primary purpose of undertaking powergeneration, utilizing renewable energy sources, including hybrid system, acquisition and operation ofsubtransmission or distribution to its household members.

23. Extension Offices - shall refer to the offices of the Authority covering one geo-political region each astheir area of jurisdiction.

24. EPIRA - shall refer to the Electric Power Industry Reform Act of 2001.

25. GSIS - shall refer to the Government Service Insurance System.

26. High Rise/Condominium Housing - shall refer to the construction of at least five (5) storey residentialbuilding in high density urban and rural areas to provide housing to low income earners.

27. HDMF - shall refer to the Home Development Mutual Fund or Pag-IBIG Fund.

28. HLURB - shall refer to the Housing and Land Use Regulatory Board.

29. Housing Beneficiaries - shall refer to regular members in good standing of the Housing Cooperative whoactively in the By-laws and duly approved internal policies of the cooperative.

30. Housing Cooperative - shall refer to one organized to assist or provide access to housing for the benefitof its regular members who actively participate in the savings program for housing. It is co-owned andcontrolled by its members.

31. Insurance Cooperative - shall refer to one engaged in the business of insuring life and property ofcooperatives and their members. It shall also refer to Cooperative Insurance Societies (CIS).

32. Insurance Like Activity - shall refer to any activity involving regular collection of premiums, fees,contributions, or charges prior to the occurrence of contingent event and the payment of guaranteed benefitsupon the occurrence of such event.

33. LBP - shall refer to the Land Bank of the Philippines.

34. LGU - shall refer to Local Government Unit.

35. LTFRB - shall refer to the Land Transportation Franchising and Regulatory Board.

36. LTO - shall refer to the Land Transportation Office.

37. LWUA - shall refer to the Local Water Utilities Administration, created under PD 198, as amended.

38. MARINA - shall refer to Maritime Industry Authority.

39. Marginal Farmers - shall refer to farmers who are tilling an area of not more than three (3) hectares.

40. Medium Rise Housing - shall refer to the construction of a maximum of four (4) storey residential buildingin high density urban and rural areas to provide housing to low income earners.


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41. Member in Good Standing - shall refer to one who is a regular member and has complied with all therequisites for membership. One who possesses all the qualifications and none of the disqualificationsprovided in the Cooperative By-laws as ascertained by the Board of Directors and has the right to vote andbe voted upon.

42. Micro-Insurance - shall refer to an activity providing specific insurance, insurance-like, and other similarproducts and services that meet the needs of the low-income sector for risk protection and relief againstdistress, misfortune and other contingent events. This shall include all forms of insurance, insurance-like andother similar activities, as may be defined by concerned regulatory bodies with features such as: premiums,contributions, fees or charges collected/deducted prior to the occurrence of a contingent event andguaranteed benefits provided upon occurrence of a contingent event.

43. Micro-Insurance Product - shall refer to a financial product or service that meets the risk protectionneeds of the poor where the amount of premiums, contributions, fees or charges computed on a daily basisdoes not exceed five percent (5%) of the current daily minimum wage rate for non-agricultural workers inMetro Manila, as approved by the National Wages Productivity Board (NWPB)/Regional Tripartite WagesProductivity Board (RTWPB) and the maximum sum of guaranteed benefits is not more than 500 times thedaily minimum wage rate for non-agricultural workers in Metro Manila.

44. NDA - shall refer to National Dairy Authority.

45. Next of Kin - shall, for purposes of succession, refer to an natural person who is an heir of an agrarianreform beneficiary and who is qualified to be a member of the cooperative as ARB under its By-laws and asdetermined by DAR.

46. NHA - shall refer to the National Housing Authority.

47. NWRB - shall refer to the National Water Resources Board, created under PD 424.

48. OTC - shall refer to the Office of Transportation Cooperatives.

49. PCG - shall refer to the Philippine Coast Guard.

50. Referendum - shall refer to a mechanism of securing the approval of the general membership of anElectric Cooperative on issues affecting its registration, operation, and management.

51. Regular Insurance Product - shall refer to all other insurance policies not covered by Micro-InsuranceProduct.

52. Renewable Energy Resources - shall refer to energy resources that do no have an upper limit on thetotal quality to be used. Such resources are renewable on a regular basis and the renewable rate is rapidenough to consider availability over an infinite time. These include among others, biomass, solar, wind, hydroand ocean energy.

53. RTWPB - shall refer to the Regional Tripartite Wages Productivity Board.

54. SSS - shall refer to the Social Security System.

55. Socialized Housing - shall refer to the housing program and project undertaken by the government andprivate sector for the underprivileged and homeless which may also be undertaken by a Housing Cooperative.This includes sites and services development, long-term financing and liberalized terms on interest payments.

56. Sub-transmission Assets - shall refer to the facilities related to the power delivery service below thetransmission voltages and based on the functional assignment of assets, including, but not limited tostepdown transformers used solely by load customers, associated switchyard/substation, control andprotective equipment, reactive compensation equipment to improve customer power factor, overhead lines,and the land where such facilities/equipment are located. These include NPC assets linking transmissionsystem and the distribution system which are neither classified as generation nor transmission.

57. Supply of Electricity - shall refer to the sale of electricity by a party other than a generator or adistributor in the franchise area of a distribution utility using the wires of the distribution utility concerned.

58. Technical Plan - shall refer to all technical documents required in planning a housing project namely, thebar chart and construction schedule, systematic development plan, the architectural and detailed engineeringand housing design, contract documents, technical and material specification.

59. Transmission of Electricity - shall refer to the conveyance of electricity through the high voltage system.


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60. Transportation Service Cooperative - shall refer to one which engages in land and sea transportation,limited to small vessels, as defined or classified under the Philippine Maritime laws, organized under theprovision of the Code.

61. Urban Areas - shall refer to all cities regardless of their population density and to municipalities with apopulation density of at least 500 persons per square kilometer.

62. Urbanizable Areas - shall refer to the sites and lands within display marked and great potential ofbecoming urban areas within the period of five (5) years.

63. Water Tariff - shall refer to the water rate charged to customers/members for water consumption asdetermined by the cooperative and approved by the NWRB.

64. Water Permit - shall refer to the authority to appropriate and use water.

65. Water Right - shall refer to the privilege granted by the government to appropriate and use water.

66. Water Service Cooperative - shall refer to a duly registered cooperative organized to own, operate, andmanage water supply systems for the provision and distribution of potable water for its members/consumers.

67. Water Supply - shall refer to the supply of potable water as provided by the cooperative for domestic,industrial, commercial, and other uses.

68. Worker Beneficiaries - shall refer to a natural person who renders service for a value as an employee orlaborer in an agricultural enterprise or farm within an ARC, regardless of whether his compensation is paid ona daily, weekly, monthly or "pakyaw" basis.

RULE I - HOUSING COOPERATIVES

Pursuant to the provisions of Art. 62(13) (par.2) under Chapter V of Republic Act No. 9520, otherwise known as thePhilippine Cooperative Code of 2008, the Cooperative Development Authority in consultation with NHA, HDMF,SSS, LBP, and concerned cooperative sector hereby promulgates the following rules and Regulations for the properguidance and compliance of Housing Cooperatives.

Section 1. Coverage. This Rule shall cover all cooperatives duly registered with the Authority under R.A. 9520organized to assist or provide access to housing for the benefit of its regular members.

Section 2. Organization. Fifteen (15) or more natural persons who are Filipino citizens, of legal age, having acommon bond of interest and actually residing or working in the intended area of operation, may organize a housingcooperative.

Section 3. Purpose and Objectives. A Housing Cooperative shall be organized for any or all of the followingpurposes:

(1) To facilitate access and/or provide affordable housing units to its members;

(2) To create a resource mobilization program to ensure financial stability for the cooperative;

(3) To foster and strengthen the principles of cooperativism by promoting a comprehensive and integratedcommunity development program which are planned and managed by the cooperative members therebyensuring a sustained and self-reliant cooperative community.

