Creating the National Dendro Development Corporation, Prescribing Its Powers and Functions, and Appropriating Funds Therefor

Case Overview and Summary

Summary of Executive Order No. 662

Creation of National Dendro Development Corporation (NDDC):
- Section 1: NDDC is created to plan and implement a national dendro development program for energy production, reforestation, and rural employment.

Purpose of NDDC:
- Section 2:
• Establish fast-growing tree farms on unused or underutilized lands. (2a)
• Develop transportation systems for tree products. (2b)
• Develop processing plants to convert tree products into fuels and other products. (2c)
• Develop a marketing system to stabilize supply and prices. (2d)
• Conduct research and development on tree product conversion and improved tree farming techniques. (2e)

Powers and Functions of NDDC:
- Section 3:
• Prepare, plan, and implement the national dendro development program. (3a)
• Promote, encourage, and assist public and private entities with related functions. (3b)
• Invest and grant loans for tree farms, processing plants, transportation, and marketing. (3c)
• Approve or disapprove loans from other lenders to NDDC borrowers. (3d)
• Organize wholly or partly owned subsidiaries for transportation, processing, manufacturing equipment, and marketing. (3e)
• Acquire properties necessary for tree production, with conditions. (3f)
• Borrow funds and issue bonds or other evidences of indebtedness. (3g)
• Cooperate and coordinate with other government agencies. (3h)
• Report annually on the program's status and publish the report. (3i)
• Have corporate powers, including the ability to sue and be sued, with some exceptions. (3j)
• Exercise other necessary powers to carry out its business and purposes. (3k)

Governance and Management:
- Section 4: NDDC is governed by a Board of Directors consisting of specified ministers and officials.
- Section 5: The Board has powers and duties related to implementing the order, formulating policies, adopting budgets, fixing compensation, and establishing employment policies.
- Section 6: The General Manager, appointed by the President, manages the Corporation's operations and has specified powers and duties.
- Section 7: The Auditor General is the ex officio Auditor of the Corporation.

Capital and Financing:
- Section 8: NDDC has an authorized capital stock of 2 billion pesos, to be subscribed and paid for by the government and its instrumentalities.
- Section 9: NDDC may borrow from foreign or domestic sources, issue bonds, and have specified terms and conditions for domestic and foreign indebtedness, including tax exemptions and government guarantees.

Dendro Projects and Tax Exemptions:
- Section 10: NDDC shall execute all dendro projects authorized in Public Works Acts.
- Section 11: NDDC is exempt from various taxes, duties, fees, and charges imposed by the government and its agencies.

Tree Farmer Associations and Land Designation:
- Section 12: Non-stock, non-profit member-owned tree farmer associations or corporations shall be encouraged and formed, with guiding principles and requirements specified.
- Section 13: NDDC has the authority to designate certain lands as suitable for dendro production, subject to Presidential approval. Tree products are exempted from forestry regulations and charges.

Rules and Regulations:
- Section 14: NDDC shall promulgate rules and regulations to accomplish the objectives and purposes of the Order, particularly on land use approval, tree farmer corporation formation, and granting loans.