DENR Administrative Order

No. 24
August 23, 1996

SUBJECT : Rules and Regulations Governing

the Socialized Industrial Forest
Management Program

Pursuant to Executive Order No. 263 dated 19 July 1995, PD

No. 705, as amended, Executive Order No. 278 dated 25 July 1987,
the Social Reform Agenda and Philippines 2000 program, and in line
with the policy of the Government to ensure the development and
management of forest land resources on a sustainable basis, promote
equitable distribution of natural resources, provide a healthy
environment, and promote economic upliftment of the people, the
following rules and regulations for the establishment of socialized forest
plantations are hereby promulgated.

Sec. 1 Basic Policy. It is the policy of the DENR to

ensure the equitable access and sharing of rights to natural resources
development and utilization by providing opportunities to the people to
participate actively in forest plantation development. In line with this
policy, the DENR shall provide security of tenure to the participants
through the issuance of a Socialized Industrial Forest Management
Agreement (SIFMA).

As an incentive for the participation of qualified three planters,

they shall be granted the privilege to benefit from their crops which shall
consist primarily of trees for wood production, non-timber species and
other cash crops that may be interplanted. Under the program, the
general welfare of society shall be enhanced through the resulting
environmental enhancement effects of forest cover restoration and the
production of forest goods and services, both on-site and off-site.

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 Sec. 2 Objectives. The Socialized Industrial
Forest Management Program (SFLMP) is expected to result in:

2.1 Increased supply of wood and other forest products;

2.2 Accelerated reforestation and rehabilitation of the country’s

open and denuded forest lands and effective protection of
existing natural forests;

2.3 Conservation of soil and water, biodiversity and enhancement

of environmental conditions in general;

2.4 The generation of additional sources of income and livelihood

and help in the economic upliftment of the people in the uplands;
and

2.5 More equitable access to forest resources.

Sec. 3 Definition of Terms. The following terms are

to be understood and interpreted as follows for purposes of this Order:

3.1 Socialized Industrial Forest Management Agreement

(SIFMA) refers to an agreement entered into by and between
a natural or juridical person and the DENR wherein the latter
grants to the former the right to develop, utilize and manage a
small tract of forest land, consistent with the principle of
Sustainable Development.

3.2 SIFMA Holder refers to a qualified person who has entered

into a SIFMA with the DENR.

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3.3 Socialized Industrial Forest Plantation (SIFP) refers to a
tract of land planted primarily to trees and other products to
support manufacturing and processing facilities and/or to supply
wood and energy requirement.

3.4 Brushland refers to land which is predominantly covered with

shrub growth or short, stunted trees or shrubs.

3.5 Open and Denuded Land refers to land that has been
depleted of its natural forest cover and is predominantly
covered by grasses, herbaceous species or bare soil.

3.6 DENR refers to the Department of Environment and Natural

Resources.

3.7 Secretary refers to the DENR Secretary.

3.8 FMB refers to the Forest Management Bureau

3.9 RED refers to the DENR Regional Executive Director.

3.10 RTD refers to the Regional Technical Director for Forestry.

3.11 PENRO refers to the Provincial Environment and Natural

Resources Office.

3.12 CENRO refers to the Community Environment and Natural

Resources Office.

3.13 LGU refers to the Local Government Unit.

3.14 NGO refers to the Non-Governmental Organization.

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 Sec. 4 Areas Available for SIFMA. SIFMAs may
cover all grasslands, brushlands and open and denuded forest lands
under the jurisdiction of the DENR, including those within government
reforestation projects, that are not otherwise to be classified under the
National Integrated Protected Areas System (NIPAS) nor subject of
Certificate of Ancestral Domain Claims (CADC), Certificate of
Ancestral Land Claims (CALC), vested rights, licenses, permits or
management agreements; provided, that areas subject of CADC,
CALC, vested rights, licenses, permits or management agreements may
be made available for SIFMA by prior express and written agreement
of the holder of such claim or right; provided, further, that areas
covered by pending applications for Certificates of Ancestral
Domain/Land Claim shall not be open to applications for SIFMA until
the DENR, after due notice and hearing in accordance with DAO No.
2, series of 1993 or pertinent guidelines, shall have denied or rejected
with prejudice such application for CADC/CALC; provided, finally,
that areas that are currently occupied based on a legal claim shall
likewise not be open to applications for SIFMA without the prior
express and written agreement of the occupant or until the legal claim
shall have been resolved.

