Department of Agrarian Reform

Pursuant to Section 65 and 49 of Republic Act (RA) No. 6657, the ''Comprehensive Agrarian Reform Law of 1988", Sections 4 (j) and 5 (l) of Executive Order (EO) No. 129-A, the "Reorganization Act of the Department of Agrarian Reform", and the pertinent provisions of RA 8435, the "Agriculture and Fisheries Modernization Act", and in compliance with the President's directive on December 28, 1998, the revised rules and regulations on the conversion of agricultural lands to non-agricultural uses are hereby promulgated as follows:

ARTICLE I

Preliminary Provisions

SECTION 1. Statement of Policies. — The conversion of agricultural lands to non-agricultural uses shall be governed by the following policies:

(a) The State shall preserve prime agricultural lands to ensure food security, including sufficiency in our staple food, namely rice and corn; Cdpr

(b) The State shall ensure that all sectors of the economy and all regions of the country are given optimum opportunity to develop through the rational and sustainable use of resources peculiar to each area in order to maximize agricultural productivity, promote efficiency and equity, and accelerate the modernization of the agriculture and fisheries sectors of the country; and

(c) Conversion of agricultural lands to non-agricultural uses shall be strictly regulated and may be allowed only when the conditions prescribed under RA 6657 and/or RA 8435 are present.

SECTION 2. Definition of Terms. — As used in this Order, the terms are defined as follows:

(a) Agricultural Lands refer to lands devoted to or suitable for the cultivation of the soil, planting of crops, growing of trees, raising of livestock, poultry, fish or aquaculture production, including the harvesting of such farm products, and other farm activities and practices performed in conjunction with such farming operations by persons whether natural or juridical, and not classified by law as mineral land, forest or timber, or national park, nor reclassified as residential, commercial, industrial or other non-agricultural uses before June 15, 1988.

(b) Areas Highly Restricted from Conversion refer to agricultural lands enumerated in Section 5 of these Rules whose conversion, if at all, shall be subject to certain additional requirements as prescribed therein and to the Secretary's approval regardless of the area.

(c) Areas Non-Negotiable for Conversion refer to agricultural lands not eligible for conversion as enumerated in Section 4 of these Rules.

(d) Comprehensive Land Use Plan refers to a document accompanied by maps and similar illustrations which represent the community-desired pattern of population distribution and a proposal for the future allocation of land to the various land-using activities. It identifies the allocation, character and extent of the area's land resources to be used for different purposes and includes the process and the criteria employed in the determination of the land use.

(e) Conversion Moratorium refers to the policy enunciated in RA 8435 which prohibits the conversion of irrigated lands, irrigable lands already covered by irrigation projects with firm funding commitments, and lands with existing or having the potential for growing high-value crops so delineated and included within the Strategic Agriculture and Fisheries Development Zones (SAFDZ) for the period starting 10 February 1998 to 9 February 2003.

(f) Environmentally Critical Areas (ECAs) refer to areas which are ecologically, socially, or geologically sensitive as declared by law such as:

(1) Areas declared by law as national parks, watershed reserves, wildlife preserves and sanctuaries;

(2) Areas set aside as potential tourist spots;

(3) Areas which are the habitats of endangered or threatened species of indigenous Philippine plants and animals;

(4) Areas of unique historic, archeological or scientific interest;

(5) Areas which are traditionally occupied by indigenous people or cultural communities;

(6) Areas frequently hit by natural calamities (geologic hazards, floods, typhoons and volcanic activities);

(7) Areas with critical slopes;

(8) Areas classified as prime agricultural lands;

(9) Recharged areas of aquifers;

(10) Water bodies which are used for domestic supply, or support fisheries and wildlife;

(11) Mangrove areas which have critical ecological functions or on which people depend for livelihood;

(12) Coral reefs;

(13) Mossy and virgin forests;

(14) River banks; and

(15) Swamp forests and marshlands.