(4) To develop collaborative efforts and partnership with other cooperatives, CDA, NHA, GSIS, HDMF, SSS,LBP, DBP, HLURB and other government agencies, financial institutions and entities thereby assuringavailability of resources and lower cost of housing development.

(5) To expand the cooperatives business operations by stabilizing the available resources for the continuingproduction of housing units for its members.

(6) To undertake such other economic or social activities as may be necessary or incidental in the pursuit ofthe foregoing purposes.

Section 4. Housing Programs and activities. Housing Cooperatives may engage in the following activities:

a. Socialized Housing;

b. Medium Rise Public and Private Housing;


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c. High Rise/Condominium Housing;

d. Student/Faculty Dormitory Housing;

e. Production and Distribution of Housing Materials;

f. Estate Management; and

g. Other similar activities.

Section 5. Registration Jurisdiction. Housing Cooperatives shall file their application for registration with the CDAExtension Office, which shall have jurisdiction over the said cooperatives.

Section 6. Capitalization. For purposes of registration with the Authority, a housing cooperative shall have aminimum paid-up capitalization of Fifteen Thousand Pesos (P 15, 000.00).

Section 7. Requirements for Registration. The following shall be complied with upon filing of application:

A. New Applicant

(1) Name Verification Slip;

(2) Articles of Cooperation and by-Laws;

(3) Sworn Statement of the treasurer elected by the subscribers showing that at least ` twenty-five percentum (25%) of the authorized share capital has been subscribed and at least twenty-five per centum(25%) of the total subscription has been paid: Provided, That in no case shall the paid-up share capitalbe less than Fifteen Thousand Pesos (15,000.00);

(4) Surely Bond of Accountable Officers handling funds, properties and securities;

(5) Pre-Membership Education Seminar (PMES);

(6) Economic Survey;

(7) Pre-Feasibility Study of the housing projects undertaking as reviewed by NHA;

(8) Undertaking to Change Name in the event that another cooperative has acquired prior right to theuse of the proposed name; and

(9) Registration Fee.

B. Existing Cooperative

(1) Amended Articles of Cooperation and By-laws;

(2) A Resolution certified by the Board Secretary and by the majority of the Board of Directors statingthat the said amendments have been duly approved by at least two-thirds (2/3) vote of the memberswith voting rights;

(3) Audited Financial Statements showing profitable operations for the past two (2) years;

(4) Pre-feasibility study of the housing projects undertaking as reviewed by NHA;

(5) Proof of business track record of the cooperative; and

(6) Amendment Fee.

Section 8. Financing and Technical Assistance. The Authority, in coordination with appropriate governmentagencies and financial institutions, shall assist the housing cooperative in availing technical and financial assistancefor its housing projects.

For this purpose, a special window for the financing of the housing projects shall be created by the appropriatehousing agencies and government financial institutions. The financing shall be in the form of blanket loans orwholesale loans to qualified housing cooperatives, with interest rates and terms equal to, or better than those givenfor socialized housing projects without need for individual processing.

Section 9. Documentary Requirements in Availing for Technical and/or Financial Assistance. The cooperative in


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availing technical and/or financial assistance shall file its application with the appropriate government financialinstitutions.

For this purpose, the applicant cooperative shall comply with the documentary requirements as maybe required bysuch appropriate government financial institution.

Section 10. Conditions for the Proposed Housing Project. The proposed housing project of the cooperative shallhave the following features as certified by the NHA:

1. Availability of Land Suitable for Housing. The land proposed for housing is classified as a safe andbuildable area and not affected by any government infrastructure project, agricultural or industrial reserve.

2. Land Ownership. The land is owned by the cooperative or there is an on-going negotiation between thelandowner and cooperative through a Contract to Sell or Reservation Agreement between the landowner andthe cooperative and that the land is free from any liens and encumbrances.

3. Target Beneficiaries. The proposed housing project should have at least 30 initial target member-beneficiaries.

Section 11. Membership. Membership in Housing Cooperatives shall be open to all natural persons who meet thequalifications for membership prescribed in the cooperative By-laws.

Section 12. Regulatory Power. The Authority shall have the power to regulate the internal affairs of HousingCooperative such as:

a. Exercise of rights and privileges of members;

b. Formulation of rules and procedures and the conduct of meetings of General Assembly, Board of Directorsand Committees.

c. Manner of election and qualifications of Officers, Directors and Committee Members;

d. Allocation and distribution of surplus; and

e. Other matters relating to the internal affairs of Housing Cooperatives.

All matters relating to the technical aspects of the housing program and such other similar matters affecting theHousing Cooperatives shall be regulated by the NHA or HLURB as the case maybe.

Section 13. Joint Monitoring and Evaluation Committee. The Joint Monitoring and Evaluation Committee shall becomposed of CDA, as the lead agency, NHA, HLURB, HDMF, SSS, GSIS, LBP, DBP, concerned cooperative sectorand other appropriate government agencies and financial institutions.

The Committee shall have the following functions:

1. To formulate joint standards for the proper implementation, monitoring, organization, management, anddevelopment of cooperative housing project all matters relating to the organizations, management, anddevelopment of the cooperative housing projects.

2. To recommend changes to this IRR from time to time if the need arises.

3. To assist in settling inter/intra cooperative disputes.

4. To submit annual accomplishment report to the Authority.

Section 14. Settlement of Disputes. Intra/inter cooperative disputes shall, as far as impracticable, be settledamicably through the conciliation and mediation mechanism embodied in the By-laws of the cooperative, which shallbe in accordance with the CDA Guidelines for the Implementation of Conciliation-Mediation for CooperativeDisputes, and in applicable laws.

Should such conciliation-mediation proceedings fail, the matter may be settled through voluntary arbitration or incourt of competent jurisdiction.

However, in cases where the dispute/s fall within the jurisdiction of the NHA or HLURB, the same shall be referred tothe said agency and it shall be resolved in accordance with the NHA or HLURB regulations.

RULE II - AGRARIAN REFORM COOPERATIVES


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Pursuant to the provisions of Art. 93 (6) and Art. 94 (par. 2) under Chapter XI of Republic Act. No. 9520, otherwiseknown as the Philippine Cooperative Code of 2008, the Authority in consultation with the DAR, BSP, LBP, and theconcerned cooperative sector hereby promulgates the following rules and regulations for proper guidance andcompliance of Agrarian Reform Cooperatives.

Section 1. Coverage. This Rule shall cover all Agrarian Reform Cooperatives duly registered with the Authorityunder R.A. No. 9520.

Section 2. Organization. At least fifteen (15) marginal farmers majority of which are Agrarian Reform Beneficiariesin an agrarian reform areas may organized an Agrarian Reform Cooperative.

Section 3. Purposes and Objectives. Agrarian Reform Cooperatives shall be organized for any or all of thefollowing purposes:

(1) To develop an appropriate system of land tenure, land development, land consolidation or landmanagement in areas covered by agrarian reform;

(2) To coordinate and facilitate the dissemination of scientific methods of production and provide assistancein the processing, storage, transport, and marketing of farm products for Agrarian Reform Beneficiaries andtheir immediate families, hereinafter referred to as "beneficiaries";

(3) To provide financial facilities to beneficiaries for provident or production purposes at reasonable costs;

(4) To arrange and facilitate the expeditious transfer of appropriate and suitable technology to beneficiariesand marginal farmers at the lowest possible costs;

(5) To provide social security benefits, health, medical and social insurance benefits and other social andeconomic benefits that promote the general welfare of the agrarian reform beneficiaries and marginal farmers;

(6) To provide a non-formal education, vocational/technical training and livelihood program to beneficiariesand marginal farmers;

(7) To act as channels for external assistance and services to the beneficiaries and marginal farmers;

(8) To undertake a comprehensive and integrated development program in agrarian reform and resettlementareas with special concern for the development of agro-based, marine-based, and cottage-based industries;

(9) To represent the beneficiaries on any or all matters that affect their interest; and

(10) To undertake such other economic or social activities as may be necessary or incidental in the pursuit ofthe foregoing purposes.1avvphi

Section 4. Registration Jurisdiction. Agrarian Reform Cooperatives shall file their duly accomplished application forregistration with the CDA Extension Office, which shall have jurisdiction over the said cooperatives.