Sec. 5 Size of the Area. The area that may be

awarded in a SIFMA under this program is as follows:

For individual /single family --- 1 to 10 hectares

For association/cooperative --- over 10 hectares to 500
hectares

Sec. 6 Selection and Publication of SIFMA Sites.

6.1 Each CENRO shall identify potential SIFMA sites with the aid
of the latest forest resource information and other baseline data.
SIFMA sites shall be areas suitable for production forests,

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 accessible, located in contiguous blocks, or adjacent to existing
natural forest, plantation forests, existing Community-Based
Forest Management (CBFM) projects. Furthermore the areas
should be devoid of claim conflicts.

The CENRO shall then inform, in writing, the concerned LGUs and,
together with their representatives, validate on the ground the feasibility
of the proposed SIFMA sites. The validated sites, endorsed by the
concerned LGUs, shall then be indicated in a map of appropriate scale
which map, together with all pertinent data and information, shall be
forwarded through channels to the DENR Secretary for Approval.

The approved map and all other documents shall be furnished the
Director, FMB for data base management and monitoring purposes.

Upon approval of a SIFMA site, the CENRO shall, within fifteen (15)
days from receipt of the notice of approval by the Secretary, inform the
concerned LGUs and together with the latter, conduct an information
campaign to inform the public about the program. Copies of the
program guidelines and the site map shall be posted in strategic places
in the municipality and barangay where the site is located.

Sec. 7 Qualified Applicants. The following individuals and

organizations who meet the following qualifications may participate in
the program:

Individuals/single family units who are Filipino citizens, of legal age and
preferably residents of the municipality where the area is located.
Actual occupants of the area will be given priority. Provided that, in
case of government employees, they shall qualify with the consent of
their respective heads of agency.

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7.2 Cooperatives and associations whose members are Filipino
citizens and residents of the province where the SIFMA site is
located, and duly registered with the Cooperative Development
Authority or Securities and Exchange Commission, as the case
may be. These cooperatives and associations must show proof
of financial and technical capacity to develop the area.

Sec. 8 Disqualified Applicants. The following are

disqualified to participate:

8.1 Individuals, cooperatives and associations who have been

previously issued Tree Farm Lease Agreements (TFLAs),
Industrial Forest Management Agreements (IFMAs) or other
permits/licenses that were canceled due to their inability to
comply with the provisions of the contract including the failure
to develop open and denuded lands and other plantable areas
within the prescribed period;

8.2 Individuals, cooperatives and associations any of whose officers

have derogatory records such as but not limited to: (a)
violations of anti-dummy laws; (b) tax evasions; (c) illegal
logging/smuggling; (d) unauthorized transfer or subcontracting
of forest permits/licenses; and (e) members of cooperatives or
associations holding permits, licenses or contracts but not able
to comply with the terms and conditions thereof;

8.3 The Holder of any existing forest permit, license, lease or

management agreement; and

Sec. 9 Assignment of Management

Responsibility.

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 The DENR shall assign responsibility to manage forest lands
through the issuance of a SIFMA which shall have a duration of 25
years renewable for another 25 years.

The DENR shall award SIFMA areas on a first-come, first-

serve basis. It shall be issued in the name of the applicant, provided,
that in case of married individuals, it shall be issued in the names of both
spouses.

The SIFMA may be transferred, conveyed or sold, in whole or

in part, to any person, cooperative or association qualified to participate
under the program in accordance with Sections 7 and 8 hereof, subject
to the approval of the PENRO or the RED, as the case may be,
provided, that the ten (10) ha. limit for individuals and single family
units or the 500 ha. limit for cooperatives and associations is not
exceeded. The transferee shall assume the rights and obligations
stipulated under the original SIFMA and shall commit to the
continuance of the SIFMA into the remaining years of the Agreement.
The document of transfer, conveyance or sale shall be notarized and
copies forwarded to the FMB, RED, CENRO and concerned LGUs.

Likewise, in case of cancellation of the SIFMA, copies thereof

must be furnished the aforementioned offices.