(g) Illegal Conversion is the conversion by any landowner of his agricultural land into any non-agricultural use with intent to avoid the application of RA 6657 to his landholding and to dispossess his tenant farmers of the land tilled by them; or the change of the nature of lands outside urban centers and city limits either in whole or in part after the effectivity of RA 6657, as provided in Sec. 73 (c) and (e) respectively of the said Act. cdphil

(h) Irrigable Lands refer to lands which display marked characteristics justifying the operation of an irrigation system;

(i) Irrigated Lands refer to lands serviced by natural irrigation or irrigation facilities. These include lands where water is not readily available as existing irrigation facilities need rehabilitation or upgrading or where irrigation water is not available year-round;

(j) Land Use refers to the manner of utilization of land, including its allocation, development and management;

(k) Land Use Conversion refers to the act or process of changing the current use of a piece of agricultural land into some other use as approved by DAR

(l) Network of Protected Areas for Agricultural and Agro-industrial Development (NPAAAD) refers to agricultural areas identified by the Department of Agriculture through the Bureau of Soils and Water Management in coordination with the National Mapping and Resources Information Authority in order to ensure the efficient utilization of land for agriculture and agro-industrial development and promote sustainable growth. The NPAAAD covers all irrigated areas, all irrigable lands already covered by irrigation projects with firm funding commitments; all alluvial plains highly suitable for agriculture, whether irrigated or not; agro-industrial croplands or land presently planted for industrial crops that support the viability of existing agricultural infrastructure and agro-based enterprises; highland or areas located at an elevation of five hundred (500) meters or above and have the potential for growing semi-temperate and high-value crops; all agricultural lands that are ecologically fragile, the conversion of which will result in serious environmental degradation, and mangrove areas and fish sanctuaries; all fishery areas as defined pursuant to the Fisheries Code of 1998;

(m) National Integrated Protected Areas System (NIPAS) refers to the classification and administration of all designated protected areas to maintain essential ecological processes and life-support systems, to preserve genetic diversity, to ensure sustainable use of resources found therein, and to maintain their natural conditions to the greatest extent possible. NIPAS includes areas designated as initial components of the system under Sec. 5(a), RA 7586 and those proclaimed as part of the system in accordance with the procedure established under the said Act such as strict nature reserve, natural park, natural monument, wildlife sanctuary, protected landscapes and seascapes; resource reserve; natural biotic areas; and, other categories established by law, conventions or international agreements wherein the Philippine Government is a signatory;

(n) Premature Conversion of Agricultural Land refers to the undertaking of any development activity, the results of which modify or alter the physical characteristics of the agricultural lands to render them suitable for non-agricultural purposes without an approved order of conversion from the DAR;

(o) Prime Agricultural Lands refers to lands that can be used for various or specific agricultural activities and can provide optimum and sustainable yield with a minimum of inputs and development costs as determined by the Department of Agriculture (DA). LLpr

(p) Private Agricultural Lands refer to agricultural lands as defined herein and owned by natural or juridical persons or by the government in its proprietary capacity;

(q) Project Feasibility Study involves the investigation of the market, technical, financial, economic, and operational viability of the project. Specifically, it looks into alternative technical schemes to attain the project's objectives including possible size, location, production process, and physical and financial resource requirements. The study also determines whether the project would generate sufficient benefits to offset estimated investment and operating costs. Similarly, it ascertains which of the alternatives would yield the largest positive returns to the economy that would justify the allocation of resources. Finally, it seeks the most suitable legal, administrative and organizational arrangements to ensure that implementation would proceed as planned and that completed facilities would be properly maintained operated.