Section 5. Registration Requirements. The following shall be complied with upon filing of application:


(2) Articles of Cooperation and By-Laws;

(3) Sworn Statement of the Treasurer elected by the subscribers showing that at least twenty-five per centum(25%) of the authorized share capital has been subscribed and at least twenty-five per centum (25%) of thetotal subscription has been paid: Provided, That in no case shall the paid-up share capital be less than FifteenThousand Pesos (P15,000.00);

(4) Surety Bond of Accountable Officers;

(5) Pre-Membership Education Seminar (PMES);


(7) Undertaking to Change Name in the event that another cooperative has acquired prior right to the use ofthe proposed name;

(8) Mother CLOA in case of plantation based ARBs;

(9) Written verification from the DAR to the effect that the cooperative organization is needed and desired by


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the beneficiaries; results of a study that has bee conducted fairly indicate the economic feasibility oforganizing the same and that will be economically viable in the operations; that at least majority of themembers are Agrarian Reform Beneficiaries, and the same may now be organized and registered inaccordance with the requirements of the Philippine Cooperative Code of 2008; and

(10) Registration fee.

Section 6. Cooperative Name. All cooperatives organized for any or all of the purposes/objectives enumeratedunder Section 3 of this Rule shall always bear the word "Agrarian Reform" whether engaged in the operation ofpublic utilities and services and/or other business activities/services.

Existing ARB Coops shall amend their cooperative name to conform to this Section.

Section 7. Amendments of Articles of Cooperation and By-laws. Agrarian Reform Cooperative intending to engagein the operation of public utilities and services shall amend its Articles of Cooperation and By-Laws to legally providefor such services. IT shall also comply with the other requirements imposed by the Authority and the appropriategovernment agencies for cooperatives engaged in public utilities and services.

Section 8. Capitalization. For purposes of registration with the Authority, Agrarian Reform Cooperatives shall havea minimum paid up capitalization of Fifteen Thousand Pesos (P15,000.00).

However, to engage in the operation of public utilities and services, the minimum capitalization shall be inaccordance with the Rules and Regulations prescribed by the Authority for Multi-Purpose cooperatives under Rule 3of the Rules and Regulations Implementing Certain Provisions of the Philippine Cooperative Code of 2008 (RepublicAct No. 9520) and by the concerned government agency.

In case the ARB Coop engages in Transport Service, it shall comply with the other requirements prescribed inSection 5, Rule 5 of these Rules and Regulation.

Section 9. Membership Termination and Valuation and/or Transfer of Share Capital. Agrarian Reform Cooperative,other than plantation-based Agrarian Reform Cooperative shall be governed by Articles 30,31 and 74 of RA 9520and the By-laws of the Cooperative.

However, plantation-based Agrarian Reform Cooperative which is covered by collective Certificate of LandOwnership Award (CLOA), shall be governed by the joint DAR-CDA Administrative Order No. 09, Series of 2008entitled "Revised Rules and Regulations on ARB Membership Status and Valuation and/or Transfer of Paid-Up ShareCapital in Agrarian Reform Plantation-Based Cooperatives dated September 4, 2008" including any amendmentsthereto or subsequent issuances.

Section 10. Privileges. Subject to reasonable terms and conditions that may be imposed by the DAR and theAuthority, an Agrarian Reform Cooperatives duly registered with the Authority may be given exclusive right to do anyor all of the following economic activities in agrarian reform and resettlement areas:

(1) Supply and distribution of consumer, agricultural, aqua-cultural, and industrial good, production inputs, andraw material and supplies, machinery, equipment, facilities and other services and other services andrequirements of the beneficiaries and marginal farmers at reasonable prices;

(2) Marketing of the products and services of the beneficiaries in local and foreign markets;

(3) Provision of essential public services at cost such as power, irrigation, potable water, passenger and/orcargo transportation by land or sea, communication services, and public health and medical care services;

(4) Management, conservation, and commercial development of marine, forestry, mineral, water and othernatural resources subject to compliance with the laws and regulations on environmental and ecologicalcontrols; and

(5) Provision of financial, technological, and other services and facilities requires by the beneficiaries in theirdaily lives and livelihood. Such terms and conditions shall be jointly formulated by the DAR and the Authority.

Section 11. Preferential Right/Treatment. In an agrarian reform and resettlement areas, a duly registered AgrarianReform Cooperatives shall have preferential right/treatment form the government in the following matters:

(1) In the construction, maintenance and management of roads, bridges, canals, wharves, ports, reservoirs,irrigation systems, waterworks systems, and other infrastructures with government funding

The technical assistance, facilities and equipments to such agrarian reform cooperatives shall be provided bythe Government.


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(2) In the grant of Franchise and Certificate of Public Convenience and Necessity for the operation of publicutilities and services: Provided, that it meets the requirements and conditions imposed by the appropriategovernment agency granting the Franchise or Certificate of Public Convenience and Necessity,

In case of electric service provider in the area, it shall, upon the request of an Agrarian Reform Cooperative,immediately provide electric services to the agrarian reform areas. If the electric service provided fails to providethe services requested within a period of one (1) year, the Agrarian Reform Cooperative may undertake to providethe electric services in the area through its own resources. All investments made by the said Agrarian ReformCooperative for the electrification of the agrarian reform resettlement areas shall be subject to the electric servicesprovider once it takes on the service.

Section 12. Lease of Public Lands. Agrarian Reform Cooperative may lease public lands for a period notexceeding twenty five (25) years, subject to renewal for another twenty five (25) years only, provided the applicationfor renewal shall be made one (1) year before the expiration of the lease and such lease shall be for the exclusiveuse and benefit of the beneficiaries and marginal farmers subject to the provisions of the CARP, as amended..

Section 13. Cooperative Estates. Landholdings like plantations, estates, or haciendas acquired by the State inaccordance with the CARP, as amended, for the benefit of the workers shall be collectively owned through a MotherCLOA by the worker beneficiaries under a cooperative set-up.

Section 14. Assistance. The Government shall provide the necessary financial and technical assistance to AgrarianReform Cooperatives to enable them to discharge the purposes and objectives under Section 3 of this Rule whichshall be in accordance with a joint program for the organization and financing of the Agrarian Reform Cooperatives.The joint program shall be geared towards the gradual assumption of full ownership and management control of thecooperative estate by the Agrarian Reform Cooperatives.

Section 15. Regulatory Power. The Authority shall have the power to regulate the internal affairs of Agrarian ReformCooperative such as:


b. Formulation of rules and procedures and the conduct of meetings of General Assemble, Board of Directorsand Committees;

c. Manner of election and qualifications of Officers, Directors, and Committee Members;


e. Other matters relating to the internal affairs of Agrarian Reform Cooperatives.

All matters relating to land acquisition, development of an appropriate system of land tenure, land development, landconsolidation, or land management in areas covered by agrarian reform and such other similar matters affecting theAgrarian Reform Cooperatives shall be regulated by the DAR.

All matters relating to land valuation and assessment shall be regulated by the LBP.

Section 16. Financing Program. Any Financing Program to be availed of by ARB Coops shall be in accordance withthe joint program to be developed by the DAR, the BSP, and the Authority.

Section 17. Settlement of Disputes. Intra/inter cooperative disputes shall other than land disputes, as far aspracticable, be settled amicably through the conciliation and mediation mechanism embodied in the By-laws of thecooperative, which shall be in accordance with the CDA Guidelines for the Implementation of Conciliation- Mediationfor Cooperative Disputes and in applicable laws.

Should such conciliation - mediation proceedings fail, the matter may be settled through voluntary arbitration or incourt of competent jurisdiction.

However, in cases where the dispute/s fall within the jurisdiction of the DAR, the same shall be referred to the saidagency and it shall be resolved in accordance with the DAR regulation.