Sec. 10 Application Requirements. Interested

individuals, cooperatives and associations may file their application for a
SIFMA with the concerned CENRO in the prescribed format shown in
Annex “A” of this Order, together with the following:

10.1 A filing fee in the amount of:

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 P 500.00 - for applications covering 1 to 5 ha.
P 1,000.00 - for applications for areas over 5 ha. to 10 ha.
P 5,000.00 - for applications for areas over 10 ha. to 100
ha.
P 7,500.00 - for applications for areas over 100 ha. to 300
ha.
P10,000.00 - for applications for areas over 300 ha. to 500
ha.

Filling fees may be adjusted upon review.

10.2 Sketch map of the area applied for

10.3 For individuals/family units

10.3.1 Community Tax Certificate

10.3.2 Certification from the Barangay Captain and

Municipality/City Mayor that the applicant is a resident
of the area where the site is located.

10.3.3 If a government employee, authorization from the head

of the department or agency where the applicant is
employed.

10.4 For cooperatives/associations

10.4.1 Certified true copy of the Certificate of Registration

with the Cooperative Development Authority (CDA) or
Securities and Exchange Commission (SEC)

10.4.2 List of duly elected officers and members and their

addresses, duly certified by the Board Secretary

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 10.4.3 Resolution/minutes of meeting, duly certified by the
Board Secretary, indicating the cooperative’s or
association’s interest in participating in the program.

Sec. 11 Processing of Applications.

11.1 In the CENRO --- The CENRO accepts and processes

SIFMA applications on a first-come, first-serve basis based on
the receipt of the applications at the CENR Office. Upon
receipt of the application, the CENRO shall verify whether the
area is available and whether it is within the approved areas for
SIFMA. Likewise, the CENRO shall evaluate the qualifications
of the applicant and the completeness of the documents
submitted. If all are found in order, the CENRO shall
determine on the ground the physical conditions of the area, the
presence of actual occupants, soil condition, vegetation,
topography and other ecological factors that will ensure success
of the plantation, and other pertinent information. The CENRO
shall then prepare the endorsement and forward all papers to
the PENRO with his comments and recommendations after the
evaluation of the application.

11.2 In the PENRO --- Upon receipt of all pertinent documents for
SIFMA applications with areas of 1 to 10 hectares, the
PENRO shall review and evaluate the documents and if he finds
all in order, shall prepare and approve the agreement in the
format shown as Annex “B” of this Order. For bigger areas,
the PENRO shall forward the SIFMA application to the RED
for consideration and approval. The SIFMA shall be approved
and issued, or a notice denying the application shall be issued,
within five (5) days from receipt of recommendation from the

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 CENRO. Copies thereof shall be furnished the FMB, RED,
CENRO and the concerned LGU.

11.3 In the Office of the RED --- The RED shall, within five (5)
days from receipt of the application and all pertinent documents,
review and evaluate the documents and if he finds all in order,
shall approve the agreement, otherwise, a notice denying the
application shall be issued. Copies thereof shall be furnished
the FMB, PENRO, CENRO, and the concerned LGU.

Sec. 12 Minimum Terms and Conditions of the

Agreement. The SIFMA shall contain the following minimum terms
and conditions.

12.1 A provision for SIFMA holders to furnish the necessary

management, technology and financial services necessary for the
development and management of the area;

12.2 A provision for consultation and arbitration with respect to the

interpretation of the SIFMA;

12.3 A provision prohibiting the conservation of the area into other

land uses not authorized under the SIFMA;

12.4 A provision for anti-pollution and environmental protection

measures;

12.5 A provision for the rehabilitation of the open and denuded areas
and the protection of existing natural forest vegetation;

12.6 A provision for an effective monitoring scheme to be

implemented by the Department which shall include, but will not
be limited to, the periodic assessment of the SIFMA holder’s

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 program in developing the area, provided, that the area
awarded shall be fully planted within three (3) years from the
date of the award;

12.7 A provision integrating gender concerns in the implementation of

the Agreement to include equitable participation of women n
project activities and enjoyment of the fruits thereof;

12.8 A provision for the protection of workers’ rights;

12.9 A commitment to community development;

12.10 A provision requiring the SIFMA holder to plant forest tree

species, which may include rubber and/or non-timber species
such as rattan, bamboo, etc., in not less than 90% of the
plantable area; provided, that the remaining plantable areas
shall be devoted for permanent agricultural purposes;

12.11 A provision for the SIFMA holder to keep areas with slopes 50
percent or over and strips of land at least 20 meters in width
bordering rivers and streams permanently under tree cover; and

12.12 A provision not to plan or introduce exotic species which are

untested in Philippine conditions, unless clearance is given by
DENR.