(r) Reclassification of Agricultural Lands refers to the act of specifying how agricultural lands shall be utilized for non-agricultural uses such as residential, industrial, commercial, as embodied in the land use plan, subject to the requirements and procedure for land use conversion. It also includes the reversion of non-agricultural lands to agricultural use;

(s) Strategic Agriculture and Fisheries Development Zones (SAFDZ) refer to areas within the NPAAAD identified for production, agro-processing and marketing activities to help develop and modernize, with the support of the government, the agriculture and fisheries sectors in an environmentally and socio-culturally sound manner;

(t) Socio-Economic Benefit Cost Study is an assessment of the project's net contribution to the national economic and social welfare which is done through a comparison of the economic and social benefits expected to be generated from the project with the social and economic costs of its implementation and operation.

(u) Socialized Housing refers to housing programs and projects covering houses and lots or homelots undertaken by the government or the private sector for the underprivileged and homeless citizens where the maximum cost per unit does not exceed the maximum amount as prescribed by the Housing and Urban Development Coordinating Council (HUDCC) which shall include sites and services development, long-term financing, liberalized terms on interest payments, and such other benefits in accordance with RA 7279;

(v) Special Economic Zone or ECOZONE refers to selected areas which are highly developed or which have the potential to be developed into agro-industrial, tourist, recreational, commercial, banking, investment and financial centers whose metes and bounds are delimited by Presidential Proclamation; LibLex

(w) Unauthorized Conversion is the act of changing the current use of the land from agricultural (e.g. riceland) to another agricultural use the effect of which is to exempt the land from CARP coverage (e.g. livestock) without an order of conversion from DAR, or changing the use of the land other than that allowed under the order of conversion issued by DAR;

(x) Watershed refers to a catchment area or drainage basin from which the waters of a stream or stream system are drawn;

(y) Zoning is the delineation/division of a city/municipality into functional zones where only specific land uses are allowed. It directs and regulates the use of all lands in the community in accordance with an approved or adopted land use plan for the city/municipality. It prescribed setback provisions, minimum lot sizes, building heights and bulk;

(z) Zoning Ordinance refers to a local legislation approving the comprehensive land use plan and providing for the regulations and other conditions, on the uses of land including the limitation on the infrastructures that may be placed thereon within the territorial jurisdiction of a city or municipality.

ARTICLE II

Coverage

SECTION 3. Applicability of Rules. — These Rules shall apply to the following agricultural lands:

(a) Those to be converted to residential, commercial, industrial, institutional and other non-agricultural purposes;

(b) Those to be devoted to another type of agricultural activity such as livestock, poultry, and fishpond the effect of which is to exempt the land from CARP coverage;

(d) Those reclassified to residential, commercial, industrial, or other non-agricultural uses on or after the effectivity of RA 6657 on June 15, 1988 pursuant to Section 20 of R.A. 7160 and other pertinent laws and regulations, and are to be converted to such uses. However, for those reclassified prior to June 15, 1998, the guidelines on securing exemption clearance shall apply. prLL

SECTION 4. Areas Non-Negotiable for Conversion. — The following areas shall not be subject to conversion:

(a) Agricultural lands within protected areas designated under the National Integrated Protected Areas System (NIPAS), including watershed and recharged areas of acquifers, as determined by the Department of Environment and Natural Resources (DENR);

(b) All irrigated lands, as delineated by the Department of Agriculture (DA) and/or the National Irrigation Administration (NIA), where water is available to support rice and other crop production, and all irrigated lands where water is not available for rice and other crop production but are within areas programmed for irrigation facility rehabilitation by the DA and/or the NIA; prcd

(c) All irrigable lands already covered by irrigation projects with firm funding commitments, as delineated by DA and/or NIA; and

(d) All agricultural lands with irrigation facilities operated by private organizations.

Applications for conversion involving areas non-negotiable for conversion shall not be given due course, regardless of whether all or some portions thereof are within areas highly restricted from conversion or within priority development areas for conversion.