RULE III- INSURANCE COOPERATIVES

Pursuant to the provisions of Art. 108 under Chapter XIII of Republic Act. No. 9520, otherwise known as thePhilippine Cooperative Code of 2008, the Commission and the Authority in consultation with the concernedcooperative sector hereby promulgate the following rules and regulations for the proper guidance and compliance ofthe Insurance Cooperatives.


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Section 1. Coverage. This Rules shall cover all Insurance Cooperatives duly registered under R.A. 9520 organizedfor the purpose of engaging in the business of insuring life and property of cooperatives and their members.

Section 2. Organization. Fifteen (15) or more duly registered cooperatives may organize as Insurance Cooperative.

Section 3. Purposes and Objectives. An Insurance Cooperative shall provide its constituting members differenttypes of insurance coverage consisting of, but not limited to, life insurance with special group coverage, loanprotection, retirement plans, endowment with health and accident coverage, fire insurance, motor vehicle coverage,bonding, crop, livestock protection and equipment insurance.

It may also provide "micro-insurance products" and regular insurance to cooperatives and its members.

Section 4. Membership. Membership in Insurance Cooperative shall be open to all duly registered cooperatives ofall types and categories

Section 5. Registration Jurisdiction. Any applicant cooperative proposing to engage into the business of insuringlife and property of cooperatives and their members shall file their duly accomplished application for registration withthe CDA Central Office Registration Division.

Section 6. Capitalization. An Insurance Cooperative registered with the Authority pursuant to this Rule shall securea Certificate of Authority from the Commission within two (2) years from the date of its registration. Failure to securethe same shall be a ground for the revocation/cancellation of the certificate of Registration.

Said Certificate of Authority shall be valid until the 30th day of June of the year following its issuance.

Section 8. Suspension or Revocation of Certificate of Authority. The Commission may, after due notice andhearing, suspend or revoke the Certificate of Authority issued to an Insurance cooperative for violation of anyexisting laws, rules or regulations, or any provisions of the Insurance Code.

Section 9. Regulatory Power. The Authority shall have the power to regulate the internal affairs of InsuranceCooperative such as:


b. Formulation of rules and procedures and the conduct of meetings of the General Assembly, Board ofDirectors and Committees;


d. Allocation and distribution of net surplus; and

e. Other matters relating to the internal affairs of Insurance Cooperatives.

All matters relating to the organization and operations concerning insurance business of such InsuranceCooperative shall be regulated by the Commission as provided for in the Insurance Code and other related laws.

Section 10. Joint Committee. In order to fully implement the provisions of this Rule, a Joint Committee, to becomposed of two (2) representatives each from the Authority and the Commission and a representative from theInsurance Cooperatives shall be formed. The representative from the Authority shall Chair of the Committee.

The Joint Committee shall be constituted within thirty (30) days upon effectivity of these Rules and Regulations.

Section 11. Functions of the Joint Committee. The Joint Committee shall have the following functions:

1. To oversee the implementation of this Rule;

2. To ensure compliance with the administrative and other requirements of the Authority and the Commission;

3. To make recommendation on the amendment of this Rule as maybe necessary; and

4. Such other function as the need arises.

Section 12. Limitation. Cooperatives intending to engage in insurance, insurance like, and other similar activitiesshall register with the Authority and secure a Certificate of Authority from the Commission.

However, CIS are not allowed to serve the insurance needs of other cooperatives that are not member-owners ofthe CIS. A CIS serving the insurance needs of non-member cooperatives and the general public shall be required toget a commercial insurance license from the Insurance Commission.


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Primary Cooperatives which are not registered and licensed to operate as Insurance Cooperative, are prohibited toengage in insurance, insurance like and other similar activities with their members. However, those alreadyengaging in such shall be given two (2) years transition period to undertake any of the following options:

To organize an insurance cooperative with other primary cooperatives that have the same insurance-like businessactivity;

(2) To join an existing Insurance Cooperative;

(3) To partner with licensed micro-insurance providers; and

(4) To buy a micro-Insurance product through a licensed agent or broker.

All existing Insurance Cooperative with members which are non-cooperative and/or cooperative oriented societiesand organizations are hereby given five (5) year period to terminate and remove such entities from their memberregistry. Failure to comply within the given period shall constitute a violation of this Rule and shall be dealt withaccordance with the provision of RA 9520 and other applicable laws.

Section 13. Settlement of Disputes. Intra/inter cooperative disputes shall be settled as far as practicable throughconciliation-mediation mechanism embodied in the cooperative by-laws, which shall be in accordance with the CDAGuidelines for the Implementation of Conciliation of Cooperative Disputes, and applicable laws. Should suchconciliation-mediation proceedings fail, the matter may be settled through voluntary arbitration by the Authority or incourt of competent jurisdiction.

However, in cases where the dispute/s fall within the jurisdiction of the Commission, the same shall be referred tothe said agency and it shall be resolved in accordance with the Commission regulation.

RULE IV-WATER SERVICE COOPERATIVES

Pursuant to the provisions of Art. 111 (3) under Chapter XIV of Republic Act. No. 9520, otherwise known as thePhilippine Cooperative Code of 2008, the Authority in consultation with the NWRB, the LWUA, and concernedcooperative hereby promulgates the following rules and regulations for the proper guidance and compliance of theWater Service Cooperative.

Section 1. Coverage. This Rule shall apply to all cooperative duly registered with the Authority under R.A. 9520whose main purpose or one of its purposes is to own, operate, and manage water supply systems for the provisionand distribution of potable water to its members and other customers.

Section 2. Organization. Fifteen (15) or more natural person who are Filipino citizens, of legal age, having acommon bond of interest and actually residing or working in the intended area of operation, may organize a WaterService Cooperative.

Section 3. Membership in Water Service Cooperative. Membership in Water Service Cooperative is composed oftwo kinds:

a. Regular Member - refers to a natural person (member-consumer) with water service connection with theright to voted upon and entitled to all the rights and privileges of membership under the Code.

b. Associate Member - refers to a natural person other than a regular member of the household. It shall alsorefer to member- institution or entity availing of the services of Water service Cooperative, such as, but notlimited to: corporation, industrial and commercial establishment, joint venture, other cooperative, placeworship, local government building or facility, etc, as maybe represented by the head of such establishment orentity, but is not entitled to vote and be voted upon. However, shall be entitled to the preferential rights andprivileges as indicated in the Cooperative By-laws and under the Code.

Section 4. Requirements for Registration. The following shall be complied with upon filing of application:


(2) Articles of Cooperation and By-laws;

(3) Sworn statement of the treasurer elected by the subscribers showing that at least twenty-five per centum(25%) of the authorized share capital be less than Fifteen Thousand Pesos (P15,000.00);

(4) Surely Bond of Accountable Officers handling funds properties and securities;

(5) Certificate of Pre-Membership Education Seminar (PMES);


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(8) Land Ownership (any of the following: Certificate of Title Declaration. Lease Agreement, Deed ofDonation, Deed of Sale, etc.)

(9) Well Drilling Data (in case of existing groundwater source ) including Physical & Chemical Analysis ofwater; and

(10) Registration fee.

Section 5. Registration Jurisdiction. Water Service Cooperatives shall file their application with the CDA ExtensionOffice, which shall have jurisdiction over the said cooperatives.

Section 6. Capitalization. For purposes of registration with the Authority, a Water Service Cooperative shall have aminimum paid-up capitalization of Fifteen Thousand Pesos (P15,000.00).

Section 7. Service Area. The cooperative shall only provide services within the area specified in the CPC. In caseof expansion, the cooperative shall apply for an extension of service area with the NWRB.

Section 8. Water Permit. Every Water Service Cooperative shall secure a water permit from the NWRB inaccordance with the provisions of the Water Code of the Philippines.

