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Improving Access of Indigenous People to
Fiscal Benefits from Energy-Based
Resources for Watershed Environmental
Protection
Rose-Liza Eisma Osorio
University of Cebu, Philippines
12th IUCNAEL COLLOQUIUM 2014
Tarragona, Spain
3 July 2014
Critical Watersheds & Ancestral
Domains
Of the total Philippine land area, about 70%
is considered as major watersheds within
419 river basins all over the Philippine
archipelago (DENR-ERDB, 2011).
Most healthy forests are within ancestral
domains traditionally managed by
indigenous communities
The BUHITA – Ancestral Domain
 The BUHITA ancestral domain has a
total land area of 36,547 hectares.
 In 2011, the BUHITA ancestral
domain has a primary forest cover
of 12,513 hectares or 34% of the
ancestral domain and the secondary
forest cover of 7,677 hectares or
21% of the land area.
 With the claimed forest cover,
tropical flora and fauna is
abundant.
The BUHITA – Ancestral Domain
Tagoloan
River

The Bukidnon Higaonon Tribal
Association, Inc. (BUHITA), one of the
oldest Higaonon groups, unified to
secure the Certificate of Ancestral
Domain Claim (CADC, 4 June 1998 by
DENR) and Certificate of Ancestral
Domain Title (CADT, 17 July 2009 by
NCIP).