SECTION 5. Areas Highly Restricted from Conversion. — The following areas shall be classified as highly restricted from conversion:

(a) Irrigable lands not covered by irrigation projects with firm funding commitment;

(b) Agro-industrial croplands, or lands presently planted to industrial crops that support the economic viability of existing agricultural infrastructure and agro-based enterprises;

(c) Highlands or areas located in elevations of 500 meters or above and have the potential for growing semi-temperate and usually high-value crops;

(d) Lands issued with notice of land valuation and acquisition, or subject of a perfected agreement between the landowner and the beneficiaries under the voluntary land transfer/direct payment scheme (VLT/DPS) under the Comprehensive Agrarian Reform Program (CARP); and

(e) Environmentally critical areas (ECAs) as determined by the DENR in accordance with law.

Applications for conversion involving areas highly restricted from conversion shall require apart from the standard requirements, a project feasibility study and environmental compliance certificate (ECC) if within ECAs; The application shall be deliberated upon by the PARC Land Use Technical Committee (PLUTC) and shall be approved by the Secretary regardless of the area.

SECTION 6. Priority Development Areas. — In accordance with EO 124, s. 1993 E.O. 184 s. 1994 and RA 7916, the following are considered priority development areas for land conversion:

(a) Specific sites in regional agri-industrial centers/regional industrial centers (RAICs/RICs) identified by the Department of Trade and Industry (DTI) and the DA;

(b) Tourism development areas (TDAs) identified by the Department of Tourism (DOT) as indicated in the current Medium Term Philippine Development Plan;

(c) Sites identified and proposed to be developed by local government units (LGUs) into socialized housing projects which are presently used for agricultural purposes;

(d) Sites intended for Socialized Housing Projects under EO 184 s. 1994;

(e) Agricultural areas intended for ECOZONE Projects pursuant to RA 7916.

In priority development areas, an ECC shall not be a pre-condition to the approval of the conversion application; instead, it shall form part of the conditions thereof where applicable. cdrep

SECTION 7. Lands within SAFDZs. — In accordance with Section 9 of RA 8435, the following rules shall govern conversion of lands within SAFDZs:

(a) All irrigated lands, irrigable lands already covered by irrigation projects with firm funding commitments, and lands with existing or having the potential for growing high-value crops included within the SAFDZs shall be subject to a conversion moratorium for a period of five (5) years from 10 February 1998 to 9 February 2003.

(b) During the effectivity of the moratorium, conversion may be allowed with respect to only 5% of said lands within SAFDZs upon compliance with existing laws, rules and regulations.

(c) The maximum of 5% equivalent to the total area of land eligible for conversion to non-agricultural use shall be jointly determined by the DA and the DAR, upon the recommendation of the Regional and National SAFDZ Committees pursuant to Rule 9.5.2 of DA Administrative Order No. 6, Series of 1998, or the implementing rules and regulations for RA 8435.

(d) After the expiration of the conversion moratorium, conversion may be allowed, if at all, on a case to case basis, subject to existing laws, rules and regulations on land use conversion.

ARTICLE III

Conversion Procedures

SECTION 8. Criteria for Conversion. — The following criteria shall guide the resolution of applications for conversion:

(a) Conversion may be allowed if the land subject of application is not among those considered non-negotiable for conversion as provided in Section 4 of these Rules;

(b) Conversion may be allowed, in accordance with Section 65 of RA 6657, when the land has ceased to be economically feasible and sound for agricultural purposes; or the locality has become urbanized and the land will have greater economic value for residential, commercial, industrial or other non-agricultural purposes;

(c) Conversion of lands within SAFDZs, as provided in Rule 9.5.2 of DA Administrative Order No. 6, Series of 1998, shall take into account the following factors:

(1) The conversion of land use is consistent with the natural expansion of the municipality or locality, as contained in the approved physical framework and land use plan;

(2) The area to be converted in use is not the only remaining food production area of the community;

(3) The land use conversion shall not hamper the availability of irrigation to nearby farmlands;

(4) The areas with low productivity will be accorded priority for use conversion; and

(5) Sufficient disturbance compensation shall be given to the farmers whose livelihoods are negatively affected by the land use conversion as provided for by existing laws and regulations. cdt

(d) Conversion may be allowed when the environmental impact assessment or initial environmental examination, as may be appropriate, shall have determined that it shall not adversely affect air and water quality and the ecological stability of the area.