Section 9. Requirements for Filing Water Permit Applications. All applications shall be filed in the prescribed form,sworn to by the applicants and supported by the following documents:

1. For domestic purpose

1. Duly accomplished Water Permit Application and Notices;

2. Land Ownership (any of the following: Certificate of Title, Tax Declaration, Lease Agreement, Deedof Donation, Deed of Sale, etc;

3. Certificate of Conformance from the LWUA;

4. Vicinity map/Location Plan with scale : 1:10,000 or scale 1:500 showing the exact location of thepoint of diversion;

5. Subdivision Plan (if applicable);

6. Well drilling Data (in case of existing ground water source): and

7. Clearance from DOH, if reuse of wastewater for human consumption.

2. For Municipal Use

1. Proof of land ownership of, legal title to, or right to use, the property on which the water source issituated;

2. Certificate of Registration with the Authority;

3. Certificate of Conformance from LWUA;

4. Vicinity map/Location Plan with scale : 1:10,000 or scale 1:500 showing the exact location of thepoint of diversion;

5. Submission Plan (if applicable);

6. Well Drilling Data (in case of existing groundwater source authenticated by the well driller) includingPhysical and Chemical, Analysis water;

7. Environmental Compliance Certificate (for projects considered as Environmentally Critical ProjectsAreas) or Certificate of Non-Coverage from the Department of Environment and Natural Resources-Regional Office; and

8. Such other documents that may be required by the NWRB.


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Section 10. Requirements for the Issuance of CPC and Tariff Approval. The following documents are required to besubmitted for an Application for a CPC and Approval of Tariff:

1. Certificate of Registration from the Authority;

2. Articles of Cooperation and By-Laws;

3. Special Power of Attorney authorizing the signatory to sign and file the application;

4. Favorable Endorsement from LWUA;

5. Approved water permits and/or MOA with water service provider, in case of bulk water supply;

6. Official receipt of annual water charge(s);

7. Clearance that applicant has no unpaid fees and charges from NWRB;

8. Plan of water distribution system;

9. Plan elevation and cross-sectional views of tank/reservoir;

10. Plan elevation and cross-sectional views of pump house, machinery and equipment;

11. Certificate of Potability;

12. Latest Audited Financial Statements for the last two years, if applicable;

13. Actual Balance sheet showing Balance Sheet items for water operations for the last 2 years, if notavailable, submit the following:

a. Accounts receivable -Water Supply

b. Materials Inventory

c. Property and Equipment in Service, at cost

d. Accumulated Depreciation

e. Customers Deposits

14. Itemized list of assets entitled to return as of the end of the last historical year. This should support theProperty and Equipment in Service referred to in item 10 above;

15. Actual Income Statement showing Income Statement items for water operations for the last 2 years, ifapplicable;

16. Business plan for the next 5 years;

17. Projected Financial Statement for five years with the following:

a. Income Statement

b. Balance Sheet

c. Assumptions

18. Itemized list of new investments for the next 5 years;

19. Proposed schedule of water rates; and

20. Levels of Service agreed with consumers commensurate with proposed rates.

Section 11. Regulatory Power. The Authority shall have the power to regulate the internal affairs of Water ServiceCooperative, such as:




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d. Allocation and Distribution of surplus; and

e. Other matters relating to the internal affairs of Water Service Cooperatives.

All matters relating to the Certificate of Public Convenience such as capitalization

and investment requirements, equipment and facilities, water tariff, and such other matters affecting their waterservice operations shall be governed by the NWRB.

Section 12. ROLE OF LWUA. The LWUA shall have the following roles relating to Water Service Cooperative:

1. To provide technical assistance such as capacity building;

2. To assist in the determination of water potability; and

3. Such other assistance as maybe requested by the cooperatives.

Section 13. Preferential Rights. Whenever two or more public service entities have competing interests withrespect to the granting and renewal of CPC and one is an Water Service Cooperative duly registered with theAuthority under R.A. 9520, the NWRB shall accord preference to the latter over any type of public service entity.

Section 14. Responsibility of Water Service Cooperative. Every Water Service Cooperative shall operate,maintain, and provide safe and adequate potable water service. In all cases where practicable, the concernedWater Service Cooperative shall give notice to its member-consumers in advance of any contemplated interruptionof water supply and the probable duration thereof in the area(s) affected. In addition, the Water ServiceCooperative's responsibilities shall include:

1. Service Standards

a. Service Coverage

b. Water Quality

c. Reliability of Supply

2. Operational Performance

a. Operational Efficiency

b. Financial Viability

3. Customer Service

a. Service Request and Complaints

b. Standard Response Time

4. Operating Policies and Procedures on Billing and Collection

5. Protection of Member-Consumers

In relation to this Section, the cooperative shall develop its own Customer Service Code consistent with its By-lawsand in compliance with the NWRB Economic Regulatory Guidelines.

Section 15. Reporting Requirements. All Water Service Cooperatives shall submit reports to the Authority asrequired under Rule 8 of the Rules and Regulations Implementing Certain Provisions of the Philippine CooperativeCode of 2008 (RA 9250). Other reports required by the NWRB, the DOH and other government agencies shalllikewise be submitted to the concerned agency.

Section 16. Sanctions and Penalties. All Water Service Cooperative shall be subjected to corresponding Sanctionsand Penalties as maybe imposed by the Authority and the NWRB for violation or non-compliance with administrativeand statutory requirements.

Section 17. Requirements for Renewal of CPC. The CPC shall be valid for five (5) years and renewable prior to itsexpiry date. The following requirements to be submitted:


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1. Board Resolution authorizing the signatory to sign and file the application;

2. Certificate of Good Standing issued by the Authority;

3. Approved Water Permits;

4. Official receipts of Annual Water change;

5. Official receipt of Supervision and Regulation Fee;

6. Clearance that applicant has no unpaid fees and charges from the NWRB;

7. Plan of Water Distribution System;

8. Plan elevation and cross-sectional views of tank/reservoir;

9. Plan elevation and cross-sectional views of pump house, machinery and equipment;

10. Certificate of Potability;

11. Annual Reports for the last five years;

12. Latest Audited Financial Statement for the last five years;

13. Actual Balance Sheet showing Balance Sheet items for water operations for the last 5 years, if notavailable, submit the following:

a. Account Receivable - Water Supply

b. Materials Inventory

c. Property and Equipment in Service, at cost

d. Accumulated Depreciation

e. Customers' Deposits

14. Itemized list of assets entitled to return as of the end of the last historical year. This should support theProperty and Equipment in Service referred to in item 13 (c) above;

15. Actual Income Statement showing Income Statement items for water operations for the last 5 years;

16. Business plan for the next 5 years;

17. Projected Financial Statement for five years with the following:

a. Income Statement

b. Balance Sheet

c. Assumptions

18. Itemized list of new investments for the next 5 years;

19. Proposed Schedule of Water Tariff; and

20. Levels of Service agreed with consumers commensurate with proposed rates.

Section 18. Securing of Water Permit and/or CPC. Water Service Cooperative including Multi-PurposeCooperative with water service operation is required to secure water permit from the NWRB.

For Water Service Cooperative operating without water permit and/or CPC, the Authority shall report the matter tothe NWRB for appropriate action. The NWRB shall notify the Authority of whatever action taken on the matter.Henceforth, failure of the cooperative to legalize its operation within two (2) years from the date of referral to theNWRB, the same shall be considered a valid ground for the revocation of its Certificate of Registration, after dueprocess.

Section 19. Action on the Application for CPC. Upon submission of the complete requirements for the issuance ofCPC, the NWRB shall approve or reject the same within six (6) months from date of receipt thereof.


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Section 20. Settlement of Disputes. Intra/inter cooperative disputes shall be settled as far as practicable throughconciliation-mediation mechanism embodied in the cooperative by-laws, which shall be in accordance with the CDAGuidelines for the Implementation of Conciliation-Mediation of Cooperative Disputes, and applicable laws.


However, in cases where the issue/s fall within the jurisdiction of the NWRB, the same shall be referred to the saidagency and it shall be resolved in accordance with the NWRB regulation.

