DENR Administrative Order No. 01 of 1989: Revised Industrial Tree Plantations Regulations.

The Administrative Order, made under Presidential Decree No.705 as amended, prescribes the terms of leases for industrial tree plantations (ITP) and the conditions and procedures for granting them. ITPs are defined as areas of forest land planted to tree crops for industrial and energy uses (sect. 3[a]). Areas that may be leased for ITPs are essentially bare or grass- or brush-covered areas (sect. 4), but not including areas reserved for public purposes, areas to be reforested by concessionaires or adequately-stocked logged-over areas (sect. 5). (Up to 30 percent of an ITP may be adequately-stocked logged-over areas where justified by contiguity to poorly stocked areas (sect. 29). The area of a lease is limited to the amount, up to 20 000 hectares, that the lessee can develop in 5 years. Areas larger than 20 000 hectares may be leased on the basis of exellent performance (sect. 6). The ITP lease is for 25 years, renewable at the option of the lessee for another 25 years (sect. 8). In the first three years the lessee is required to plant 30 percent of the area, reaching 100 percent in five years (sect. 26). The obligations of the lessee are spelled out in part in the regulations,in part in the standard lease appended to the regulations as Annex C, and in part in the comprehensive development and management plan that the lessee is required to submit during the first year of the lease (sect. 14). The basic obligations of the lessee is to 'plant and raise trees' (Annex C(1)). Although the stated purpose of the ITP includes energy-supply, presumably through fast-growing species, the lease requires 'at least sixty (60) surviving seedlings of suitable dipterocarp species per hectare of the area after three (3) years from the start of land development' (Annex C(19). Both the regulation and standard lease restricts cutting on river banks (sect. 40; Annex C(19). Unique, rare and endangered trees must be protected (Annex C(19)). Five edible fruit-trees must be planted on every hectare to sustain wildlife (Annex C(19). Enrichment planting may be required where natural trees are cut (sect. 30).
The lessee is entitled to a number of incentives to enter an ITP agreement. First, the leasehold is rent free (Annex C(5)). Then, trees and other products planted and grown under an ITP Lease agreement belong to the lessee who shall have the right to sell, convey or dispose of them (sect. 23), including to export them, in any form, without any restrictions in quantity or volume (sect. 25). Natural timber may also be cut by a lessee and related forest charges are reduced by 75 percent (sect. 16). On adequately stocked areas, mature and defective trees may be cut "subject to the condition that at least twenty percent of such area shall be preserved for biological diversity. In other areas of the ITP lease, any naturally grown standing tree may be cut subject to certain conditions which may inlcude enrichment planting of the area (sect. 30). There are also numerous tax advantages to the lessee (sects. 17, 18 and 20) as well as standard investment incentives (sect. 22). Although the lease is ordinarily not assignable (Annex C(12)), it may be assigned in order to secure credit for the ITP (sect. 21). Operations under the lease are subject to an annual report (Annex C(16)) and to monitoring by different services of the Ministry (sect. 27). The lease is subject to cancellation if its conditions are not complied with (sect. 28, Annex C(7)). Failure to maintain the required rate of planting is a cause for cancelling the lease, but it may also result in a reduction of the area under lease to correspond with the lessee's capabilities (Annex C(8).