SECTION 9. Who May Apply for Conversion. — The following persons may apply for conversion:

(a) Owners of private agricultural lands or other persons duly authorized by the landowner;

(b) Beneficiaries of the agrarian reform program after the lapse of five (5) years from award, reckoned from the date of the issuance of the Certificate of Land Ownership Award (CLOA), and who have fully paid their obligations and are qualified under these Rules, or persons duly authorized by them; or,

(c) Government agencies, including government-owned or controlled corporations, and local government units, which own agricultural land as their patrimonial property.

SECTION 10. Documentary Requirements. — The documents required of applicants for conversion are as follows:

(a) Standard Requirements

(1) Duly accomplished application for conversion subscribed and sworn to before a notary public;

(2) Special power of attorney if applicant is not the registered owner, or board resolution authorizing applicant if the owner is a corporation;

(3) True copy of OCT or TCT as certified by the Register of Deeds not later than thirty (30) days prior to filing. In case of untitled land, the following shall be required in lieu of title:

(i) Certification from the DENR Community Environment and Natural Resources Officer (CENRO) that the landholding has been classified as alienable and disposable; and aisadc

(ii) Certification from the DENR CENRO (for administrative confirmation of imperfect title) or the Clerk of Court (for judicial confirmation of imperfect title) that the titling process/proceedings has commenced and there are no adverse claimants.

(4) Recent 5R photographs of the property duly certified by the photographer/applicant; llcd

(5) Socio-economic benefit cost study inclusive of detailed site development plan and work and financial plan;

(6) Proof of financial and organizational capability to develop land to include: profile of developer, financial statement duly authenticated by a certified public accountant, and articles of incorporation or partnership if applicant/developer is a corporation or partnership: Provided, That if the land is to be used for socialized housing by the LGU under EO 124, s. 1993, a sanggunian resolution appropriating funds for the project and authorizing the LGU to undertake the same shall be required: Provided, further, That if the socialized housing shall be undertaken by other government agencies such as the National Housing Authority and the like, a board resolution approving the project and appropriating funds therefor shall likewise be submitted.

(7) List of tenants/farmworkers/bona fide occupants who will be affected by the land use conversion and proof of payment or agreement to pay disturbance compensation, duly attested to by the MARO. Bona fide occupants shall refer to those authorized by the landowner to stay in the property;

(8) Certification from the HLURB Regional Officer or the Deputized Zoning Administrator on the actual zoning or classification of the land based on the approved Comprehensive Land Use Plan citing the Municipal or City Zoning Ordinance and the date of its approval by the HLURB or the Sangguniang Panlalawigan, as the case may be;

(9) Certification from the authorized DA official stating, among others, the classification of the property under the NPAAAD; its convertibility status whether non-negotiable or highly restricted from conversion; and its irrigation coverage and suitability for agriculture;

(10) Certification from the DENR Regional Executive Director that the area subject of application for conversion is not within the NIPAS, not within environmentally critical areas, and will not involve the establishment of an environmentally critical project (ECP); and

(11) Official receipt showing proof of payment of filing fee.

(b) Special Requirements

If applicant is beneficiary of agrarian reform program:

(1) Certification from the Provincial Agrarian Reform Officer (PARO) that at least five (5) years have lapsed since the award of the land;

(2) Certification from the local office of Land Bank of the Philippines (LBP) that the beneficiary has fully paid his obligations with the LBP: Provided, That if the land involves landed-estate or those acquired under voluntary land transfer/direct payment scheme (VLT/DPS), the certification of the PARO that the same has been fully paid by the applicant shall be required in lieu of that of the LBP;

(3) Joint venture agreement or any other business arrangement on the use of the land between the EP/CLOA holders and the developer where the land was awarded under the agrarian reform program;

If application involves priority development areas:

(4) Endorsement from the concerned government agencies in case of priority development areas pursuant to Sec. 6 hereof: Provided, That an endorsement from the HLURB is needed if the project to be undertaken is for socialized housing: Provided, further, That a board resolution approving the project from Philippine Economic Zone Authority (PEZA) shall be required if the area is intended for ECOZONE projects. cdtai

If area is highly restricted from conversion:

(5) Project feasibility study.