The BUHITA cradles tributaries and
systems of three major watersheds
(and rivers), namely: [1] Tagoloan,
[2] Pulangi and [3] Sawaga.
Pulangui
River
Sawaga
River
Source: TROPICS, MIPPEG
Pulangui Complex
Pulangi I
?-Batang
150 MW
Pulangi II
Pulangi
III
Pulangi
IV
255 MW
Pulangi V
300 MW
Source: Dr. Randell Espina
Objectives
To present and understand potential
sources of funds, specifically from
environmental charges intended for
watershed management, that could
potentially help support and alleviate the
lives of BUHITA and other Communities.
2. To explore sustainable mechanisms to
help support indigenous communities
protecting headwaters of the watershed.
1.
RA 9136- Electric Power Industry Reform Act(EPIRA)of 2001
Section 66. Benefits to host communities (ER 1-94) generation companies and energy resource developers are
mandated to provide direct benefits to the host communities
of the energy generating facilities and/or energy resource
developers, which include privately-owned corporations or
entities utilizing the national wealth of the locality.
One-centavo per kilowatt-hour (P0.01/kWh) of the
Electricity Sales which shall apply to Generation Facilities
and/or energy resource development projects located in all
barangays, municipalities, cities, provinces and regions.
RA 9136- Electric Power Industry Reform Act(EPIRA)of 2001
Section 3 (b) (iii). Beneficiaries with respect to energy resources:
“The host LGU or region is that where the hydro reservoir is located
as delineated by detailed topographic, geological and geo-technical
investigations, reservoir and dam height optimization studies, and
as delineated by detailed ground surveys.”
RA 9136 IRR (Rule 29, Part A) clearly identifies that the main
beneficiaries are those communities where the facilities
(Reservoir, Penstock and Power Plant) are physically located.
RA 9136- Electric Power Industry Reform Act(EPIRA)of 2001
Section 34(d)
Environmental Charge at P 0.0025/kwh which shall accrue to an
environmental fund to be used solely for watershed
rehabilitation and management. Said fund shall be managed by
NPC under existing arrangements.
RA 9136 IRR (Rule 18, Sec 2(v))
Environmental Charge of P 0.0025 per kWh sales to be used for
rehabilitation and management of watershed areas.
The universal charge shall be non-bypassable charge which shall
be passed on and collected from all end-users on a monthly basis
by the distribution utilities.
Legal Framework
Year
Office
Policy
Name
Salient Rules
1971
NAPOCOR
RA
6395
An Act Revising the Charter Section 3. (f) Take water from any public stream,
of the National Power
river, etc. for the (g) development of hydro project…
Corporation (NAPOCOR)
(n) control watersheds surrounding the reservoir and
(o) prevent environmental pollution and conserve
natural resources
1976
NWRB
PD
1067
The Water Code of the
Philippines
Article 3(d). Water resources protection and control
1986
OEA
EO 193
The Act Providing for the
Reorganization of the
Office of Energy Affairs
Section 3. Ensure continuous supply of energy and
explore and develop indigenous energy resources
1987
NAPOCOR
EO 224
Complete Jurisdiction,
Control and Regulation
Over Watershed Areas and
Reservations Surrounding
its Power Generating
Plants
Section 1. Watersheds: (1) Upper Agno, (2) Angat, (3)
Caliraya-Lumot, (4) Makiling-Banahaw, (5) BuhiBarat, (6) Tiwi.
Section 2. Watershed protection and management
1992
DOE
RA
7638
DOE Act of 1992
Section 5(i). Devise ways & means to give benefits to
the people
Source: Dr. Randell Espina
Legal Framework
Year
Office
Policy
Name
Salient Rules
1994
DOE
ER 1-94
Benefits to Host Communities
Host communities benefits
1997
DENR
RA 8371 Indigenous Peoples Rights Act
of 1997 (IPRA)
Section 1. Promote, recognize, respect and protect
the IPs.
2001
DOE
RA 9136 Electric Power Industry
Reform Act (EPIRA)
Section 34(d). Environmental Charge at P
0.0025/kwh for watershed rehabilitation and
management.
Section 66. Benefits to host communities (ER 1-94)
2004
DENR
RA 9275 Philippines Clean Water Act
Section 9. National water quality management fund
2008
DOE
RA 9513 Renewable Energy Act of 2008 Section 31. Incentives for RE host communities (80%
(RE)
of share from royalty to be used for subsidy)
Source: Dr. Randell Espina
NAPOCOR Managed Watersheds
ERC Case No.
Date Petitioned
2011
2012-040 RC
07 March 2012
2013-038 RC
01 April 2013
Particulars
Missionary Electrification
Environmental Charge
Stranded Debts
Stranded Contract
Costs (NPC&Dus)
Equalization of Taxes and
Royalties
Total
Amount (P)
Balance (P)
Date (as of)
100,550,000.00 703,510,000.00 30 September 2011
287,436,888.65 838,000,000.00
July 2012
300,666,802.17
Collections
Interests
Disbursements
Balance
18.238
0.998
---Start of Collection
April 2013
----
0.043
0.058
-------
18.263
0.339
-------
0.02
0.72
-------
----
----
----
19.236
0.101
18.602
0.735
Total Collection Acrrued from
Universal Charge as of 31 October 2011
(In Billion Php). Enano, et al, 2013
Current Challenges
Indigenous peoples communities, directly hosting such
resource within their ancestral lands and/or domains
but those residing in the watershed headwaters
(upstream) far from the facility, generally do not
receive funds for watershed management.*
Existing guidelines allow discretion on the part of NPC
to enable access by indigenous peoples communities
(Section 2, ERC Rules and Regulations regarding the
utilization and disbursement of UC-EC).
No royalties given to the direct IP communities
dwelling alongside the river in the upstream area.*
*Based on Enano, et al 2013 (ADDU-TROPICS) study
ER 1-94 – Benefits from Pulangui
HEPP-4
Rights of Indigenous Peoples

1987 Constitution. Article II, Section 22. The State recognizes
and promotes the rights of indigenous cultural communities
within the framework of national unity and development

RA 8371 (IPRA) Right to Benefits. The ICCs/IPs have the right
to benefit from the utilization, extraction, use and development
of lands and natural resources within their ancestral
lands/domains and to be compensated for any social and/or
environmental costs of such activities.

Rule III, Part II, Section 2(a) of RA 8371 IRR. Right to Benefits.
The ICCs/IPs have the right to benefit from the utilization,
extraction, use and development of lands and natural resources
within their ancestral lands/domains and to be compensated for
any social and/or environmental costs of such activities.
Concept of Ancestral Domains
Ancestral Domains refer to all areas generally belonging to ICCs/IPs
comprising lands, inland waters, coastal areas, and natural resources
therein, held under a claim of ownership, occupied or possessed by
ICCs/IPs, themselves or through their ancestors, communally or
individually since time immemorial, continuously to the present except
when interrupted by war, force majeure or displacement by force,
deceit, stealth or as a consequence of government projects or any other
voluntary dealings entered into by government and private individuals,
corporations, and which are necessary to ensure their economic, social
and cultural welfare.