Sec. 12 Incentives to the SIFMA Holder. All

SIFMA holders shall be entitled to the following incentives:

13.1 All planted trees belong to the SIFMA holder who shall have
the right to harvest, sell and utilize such trees and crops, except
those retained for environmental protection purposes;

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13.2 Export of logs, lumber and other forest products harvested from
the SIFMA shall be allowed by the DENR in accordance with
the government allocation system;

13.3 All plantation products derived from the SIFMA area shall be
exempted from payment of forest charges;

13.4 Entitlement to appropriate and reasonable compensation for the

developments in the area, in case of cancellation of the SIFMA
without cause or for public interest;

13.5 Participants of this program who are actual occupants shall be

given priority in the event rules, regulations or laws in the future
shall allow a more permanent tenurial arrangement;

13.6 No restrictions on the use of the SIFMA and the improvements

in the SIFMA area as collateral for obtaining loans for the
improvement of the SIFMA area, provided, that there is prior
approval of the issuing authority of the SIFMA; and
13.7 Technical assistance should SIFMA holders wish to
confederate into a larger organization.

Sec. 14 Government Share. The government share

under the SIFMA shall be in the form of products/benefits derived
from the execution of the SIFMA, to wit:

14.1 Environmental enhancement through the protection and

rehabilitation of steep and/or eroded slopes, riverbanks and
streambanks and residual forests; conservation of natural
forests through the complementation of naturally growing timber
with plantation forest; accelerated revegetation and regeneration
of open areas and increased carbon sequestration capability of
trees;

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14.2 Trees planted for protection purposes which will not be
harvested but maintained by the SIFMA holder as
government’s share (e.g. in areas 50 percent in slope or over,
along riverbanks and streambanks, etc.);

14.3 Generation of employment;

14.4 Trails and access road development and improvement;

14.5 Increased production of fuelwood, food and other non-wood

products;

14.6 Ready and steady supply of raw materials for wood-dependent

industries;

14.7 Protection of soil, water, wildlife and existing natural forest

resources;

14.8 Income taxes paid by the SIFMA holder; and

14.9 Rentals for the use of the land which shall be free from the first
to the fifth year of the SIFMA, P 300.00 per hectare or fraction
thereof from the sixth to the tenth year, and P 500.00 per
hectare or fraction thereof for every year thereafter, subject to
future adjustments upon review.

Sec. 15 Integration of Socialized Industrial Forest

Management Agreement Holders into Larger Organizations.

SIFMA holders shall be encouraged to confederate into

cooperatives, associations and/or federations to enable them to avail of
the benefits of the economies of scale.

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 The DENR, in collaboration with other government agencies,
shall work for the necessary technical assistance, capacity building
through skills training, and organizational management, as well as
linkaging for access to markets and social services, livelihood and
financing.

The DENR shall explore ways and means to develop incentives

for Industrial Forest Management Agreement (IFMA) holders to
transfer control over the management of their awarded areas to their
employees and to actual forest occupants thereof.

Sec. 16 Grounds for Cancellation. The SIFMA may

be canceled or revoked on any of the following grounds:

16.1 Failure of the SIFMA holder to develop the area within three
(3) years;

16.2 The SIFMA holder has been found to a dummy;

16.3 The holder has transferred the rights over the area to another
person without the knowledge and concurrence of the DENR;

16.4 Conversion by the holder of the area or any part thereof to any
land use other than that of tree farming and the planting of
allowable crops;

16.5 The holder has allowed the entry of other persons into the area
for the purpose of building residential houses;

16.6 The holder cuts or allows cutting of naturally grown trees within
or adjacent to the SIFMA area;

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16.7 The holder refuses any duly authorized forest officer or duly
authorized governmental official entry into the SIFMA premises
or into any other improvement introduced and used for the
purpose of SIFMA execution;