If application involves ECAs or ECPs:

(6) Environmental Compliance Certificate.

SECTION 11. Filing of Application. — The procedures in applying for conversion are as follows:

(a) The applicant secures application form either from the DAR Regional Office or the DAR Central Office.

(b) The applicant accomplishes the application and secures/prepares the documents required under Section 10 hereof.

(c) The applicant files three (3) sets of the application under oath (inclusive of original) together with the required documents before the Regional Office or the Central Office.

(d) The receiving office shall review the completeness of the application. If found complete, the applicant shall be advised to pay the filing fee and post the cash bond prescribed herein. Applications with incomplete requirements shall not be accepted.

SECTION 12. Filing Fees. — The filing fees for application for conversion shall accrue to the Agrarian Reform Fund pursuant to Section 1 RA 8532. The rates are as follows:

Applied Area Fixed Fee Inspection Fee

Five (5) hectares or P1,000.00 P10,000.00

below

More than five (5) P2,000.00 P10,000.00

hectares

SECTION 13. Processing of Application. —

(a) Posting of Notice

(1) Upon receipt of the application, the Regional Office/Central Office shall immediately prepare the Notice of Application for Land Use Conversion on the same day the application is received and shall transmit the same to the DAR Municipal Office for posting.

(2) The MARO shall, within two (2) days from receipt of the Notice of Application, post the same in two (2) conspicuous places in the municipality, in the barangay(s) where the property is located, and in the property itself for a period of fifteen (15) days.

(3) The MARO shall issue a Certificate of Posting of Application within one (1) day from the lapse of the prescribed period for posting.

(b) Field Investigation

(1) Within two (2) days from receipt of the application, a briefer shall be prepared by the Regional Office/Central Office for the field investigation and ocular inspection.

(2) The field investigation and ocular inspection shall be conducted on the property on the eighth day from posting of the notice of application.

(3) The team designated to conduct the field investigation shall verify, among others, the following:

(i) Veracity of information contained in the application for land use conversion;

(ii) Coverage under CARP;

(iii) Whether or not the land falls within the appropriate zone in the land use plan of the city or municipality; cdasia

(iv) Existence of tenant/farmworkers/bona fide occupants;

(v) Whether or not the tenants/farmworkers /bona fide occupants have been paid or have agreed to the terms of the disturbance compensation; and

(iv) Other information relevant and useful in deciding whether to approve/disapprove the conversion.

(4) The investigation shall be completed within seven (7) days from start of the inspection and the report shall be submitted within three (3) days from completion thereof.

(1) On the twentieth day from posting of the notice and after completion of inspection, the Regional Office/Central Office shall deliberate on the merits of the application and recommend appropriate action thereon. The deliberating body at the Regional Office/Central Office may call the applicant and/or the oppositors, if any for clarificatory questioning in order to judiciously resolve the application for conversion.

(2) The recommendation on the application for conversion shall be forwarded to the Regional Director, the Undersecretary concerned, or the Secretary, as the case may be, within ten (10) days from the date of deliberation.

(3) Within ten (10) days from the submission of the recommendation, the approving authority shall resolve the application furnishing copies thereof to the applicant and the oppositors, if any.