Includes ancestral land, forests, pasture, residential, agricultural, and
other lands individually owned whether alienable and disposable or
otherwise, hunting grounds, burial grounds, worship areas, bodies of
water, mineral and other natural resources, and lands which may no
longer be exclusively occupied by ICCs/IPs but from which their
traditionally had access to for their subsistence and traditional activities,
particularly the home ranges of nomadic and shifting cultivator ICCs/IPs
Rights to Ancestral Domains

Include the right to develop, control and use lands and territories
traditionally occupied, owned, or used; to manage and conserve
natural resources within the territories and uphold the
responsibilities for future generations; to benefit and share the
profits from allocation and utilization of the natural resources
found therein; the right to negotiate the terms and conditions for
the exploration of natural resources in the areas for the purpose
of ensuring ecological, environmental protection and the
conservation measures, pursuant to national and customary laws;
the right to an informed and intelligent participation in the
formulation and implementation of any project, government or
private, that will affect or impact upon the ancestral domains and
to receive just and fair compensation for any damages which they
sustain as a result of the project; and the right to effective
measures by the government to prevent any interfere with,
alienation and encroachment upon these rights.
Policies on IP Rights and their
Ancestral Domains

The right of ownership and possession by the indigenous
communities of their ancestral domains is distinct and do not
constitute part of the public domain (J. Puno, Separate
Opinion, Cruz v. Secretary of Environment and Natural
Resources, et al, G.R. No. 135385, December 6, 2000.)

Enabling law for IP communities considers ancestral domains to
include “such concepts of territories which cover not only the
physical environment but the total environment including the
spiritual and cultural bonds to the areas which the ICCs/IPs
possess, occupy and use and to which they have claims of
ownership”
Policy Proposals
Integrating Rights of Indigenous Communities into Energy
Regulations and Watershed Perspective into the Current Policies
• Definition of host communities should not be LGU-centric, with
preferential benefits given only to LGUs (barangay to regional)
close to the facility.
• Main beneficiaries to include indigenous peoples communities
directly hosting the facilities within their ancestral lands
and/or domains
Policy Proposals
Guidelines for the utilization of government subsidy shall
specifically state the priority distribution of funds for
reforestation and watershed management
• Need to integrate a watershed perspective in the current
policies
• Reliability of energy derived from the hydro-electric facility,
such as Pulangi HEPP4, greatly depends on the healthy
condition of the watershed and participation of all
stakeholders.
Watersheds and IPs
Findings showed that
‘traditional resource
management practices of ICCs
are more effective in
protecting the forest than
strict protection of government
alone’ (World Bank
Independent Review, Nelson &
Chomitez 2009, Protected Area
Effectiveness in Reducing
Tropical Deforestation)
Source: MIPPEG
Watersheds and IPs
Low Levels of forest destruction in areas that had been declared as strict
protection parks by the government compared to traditionally protected
areas by ICCs’ (Manuel Guarigata Sr., Center for International Forestry
Research 2011)
Policy Proposals
Expanding the operational definition of ‘host communities’
Host communities should be construed to mean not only the LGUs but also
upstream communities protecting the headwaters and downstream communities
until the final discharge point. Preferential treatment shall be given to IP
communities protecting the headwaters as target host communities.
Changing the operational meaning of ‘watersheds’
‘The topographic and hydrological boundaries that starts from the highest ridge,
where surface runoff starts to flow, to the point of the last scheme of water
utilization, which is the hydro or geothermal power plant’
Final Word: Energy as possible source of
improving sustainability of watersheds

Enhance policy guidelines that will enable more
inclusionary administrative guidelines that
address the due benefits of IPs residing within
energy-generating watershed locales and the
need to improve watershed protection and
management