Port and Terminal Operations Regulation in the Philippines: A Guide to MARINA Rules

The regulation of port and terminal operations in the Philippines is primarily vested in the Maritime Industry Authority (MARINA). MARINA is the single maritime administration responsible for implementing and enforcing maritime laws, including the Domestic Shipping Development Act of 2004 (Republic Act No. 9295). To operate a domestic shipping service, a ship operator must first obtain a Certificate of Public Convenience (CPC) from MARINA. This certificate authorizes the operation of vessels for the carriage of passengers or cargo. MARINA also regulates safety standards, rates, and the conduct of ship operators.

The Legal Framework for Port and Terminal Operations

The regulatory landscape for Philippine ports and shipping is defined by two key instruments: Republic Act No. 9295 and MARINA Memorandum Circular No. 74-A (1995).

Republic Act No. 9295, also known as the Domestic Shipping Development Act of 2004, sets out the policy of the State to promote a strong and competitive domestic merchant fleet. It grants MARINA the authority to issue certificates of public convenience, set safety standards, and oversee the financial capacity of ship operators.

MARINA Memorandum Circular No. 74-A provides the procedural rules for cases heard before MARINA, including applications for CPCs, petitions for rate adjustments, and complaints for violations. It ensures an inexpensive, speedy, and equitable disposition of cases.

Who May Operate a Domestic Shipping Service?

Under Section 3 of Republic Act No. 9295, a domestic ship operator must be:

• A citizen of the Philippines;
• A commercial partnership wholly owned by Filipinos; or
• A corporation at least 60% of the capital of which is owned by Filipinos.

The operator must be duly authorized by MARINA to engage in domestic shipping. Section 5 of the same Act states that no franchise, certificate, or other form of authorization for the carriage of cargo or passengers in the domestic trade shall be granted except to domestic ship owners or operators.

How to Obtain a Certificate of Public Convenience (CPC)

The process for obtaining a CPC is outlined in Rule 5 of MARINA Memorandum Circular No. 74-A. The key steps are:

1. Filing of Application: The application must be filed with the appropriate Maritime Regional Office (MRO) or the Central Office. Jurisdiction is acquired upon filing and payment of required fees.
2. Compliance with Requisites: No CPC shall be granted without complying with the three requisites under Section 16(a), Chapter 2 of the Public Service Act (CA No. 146, as amended):

• Filipino ownership;
• Public necessity; and
• Financial capacity.

3. Publication and Notice: The notice of hearing must be published once in a newspaper of general circulation at least 10 days before the initial hearing. Affected operators must be individually furnished a copy of the notice and application at least 5 days before the hearing.
4. Pre-Trial and Hearing: A pre-trial conference is conducted to simplify issues and explore amicable settlement. For uncontested applications, a summary procedure is used.
5. Decision: MARINA shall render a decision within 15 days for uncontested cases and 30 days for contested cases after the case is submitted for resolution.

Safety and Operational Standards

Section 9 of Republic Act No. 9295 mandates that all vessels operated by domestic ship operators must at all times be in seaworthy condition, properly equipped with adequate life-saving, communication, and safety equipment. They must be operated and maintained in accordance with MARINA standards and manned by duly licensed and competent crew.

MARINA has the power to inspect vessels and all equipment on board to ensure compliance with safety standards. Section 10 further empowers MARINA to require all domestic ship operators to comply with operational and safety standards, maintain vessels in safe and serviceable condition, and meet safe manning requirements.

Rates and Monopolized Routes

Under Section 8 of Republic Act No. 9295, domestic ship operators are authorized to establish their own domestic shipping rates, provided that effective competition is fostered and public interest is served. MARINA monitors all shipping operations and may intervene where public interest needs protection.

For monopolized routes, Section 13 grants MARINA the authority to draw up rules and regulations to determine the fairness of passenger and cargo rates, considering factors such as the economic effect on the region, volume of passengers and cargo, and quality of service.

Compulsory Insurance Coverage

Section 14 of Republic Act No. 9295 requires every domestic ship operator to submit annually adequate insurance coverage for each passenger and for cargo. The total amount of coverage must be equivalent to the total number of passenger accommodations or total cargo capacity offered by the vessel. If the operator has multiple vessels, the required coverage is based on the largest operating vessel. The insurance must be obtained from a duly licensed insurance company or international protection and indemnity association.

Prohibited Acts and Penalties

Section 16 lists prohibited acts for domestic ship operators, including:

• Operating without a valid certificate of public convenience;
• Refusing to accept or carry passengers or cargo without just cause;
• Failing to maintain vessels in safe and serviceable condition;
• Failing to obtain or maintain adequate insurance coverage; and
• Failing to meet safe manning requirements.

Section 18 empowers MARINA to impose fines, suspend, or revoke certificates for violations. Penalties may include suspension or revocation of the CPC, fines, or both, depending on the violation.

Frequently asked questions

What is a Certificate of Public Convenience (CPC)? A CPC is the license or authority issued by MARINA to a domestic ship operator to engage in domestic shipping, as defined in Section 3 of Republic Act No. 9295.

How long is a CPC valid? Under Section 10 of Republic Act No. 9295, no CPC shall be valid for a period of more than 25 years.

Can a foreign vessel operate between Philippine ports? No. Section 6 of Republic Act No. 9295 prohibits foreign vessels from transporting passengers or cargo between ports within Philippine territorial waters, except upon the grant of a Special Permit by MARINA when no domestic vessel is available and public interest warrants it.

Practical takeaways

• MARINA is the primary regulator for port and terminal operations, issuing CPCs and enforcing safety and rate regulations.
• Filipino ownership is required for domestic ship operators, with at least 60% Filipino capital for corporations.
• Compliance with safety, insurance, and manning standards is mandatory and subject to inspection and penalties.
• Rates are generally deregulated, but MARINA may intervene to protect public interest, especially on monopolized routes.
• Violations can lead to fines, suspension, or revocation of the CPC.

Primary sources

The rules discussed above are drawn from the following primary sources, as published in the Official Gazette and the national statute book.

• IRR of REPUBLIC ACT NO. 10635 - 2022 IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT 10635, "ACT ESTABLISHING THE MARINA AS THE SINGLE MARITIME ADMINISTRATION RESPONSIBLE FOR THE IMPLEMENTATION AND ENFORCEMENT OF THE INTERNATIONAL CONVENTION ON STANDARDS OF TRAINING, CERTIFICATION AND WATCHKEEPING FOR SEAFARERS, 1978, AS AMENDED, AND INTERNATIONAL AGREEMENTS OR COVENANTS RELATED THERETO:

• REPUBLIC ACT NO. 9295 - AN ACT PROMOTING THE DEVELOPMENT OF PHILIPPINE DOMESTIC SHIPPING, SHIPBUILDING, SHIP REPAIR AND SHIP BREAKING, ORDAINING REFORMS IN GOVERNMENT POLICIES TOWARDS SHIPPING IN THE PHILIPPINES, AND FOR OTHER PURPOSES

• MARINA MEMORANDUM CIRCULAR NO. 74-A, July 13, 1995

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.