(d) Reimbursement for Government Investment

Pursuant to DA Administrative Order No. 6, Series of 1998, in case of approved conversion of land within SAFDZs, the registered owner will pay the Government, through the Treasurer of the Philippines, the amount equivalent to the government's investment cost including inflation, estimated to include all expenditures for capital goods expended by any and all agencies. financed from public, national or local budget resources, whether sourced from domestic or foreign, on the land applied for land use conversion: Provided, That —

(1) The valuation of such investments will be equivalent to the total government expenditure made on the land in question, adjusted for average inflation over the period since the beginning of investment up to the month of approval of conversion;

(2) The valuation shall be determined jointly by the Municipal Assessor and Municipal Treasurer, in consultation with those agencies which have made public investments in the area, and reviewed by the Provincial Assessor; and

(3) The payment by the landowner shall be made in a single lump sum payment to the Treasurer of the Philippines, through the Municipal Treasurer of the Municipality where the farmland concerned is located.

SECTION 14. Processing of Applications Involving Priority Development Areas. — The following steps shall be observed in the processing of applications involving RAICs/RICs, socialized housing, tourism development, and PEZA-approved ECOZONES:

(a) The applicant submits the duly accomplished application form together with the supporting documents to the Regional Office/Central Office. Only applications with complete requirements shall be accepted and given due course.

(b) The Regional Office/Central Office shall immediately prepare the Notice of Application and transmit the same to the DAR Municipal Office for posting.

(c) The MARO posts the Notice of Application within three (3) days from receipt thereof in two (2) conspicuous places in the municipality, in the barangay(s) where the property is located, and in the property itself.

(d) An ocular inspection shall be conducted by a team assigned for the purpose within five (5) days from acceptance of the application. The inspection shall be completed within three (3) days.

(e) The team shall submit its report together with a draft order involving the application within three (3) days from inspection.

(f) The approving authority shall resolve the application within two (2) days from receipt of the draft order.

SECTION 15. Cash Bond and Performance Bond. — (a) To guarantee that the applicant shall not undertake premature conversion pending consideration of the application and ensure faithful compliance with the conditions of the conversion order by the applicant/developer, a cash bond and a performance bond shall be required pursuant to Section 35, Chapter 6, Book IV of the Administrative Code of 1987. llphil

(b) The cash bond shall be posted upon filing of the application equivalent to two point five percent (2.5%) of the total zonal value of the land. It shall be refundable upon issuance of the order of conversion or convertible into performance bond at the applicant's option. The cash bond shall be forfeited in favor of the government in the event actual conversion activities are conducted by the applicant prior to approval of the application. The forfeiture shall be without prejudice to the filing of criminal charges against those responsible for the premature conversion.

(c) On the other hand, the performance bond shall be posted within five (5) days from issuance of the order of conversion in the form of either of the following:

(i) Cash, manager's check, cashier's check, irrevocable letter of credit, bank draft equivalent to two point five percent (2.5%) of the total zonal value of the land; or

(ii) Bank guarantee equivalent to five percent (5%) of the total zonal value of the land; or

(iii) Surety equivalent to fifteen percent (15%) of the total zonal value of the land.

The performance bond shall be in favor of DAR to guarantee the payment of the amount of security as penalty in the event it is established that the applicant/developer is in default of their obligations under the order of conversion. It shall be co-terminous with the final completion of the project and shall be forfeited in favor of the government in case of violation of any of the conditions of the conversion order.

SECTION 16. Disturbance Compensation. — (a) Disturbance compensation, in cash or in kind or both, shall be paid by the landowner or the developer, as may be appropriate, to tenants, farmworkers, or bona fide occupants to be affected by the conversion in such amounts or under such terms as may be mutually agreed upon between them and the landowner or the developer, but which shall not be less than five (5) times the average of the gross harvests on their landholding during the last five (5) preceding calendar years, pursuant to Section 36 of RA 3844, as amended by Section 7 of RA 6389, particularly in the case of tenants.

(b) Compensation in kind may consist of free housing, homelots, employment, and other benefits. The DAR shall approve the terms of any agreement for the payment of disturbance compensation and monitor compliance therewith. In no case shall compliance with the terms and conditions thereof extend beyond sixty (60) days from the date of approval of the application for conversion.