16.8 The SIFMA was obtained through fraud or misrepresentation

or by false or misleading statements;

16.9 Conviction of the holder for the violation of pertinent provisions

of the Labor Code of the Philippines and other relevant labor
laws;

16.10 Violation by the holder of any of the terms and conditions of the
SIFMA or of any of the pertinent provisions of forestry laws,
rules and regulations;

16.11 Abandonment of the area;

16.12 Failure to pay rentals or other required fees;

16.13 Voluntary surrender of the SIFMA;

16.14 When public interest so requires.

Sec. 17 Monitoring and Evaluation.

17.1 Reporting System --- All SIFMAs issued by the PENROs and
REDs must be registered with the FMB within fifteen (15) days
from issuance. The Forest Management Bureau shall prepare a
simplified reporting format to be accomplished by the CENRO.
The PENRO shall analyze and consolidate the report and
submit the same to the FMB through the RED with comments

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 and recommendations on policy and program implementation.
The FMB shall prepare and submit regular consolidated reports
to the Secretary.

17.2 Site Monitoring and Evaluation --- A team composed of

representatives of the concerned LGU, an NGO, and the
CENRO, with the latter as team leader, shall regularly monitor
and evaluate the progress of the SIFMA within the CENRO
jurisdiction. The status indicator shall include, among others,
the following:

17.2.1 Seedling production by species;

17.2.2 Area and date planted by species;

17.2.3 Environmental protection and mitigating measures;

17.2.4 Progress maps showing the area planted by year,

including the species planted;

17.2.5 Pictures;

17.2.6 Issues and problems in the implementation and

recommendation to improve the project implementation.

Sec. 18 Program Management. The Program

shall be managed and implemented through the following DENR
Offices:

18.1 The FMB shall be the National Coordinating Office of the

Program and it shall have the following functions and
responsibilities:

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 18.1.1 To develop, formulate and recommend policies, rules
and regulations related to program development and
implementation;

18.1.2 To review and evaluate potential SIFMA sites and

submit a report thereon to the Secretary for approval;

18.1.3 To coordinate the implementation and execution of the

SIFMA;

18.1.4 To evaluate program implementation and update the

DENR Senior Management by providing periodic
reports on activities and accomplishments of the
program;

18.1.5 To establish institutional linkages with other government

and non-government agencies as appropriate at the
national level to improve program implementation; and

18.1.6 To keep complete and systematic files of, and updated

information on, all SIFMAs issued and other pertinent
documents related to the program.

18.2 The RED, assisted by the RTD, shall be responsible for the
effective implementation of the program in the region, and shall
approve SIFMA application, issued cancellation orders, and
approve transfers of the SIFMA for areas more than 10
hectares up to 500 hectares. The Forest Resources
Development Division shall act as the regional repository of all
data and information. The RED shall submit periodic reports to
the Secretary, through the FMB, on program implementation
including SIFMA monitoring and evaluation.

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18.3 The PENRO shall be responsible for the effective
implementation of the program in the province, and shall
approve SIFMA applications, issue cancellation orders, and
approve transfers of the SIFMA for areas up to 10 hectares.
Likewise, the PENRO shall evaluate periodic reports submitted
by the CENRO and forward the same, together with the
findings and recommendation, to the RED. The PENRO shall
maintain a data base for all SIFMAs within the province.

18.4 The CENRO shall be directly responsible for implementing the

Program within its jurisdiction, in coordination with other
concerned government and non-government units. The
CENRO shall be further responsible for site identification,
processing of SIFMA applications, and monitoring and
evaluation of the program implementation. The CENRO shall
submit periodic reports thereon to the PENRO for evaluation.

Sec. 19 Repealing Clause. This Order amends or

repeals the pertinent Sections of MAO No. 4, series of 1980, DAO
No. 60, series of 1993, and other previous orders or sections thereof
which are inconsistent herewith.

Sec. 20 Effectivity. This order shall take effect

immediately.

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 Signed on the occasion of the Centenary of the Cry of Pugad
Lawin, 23rd of August 1996.0.

VICTOR O. RAMOS
Secretary

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