RULE V - TRANSPORTATION SREVICE COOPERATIVES

Pursuant to the provisions of Art. 113 (par. 2) under Chapter XIV of Republic Act. No. 9520, otherwise known as thePhilippine Cooperative Code of 2008, the Authority in consultation with the DOTC, LTO, LTFRB, MARINA, OTC andthe concerned cooperative sector, hereby promulgates the following rules and regulations for the proper guidanceand compliance of Transportation Service Cooperatives.

Section 1. Coverage. This Rule shall cover all Transportation Service Cooperatives duly registered with theAuthority under RA 9520 which are organized to render public services such as land and sea/water transportationservices, limited to small vessels, for the safe conveyance of passengers and/or cargo. Transportation ServiceCooperative organized under the provisions of Executive Order No. 898, Series of 1983, shall be governed byChapter XIV of RA 9520, and by this Rule.

Section 2. Allied Businesses by Transportation Service Cooperative. Subject to pertinent national laws and localordinances, primary Transportation Service Cooperatives including secondary and tertiary federation ofcooperatives, may engage in a business related to transportation service, including but not limited to:

(1) Importation, distribution and marketing of petroleum products in accordance with existing laws;

(2) Operation of gasoline stations and transportation service centers;

(3) Importation, distribution and marketing of spare parts and supplies; and

(4) Marketing of vehicle/drivers insurance policies.

Section 3. Multi-purpose Cooperatives intending to engage in Transportation Service. Multi-purpose cooperativesintending to engage in regular passenger and/or cargo services as an additional activity shall comply with theforegoing requirements:

1. Amended Article of Cooperation and By-Laws;

2. CETOS;

3. Franchise and vehicle units requirement, as provided in this Rule and other requirements as may beprescribed by appropriate regulatory agencies; and

4. Amendment Fee.

Section 4. Registration Jurisdiction. Transportation Service Cooperative shall file its duly accomplished registrationdocuments with the CDA-Extension Office where its principal office is located, which shall have jurisdiction over thesaid cooperative.

Section 5. Capitalization. For purposes of registration with CDA, Transportation Service Cooperatives shall have aminimum paid up capitalization of Fifteen Thousand Pesos (P15,000.00).

However, to operate as such, the minimum capitalization and number of cooperatively owned units shall be inaccordance with the rules and regulations prescribed by the concerned government agency as shown below:

TYPE OF TRANSPORTATION SERVICECOOPERATIVE

MINIMUMCAPITALIZATION

MINIMUM NO.OF UNITS

A. LAND

Tricycle P 15,000.00 5

Jeepney P 30,000.00 5


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Taxi P 30,000.00 5

AUV/FX/Van P 30,000.00 5

Mini Bus/Bus P 50, 000.00 2

Trucks for Hire P 50, 000.00 2

B. WATER

Ship P 10,000,000.00 1

Ferry Boat P 5,000,000.00 1

Motorized Banca P 100,000.00 1

Section 6. Registration Requirements. The following shall be complied with upon filing of application:


(2) Articles of Cooperation and By-laws;

(3) Sworn Statement of the treasurer elected by the subscribers showing that at least twenty-five per centum(25%) of the authorized share capital has been subscribed and least twenty-five per centum (25%) of the totalsubscription has been paid: Provided, That in no case shall the paid-up share capital be less than FifteenThousand Pesos (P15,000.00);

(4) Pre-Membership Education seminar (PMES);

(5) Cooperative Education and Transport Operation Seminar (CETOS);

(6) Surety Bond Of Accountable Officers handling funds, properties and sureties;



(9) Undertaking to comply with the auditing and accounting standards prescribed by the Authority;

(10) Other requirements as may be required by law; and

(11) Registration Fee.

Section 7. Regulatory Power. The Authority shall have the power to regulate the internal affairs of TransportationService Cooperative, such as:





e. Other matters relating to their internal affairs of Transportation Service Cooperatives.

All matters relating to the Franchise or Certificate of Public Convenience and Necessity of Transportation ServiceCooperatives such as capitalization and investment requirements, equipment and facilities, frequencies, rate-fixing,registration, dropping and substitution of units, and such other matters affecting their transportation serviceoperations shall be governed by the following government agency:

(a) For land transportation - LTFRB/LTO/OTC

(b) For water transportation - MARINA/PCG

(c) For tricycle - LGU/LTO/OTC


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In case there are two (2) or more applicants for the same public service Franchise or Certificate of PublicConvenience and Necessity, all things being equal, preference shall be given to a Transportation ServiceCooperative by the concerned government agency.

Section 8. Monitoring Committee. The Authority shall establish a committee for the monitoring of TransportationService Cooperative composed of representative from the Authority, who shall be Ex-Officio Chairperson thereof,the LTO, LTFRB, OTC, LGU, and other concerned government agencies as may be necessary, and the NationalFederation of Transportation Cooperatives. Said Committee shall be organized within thirty (30) days from theeffectivity of this Rule and establish its own internal rules as to its operation, conduct of meeting, and other mattersnecessary to exercise such functions.

The Authority shall likewise create a Local Monitoring Committee in its extension offices to facilitate the monitoringof these Transportation Service Cooperatives. Said Committee shall likewise be organized within ninety (90) daysfrom the receipt of the rules and functions formulated by the National Committee convene every quarter to dischargeits functions and appoint a Secretary from among its members.

The permanent Secretariat shall come from the Authority.

The Committee shall have the following functions:

(1) To oversee the implementation of this Rule;

(2) To recommend changes on this Rule from time to time if a need arises;

(3) To assist as far as practicable the cooperative in settling inter and intra cooperative disputes;

(4) To submit quarterly accomplishment report including recommendation/resolution to be adopted in thesettlement of the aforesaid disputes to the CDA Board of Administrators through the Executive Director and tothe OTC Board of Directors through its Executive Director copy furnished all agencies involved.

Section 9. Continuing Education and Training. The concerned government agencies shall coordinate to supportregistered cooperatives by extending seminars for the purpose of continuing education on cooperative and otherrelated trainings in order to enhance the knowledge and capability of the officers as well as members of thecooperative. The concerned agencies involved in the Transportation Service Cooperative shall form a trainer's teamwhich shall formulated educational program/module to be used in the training seminar.

Section 10. Renewal of Franchise and Vehicle Registration. Renewals of franchise and vehicle registration shallbe granted to Transportation Service Cooperatives provided such cooperative presents a Certificate of GoodStanding from the Authority and the OTC. In the case of Tricycle Transportation Service Cooperative, a Certificateof Operation from the Local Government Unit concerned shall be required as proof that it has continuously providedthe required public transportation services.

Section 11. Settlement of Disputes. Intra/Inter cooperative dispute shall be settled as far as practicable throughconciliation-mediation mechanism embodied in the cooperative by-laws, which shall be in accordance with the CDAGuidelines for the Implementation of Conciliation-Mediation of Cooperative Disputes, and applicable laws.


However, in cases where the issue/s fall within the jurisdiction of the DOTC, LTFRB, LTO, MARINA, and OTC thesame shall be referred to the said agencies and shall be resolved in accordance with their regulations.

RULE VI - ELECTRIC COOPERATIVES

Pursuant to the provisions of Art. 134 (par.2) under Chapter XVII of Republic Act No. 9520, otherwise known as thePhilippine Cooperative Code of 2008, the Authority in consultation with the concerned cooperative sector herebypromulgates the following rules and regulations for the proper guidance and compliance of Electric Cooperatives.

Section 1. Purposes and Objectives. Electric Cooperatives shall be organized to undertake power generationutilizing new and renewable energy sources, including hybrid systems, acquisition, and operation ofsub-transmission and/or distribution and supply of electricity as its primary purposes. However, it shall not beprecluded to venture into any other purpose that other laws, rules, regulations, and their own By-laws may allow aslong as it is related to the primary purpose and objective of the cooperative. It shall also continue to undertake theimplementation of the Rural Electrification Program in their respective areas of coverage in consonance with theterms and conditions appurtenant to their Certificates of Franchise; provided the right of the Electric Cooperativesto exercise the power of eminent domain in furtherance of the rural electrification program, shall not be diminished,


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instead it shall be in full force and effect, subject to the requirements of the Constitution and existing relevant laws.

