Producer Responsibility Organization (PRO)

Sec. 44-H. Producer Responsibility Organization (PRO)

Obliged enterprises may voluntarily organize themselves to form or authorize a PRO.

• The PRO will establish a viable platform to implement their EPR program.

The Department, in consultation with the NSWMC and obliged enterprises or their PRO, shall estabish a system or parameters necessary to make the PRO sustainable and compliant.

These shall include standards, rules or guidelines for the following:

• Organizational structure and leadership
• Membership requirements
• Duties and responsibilities, to include
  • implementation parameters of the EPR program;
  • financing mechanisms
  • cooperation mechanism with other stakeholders, waste management entities, distributors, retailers, grocery and store owners, junkshop operators, and individuals or entities in the informal sector involved in waste management; and
  • implementation strategies;
  • Setting standards towards plastic neutrality
• Reporting, verification, and auditing of waste footprint generation, recovery, and diversion
• Data collection and database maintenance.

Sec. 45. Incentives

• Rewards and recognitions, monetary or otherwise, shall be provided to individuals, private organizations and entities, obliged enterprises, and PROs, including nongovernment organizations, that have undertaken outstanding and innovative projects, technologies, processes and techniques or activities in reuse, recycling, and reduction. Said rewards shall be sourced from the Fund herein created.
• This esablishes an incentive scheme to encourage LGUs, enterprises, or private entities, including obliged enterprises, PROs, and NGOs, to:
  • develop or undertake an effective solid waste management, including recovery and diversion of plastic product footprint, or
  • actively participate in any program geared towards the promotion thereof

Fiscal Incentives

• Tax incentives

Any provision of law to the contrary notwithstanding, obhged enterprises or PROs acting on their behalf, and other registered business enterprises may apply for incentives following the approval process provided under Title 13 (Tax Incentives) of the National Internal Revenue Code of 1997, as amended, for eligible activities: Provided, That such activities shall undergo the standard processes in the identification of qualified activities under the Strategic Investment Priority Plan (SIPP).

• The EPR expenses of obliged enterprises, PROs, and private enterprises shall be considered as necessary expenses deductible from gross income subject to the substantiation requirements for necessary business expenses deductible from gross annual income in accordance with Section 34(A)(1) of the National Internal Revenue Code of 1997, as amended.
• Tax and Duty Exemption of Donations, Legacies and Gift

Sec. 49. Fines and Penalties

• g. Any obliged enterprise that fails to register under Section 44-E or fails to comply with Section 44-F shall be imposed with the following fines:
  • 5-10m pesos for the first offense
  • 10-15m pesos for the second offense
  • 15-20m pesos for the third offense and automatic suspension of business permit until this act is complied with.

In case of failure to meet the targets set under Section 44-F, the obliged enterprise shall pay the same fines set above, or a fine twice the cost of recovery and diversion of the footprint or its shortfall, whichever is higher.

The penalty shall be imposed whether or not the noncompliance is the result of the failure to register under Section 44-E, falsification of documents, misdeclaration of generated or recovered footprint, employment of any scheme to maliciously evade the responsibility of an enterprise under the Extended Producer Responsibility Act of 2022, or tamper its compliance with the provisions of Section 44-F.

The Pollution Adjudication Board of the Department shall hear and adjudicate cases of violations or offenses under this section, and impose appropriate fines therefor.

Sec. 9. Mandatory Review

Within 5 years after the effectivity of this Act, or as the need arises, Congress shall review:

• the accomplishments, and impact of this Act
• the performance of its implementing agencies
• the compliance of obfiged enterprises

This is to determine the necessity of a remedial legislation mandating for:

• more stringent footprint recovery targets
• higher incentives, or
• phase-out of certain types of single-use plastic packaging.

Within 1 year after the effectivity of this Act, the NEC shall further identify, review, and update the list of non-environmentally acceptable products and plastic packaging material that shall be phased out, especially those that are:

• highly unnecessary or replaceable, or
• cannot be efficiently reused, recovered, or recycled

Sec. 10. Appropriations

The sum necessary for the effective implementation of this Act shall be charged against the appropriations for the DENR under the General Appropriations Act: Provided, That obfiged enterprises and the respective PROs shall be responsible for the funds necessary to operationalize and maintain the EPR programs, in compliance with this Act and its implementing rules and regulations.

Sec. 11. Implementing Rules and Regulations

The DENR, in consultation with relevant government agencies, representatives from obfiged enterprises, and other stakeholders shall formulate the rules and regulations necessary to implement the provisions of this Act within ninety (90) days from its effectivity.

Sec. 60. Joint Congressional Oversight Committee

This act creates a Joint Congressional Oversight Committee to:

• monitor the implementation of the Act
• oversee the functions of the implementing agencies.

The Committee has 5 Senators and 5 Representatives to be appointed by the Senate President and Speaker of the House of Representatives, respectively.

The Oversight Committee shall be co-chair ed by the Chairpersons of the Committee on Environment, Natural Resources and Climate Change of the Senate and the Committee on Ecology of the House of Representatives.