Section 2. Coverage. This Rule shall apply to all Electric Cooperatives registered with the Authority under R.A.9520 that may undertake power generation utilizing renewable energy sources, including hybrid systems, acquisitionand operation of sub transmission or distribution as its primary purposes. This Rule shall also cover new distributionutilities that will register with the Authority.

Section 3. Cooperative Principles and Practices. Electric Cooperatives registered with the Authority shall conducttheir affairs in accordance with Filipino culture, good values and experience and the universally-accepted principlesof cooperation which include, but are not limited to, the following:

1. Voluntary and Open Membership - Electric Cooperatives are voluntary organizations, open to all personsable to use their services and willing to accept the responsibilities of membership, without gender, social,racial, political or religious discrimination;

2. Democratic Member Control - Electric Cooperatives are democratic organizations that are controlled bytheir members who actively participate in setting their policies and making decisions. Men and women servingas elected representatives, directors, or officers are accountable to the membership. In primarycooperatives, members have equal voting rights of one-member, one-vote. Cooperatives at other levels areorganized in the same democratic manner;

3. Member Economic Participation - Members of the Electric Cooperatives contribute equitably to, anddemocratically control, the capital of their cooperative. At least part of that capital is the common property ofthe cooperative. They shall receive limited compensation or limited interest, if any, on capital subscribed andpaid as a condition of membership. Members allocate surpluses for any or all of the following purposes:developing the cooperative by setting-up reserves, part of which should at least be indivisible; benefitingmembers in proportion to their patronage of the cooperative's business; and supporting other activitiesapproved by the membership;

4. Autonomy and Independence - Electric Cooperatives are autonomous, self-help organizations controlledby their members. If they enter into agreements with other organizations, including government, or raisecapital from external sources, they shall do so on terms that ensure democratic control of their members andmaintain their cooperative autonomy;

5. Education, Training and Information - Electric Cooperatives shall provide education, training andinformation for their members, elected and appointed representatives, managers, and employees so that theycan contribute effectively and efficiently to the development of their cooperatives;

6. Cooperation Among Cooperatives - Electric Cooperatives serve their members most effectively andstrengthen the cooperative movement by working together through local, national, regional and internationalstructures; and

7. Concern for Community - Electric Cooperatives work for the sustainable development of theircommunities through policies approved by their members.

Section 4. Membership in the Electric Cooperatives. Membership in Electric Cooperatives registered with theAuthority shall have the following types:

a. Regular Member - refers to a natural person (member-consumer) with electrical service connection whohas the right to vote and be voted upon and entitled to all the rights and privileges of membership under theCode.

b. Associate Member - refers to a member-institution or entity availing of the services of electric cooperative,such as, but not limited to: corporation, industrial and commercial establishment, joint venture, othercooperative, place of worship, local government building or facility, etc, as represented by its head of suchestablishment or entity, but is not entitled to vote and be voted upon. However, shall be entitled to thepreferential rights and privileges as indicated in the by-laws and under the Code.

Section 5. Registration Requirements. The following are the requirements for the registration of electriccooperatives which shall be submitted in four (4) copies to the Authority:

A. Registration Documents:

a.1 For existing electric cooperative not registered with the Authority:

1. certificate true copy of the board resolution certifying the result of the vote approved through a


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referendum approving the registration of the cooperative with the Authority in compliance with Article128;

2. Certified copy of Articles of Cooperation and By-Laws;

3. Duly audited financial statement for the past two (2) immediately preceding years;

4. List of names of incumbent Board of Directors and their addresses certified by the Board Secretaryand attested to by the Chairperson;

5. Sworn Statement of the Treasurer of the authorized share capital, the subscribed share capital of themembers, and the amount of paid-up share capital of members and the amount of paid-up share capitalreceived by the Treasurer, to be submitted within six (6) months from the registration; and

6. Surety Bond of Accountable Officers handling funds, properties and sureties;

a.2 For new electric cooperatives:

1. Name Verification Slip;

2. Certified true copy of the Grant Franchise;

3. Articles of Cooperation and By-laws;

4. Sworn Statement of the treasurers elected by the subscribers showing that at least twenty-five percentum (25%) of the authorized share capital has been subscribed and at least twenty-five per centum(25%) of the total subscription has been paid: Provided, That in no case shall the paid-up share capitalbe less than Fifteen Thousand Pesos (P15,000.00);

5. Surely Bond Accountable Officers handling funds, properties and sureties;

6. Certificate of Pre-Membership Education seminar (PMES);

7. Economic Survey;

8. Undertaking to Change Name in the event that another cooperative has acquired prior right to theuse of the proposed name;

9. Detailed feasibility study indicating viability of the proposed business activity; and

10. Undertaking to comply with the auditing and accounting standards prescribed by the Authority.

a.3. Electric Cooperative Deemed Registered under Art. 144 of the Code:

1. Certificate of Registration and/or Certificate of Confirmation;

2. Articles of Cooperation and By-laws; and

3. Latest audited financial statement.

The said documents shall be submitted to the nearest office of the Authority of to the CDA Central Office, at theoption of the Cooperative. Upon submission of the abovementioned documents, the Authority shall issue the newcertificate of registration to the Cooperative.

B. Registration fee as prescribed by the Authority.

Section 6. Jurisdiction Upon Registration. Electric Cooperative intending to register with the Authority shall file theirapplication with the CDA Extension Office, which shall have jurisdiction over the said cooperatives upon approval oftheir registration. However, if an electric cooperative opted to register with the CDA Central Office as provided for inthe preceding Section, and such registration has been processed and approved by the CDA Central Office, suchregistration shall be forwarded to the CDA Extension Office where the cooperative is located and the sameExtension Office shall assume jurisdiction over the said cooperative.

Section 7. Registration Options. Electric Cooperatives registered with the National Electrification Administration(NEA) under Presidential Decree No. 269, as amended, which opt not to register with the Authority, are allowed toretain the world "cooperative" in their registered names, but they shall not be entitled to the benefits and privilegesprovided under R.A. 9520.


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Section 8. Registration of Electric Cooperatives. The registration on an Electric Cooperative with the Authorityunder Article 127 of the Code shall be submitted for approval to the members through a referendum, as a votingprocedure, specially called for such purpose.

The required number of votes for registration with the Authority shall be twenty percent (20%) of all members in goodstanding within the area of coverage. No proxy voting shall be allowed.

Unless otherwise provided in the By-laws of the cooperative, the term member in good standing shall be as definedin the Code of in this Rule.

Section 9. Procedure in the Conduct of Referendum for registration with the Authority. In compliance with Art. 128of RA 9520 hereunder are the procedures in conducting the same:

A. BOD Initiated Referendum. The Board of Directors shall undertake the following:

1. Issue Notice referendum indicating the following:

a. Date of Referendum;

b. Mode of Conduct of the Referendum which may either be:

b.1 survey Form; and

b.2 Assembly Meeting in the respective districts which maybe simultaneous sequential.

2. Posting/Publication of Notice of referendum shall be done not later than 30 days prior to the scheduledconduct of referendum.

3. Identification of members in good standing based on the qualification and disqualification provisions in theBy-laws.

4. Provision of Referendum Questionnaire Form to qualified members to vote whether to register or not toregister with the Authority.

5. Collection of Questionnaire forms and canvassing of Votes by the cooperative's Election Committee.

6. Reporting of the results of the canvassing, i.e. favor or not favor.

7. Certification by the Election Committee as to the result of the referendum duly noted by the majority of theBoard of Directors.

B. Member-Consumer Initiated referendum. In case the Board of Directors shall refuse to conduct a referendum,the Member-Consumers may initiate a referendum through a petition duly signed by at least three hundred (300)members of each district of the cooperation who are entitled to vote by filling the same to the Board of Directors.The Board of Directors shall act within thirty (30) days from receipt thereof whether to grant or deny said petition.Failure of the Board of Directors to act within the given period or the denial of the petition, the petitioners mayconduct motu proprio the said referendum through the procedures above prescribed. The result of the referendumshall be certified by a committee designated during the conduct of a referendum to supervise the same.

The general membership through their proponents for referendum shall submit all the documentary requirements forresignation to the concerned CDA Extension Office, which may register the applicant Electric Cooperative uponfinding that all the documents for registration are complete and in order.

Section 10. Amendments of Existing Articles of Cooperation and By-laws. Any provision or any part thereof in theexisting Articles of Cooperation and By-laws of the cooperative, which are found to be inconsistent or contrary tothe provisions of the Code and of this Rule shall be amended accordingly. Such amendments shall conform to theprovision of Art. 18 of the Code. Said application for amendments shall be filed with the concerned CDA ExtensionOffice or the CDA Central Office, at the option of the Cooperative, in four (4) copies for registration.

Section 11. Capitalization. An electric cooperative shall not be registered with the Authority unless it complies withthe financial requirements of minimum paid up capitalization of Five Million Pesos (P5,000,000.00).

Section 12. Share Capital in the Electric Cooperatives. Electric Cooperatives shall issue and distribute sharecertificates under the name of each of their members. Said share certificates shall take into consideration, amongothers, the previous equity contributions, and the amortization component, through the payments made, capitalbuild-up and other capital contributions. The interest on share capital shall be paid to the members in accordancewith the provision of Sec. 9, Rule 10 of the Rules and Regulations Implementing Certain Provisions of the Philippine


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Cooperative Code of 2008 (RA 9520).

Section 13. Quorum Requirement. Unless otherwise provided in the By-laws of the Electric Cooperative, quorumshall be five per centum (5%) of all the members entitled to vote.

Section 14. Term of Office. Unless otherwise provided in the By-laws of the Electric Cooperative, the term of officeof the members of the Board shall not exceed two (2) years, however, they shall be eligible for re-election.

Section 15. rates and Tariffs. All electricity rates and tariffs of electric cooperatives registered under the Authorityshall be subject to the rules on application and approval of and by the Energy Regulatory Commission.

Section 16. Settlement of Disputes. Intra/inter cooperative disputes shall be settled as far as practicable throughconciliation-mediation mechanism embodied in the cooperative by-laws, which shall be in accordance with the CDAGuidelines for the Implementation of Conciliation of Cooperative Disputes, and applicable laws.


However, in cases where the issue/s fall within the jurisdiction of the Energy Regulatory Commission, the same shallbe referred to the said agency and shall be resolve in accordance with this regulation.

RULE VII-DAIRY COOPERATIVES

Pursuant to the provisions of Republic Act. No. 9520, otherwise known as the Philippine Cooperative Code of 2008,the Cooperative development Authority and National Dairy Authority hereby promulgated the following rules andregulations for the guidance and compliance of the Dairy Cooperatives.

Section 1. Coverage. This Rule shall cover all dairy Cooperatives duly registered under R.A. 9520 organized for thepurpose of engaging in the procurement, processing and marketing of milk and dairy products.

Section 2. Organization. Fifteen (15) or more natural persons who are Filipino citizens, of legal age, having acommon bond interest and actually residing or working in the intended area of operation, may organize a dairycooperative.

Section 3. Purposes and Objectives. A Dairy Cooperative shall be organized for any or all of the following purpose:

1. To standardize the quality, uniformly of grade of milk, and other dairy products;

2. To assist its members a guaranteed market outlet, to bargain for the best price terms possible in the marketplace, including over-order premiums in milk marketing orders, and to market the milk efficiently, i.e., balancingplant needs, diverting milk surpluses, and assembling producer milk and to have the highest quality producermilk possible in the market; and

3. To effectively represent their constituting members in the legislative, regulatory and public relations arenas.

Section 4. Membership. Membership in Dairy Cooperative shall be open to all dairy farmers.

Section 5. Registration Jurisdiction. Any applicant Dairy Cooperative shall file its duly accomplished application forregistration with the VDA Extension Office, which shall have jurisdiction over the said cooperative.

Section 6. Registration Requirements. The following shall be compiled with upon filing of application:

1. Name Verification;

2. Articles of Cooperation and By-laws;

3. Sworn Statement of the treasurer elected by the subscribers showing that the least twenty-five per centum(25%) of the authorized share capital has been subscribed and at least twenty-five per centum (25%) of thetotal subscription has been paid: Provided, That in no case shall the paid-up share capital be less than FifteenThousand Pesos (P15,000.00);

4. Pre-membership Education Seminar (PMES);

5. Surety Bond Accountable Offices handling funds, properties and sureties;

6. Economic Survey;

7. Undertaking to Change Name in the event that another cooperative acquired prior right to the use of the


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proposed name;

8. Undertaking to comply with the auditing and accounting standards prescribed by the Authority;

9. Other requirements as may be required by law; and

10. Registration fee.

Section 7. Capitalization. A Dairy Cooperative shall have a minimum paid-up capitalization of at least FifteenThousand Pesos (P15,000.00).

Section 8. Regulatory Power. The Authority shall have the power to regulate the internal affairs of DairyCooperative, such as:


b. Formulation of Rules and procedures and the conduct of meetings of the General Assembly, Board ofDirectors and Committees;


d. Allocation and distribution of net surplus; and

e. Other matters relating to the internal affairs of Dairy Cooperatives.

All matters relating to the technical and operations concerning dairy business of such Dairy Cooperative shall beregulated by NDA, DOH-BFAD and other concerned government agency.

Section 9. Settlement of Disputes. Intra/inter cooperative disputes shall be settled as far as practicable throughconciliation-mediation mechanism embodied in the cooperative by-laws and in applicable laws.

Should such conciliation-mediation proceedings fail, the matter may be settled through voluntary arbitration by theAuthority or adjudication by the Commission or in a Court of competent jurisdiction.

However, in cases where the issue/s fall within the jurisdiction of the NDA, DOH-BFAD the same shall be referred tothe said agencies and shall be resolved in accordance with their regulations.

COMMON PROVISIONS

Section 1. Requirements. A copy of these Rules shall be among the documents required to be kept ready andaccessible for inspection and examination by the members of the cooperative and the Authority in accordance withArt. 52 of the Code.

Section 2. Interpretation. Unless otherwise stated in these Rules, In case of doubt as to the meaning of anyprovision of these Rules, the same shall be resolved and interpreted liberally in favor of the cooperatives and theirmembers.

Section 3. Suppletory Rule. Special Rules, Circulars, Orders and other issuances by the appropriate governmentagencies in pursuance of the provisions of the Code and these Rules, and not inconsistent thereto, shall havesuppletory application to these Rules.

Section 4. Mandate. The Authority is mandated to implement and enforce these Rules and Regulations.

Section 5. Separability. If any provision of these Rules and Regulations is declared null and void or unconstitutional,the other provisions not affected thereby shall continue to be in force and effect.

Section 6. Amendment. These Rules and Regulations shall be subject to automatic review three (3) years after theeffectivity thereof. Any amendment thereto, shall be subject to the review and approval of the JCOCC.

Section 7. Effectivity. These Rules and Regulations shall take effect fifteen (15) days after publication in the OfficialGazette or in a newspaper of general circulation.

RECOMMENDING APPROVAL:

THE BOARD OF ADMINISTRATORS COOPERATIVE DEVELOPEMNT AUTHORITY

LECIRA V. JUAREZChairman


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This Implementing Rules and Regulations (Part I) was approved by the Joint Congressional Oversight Committee onCooperatives during its meeting on February 16, 2010 at the Senate of the Philippines, Pasay City pursuant toArticle 138 of RA 9520.

Members of the Joint Congressional Oversight Committee on Cooperatives.

For the Senate of the Philippines:

Sen. JUAN MIGUEL F. ZUBIRIChair, Senate Panel

For the House of the Representatives:

Rep. ERNESTO C. PABLOChair, House Panel

The Lawphil Project - Arellano Law Foundation


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