(c) In the event the parties do not agree on the amount of disturbance compensation, the issue may be brought by either of them before the DAR Adjudication Board for resolution pursuant to existing rules.

SECTION 17. Role of PARC Land Use Technical Committee. — the PARC Land Use Technical Committee (PLUTC) shall assist in resolving applications for conversion particularly in cases where inter-agency inputs are crucial to the judicious disposition thereof. For this purpose, the Secretary or his duly authorized representative may endorse to the PLUTC for inspection and deliberation applications for conversion such as, but not limited to, those involving areas highly restricted from conversion.

ARTICLE IV

Protests and Oppositions

SECTION 18. Who May File. — Any person who will be displaced or directly affected by the proposed land use conversion such as occupants, tenants, farmworkers, identified beneficiaries, bona fide residents of adjoining properties or communities may file a written protest against the application for conversion within fifteen (15) days from the date of posting of the Notice of Application as prescribed under Section 11 hereof. Thereafter, the protestant/oppositor shall be furnished with copies of all orders or actions taken relative to the subject application: Provided, that in case the protestant or oppositor is an identified beneficiary under the agrarian reform program of the land applied for and who failed to file a written protest within the said period due to fraud, accident, mistake or excusable neglect, he shall have the right to intervene at any time during the pendency of the application.

SECTION 19. Where to File. — Protests/oppositions against the application for conversion may be filed with the Regional Office/Central Office, as appropriate.

SECTION 20. Grounds. — Protests/oppositions may be instituted on the following grounds:

(a) Proof that the area applied for is non-negotiable for conversion; dctai

(b) The adverse effects of the displacement to be caused by the proposed conversion far outweigh the social and economic benefits to the affected communities;

(d) Illegal premature conversion;

(e) Existence of proof that conversion was resorted to as a means to evade CARP coverage and to dispossess the tenant farmers of the land tilled by them.

SECTION 21. Resolution of Protest or Opposition. — Protests or oppositions against an application for conversion shall be resolved by the approving authority simultaneously with the application.

ARTICLE V

Approving Authorities

SECTION 22. Officials Authorized to Approve/Disapprove Conversions. —

(a) The following DAR officials shall approve or disapprove applications for land use conversion:

(1) The Regional Director for areas of not more than five (5) hectares.

(2) The duly authorized Undersecretary for areas above five (5) hectares but not more than fifty (50) hectares.

(3) The Secretary for areas of more than fifty (50) hectares, except for those highly restricted from conversion which shall be subject to his approval regardless of the area.

(b) To determine the appropriate approving official, the total area for conversion shall refer to the aggregate area of all applications regardless of the number of applications and the nature of the proposed projects where:

(1) The properties are owned by the same person or entity or the owners of which are represented by the same person or entity; and

(2) The properties are located in the same barangay or adjacent barangays within the same municipality/ies or city/ies.

(c) In case the subject of the application is adjacent to an area previously issued with conversion order, the foregoing test shall be applied for the purpose of determining the appropriate approving authority.

(d) Copies of the order approving or disapproving the application shall be furnished to the applicant, the protestant or oppositor if any, and the concerned DAR officials.

SECTION 23. Effects of Approval of Conversion. — The approval of an application for conversion shall have, but not limited to, the following effects:

(a) It shall be limited to the specific use of the land authorized in the conversion order;

(b) It shall be subject to the schedule indicated in the detailed site development plan and work and financial plan, but in no case shall the period of development extend beyond five (5) years from issuance of the conversion order except as authorized by the Secretary or the approving official on meritorious grounds;

(d) The applicant shall allow duly authorized representatives of DAR free and unhampered access to the property subject of the conversion order in order to monitor compliance with the terms and conditions thereof; LLjur

(e) The use authorized in the order of conversion shall be annotated on the title of the subject property; and

(f) It shall be without prejudice to ancestral domain claims of indigenous peoples, if any, pursuant to Republic Act No. 8371 or the "Indigenous Peoples Rights Act";

SECTION 24. Motion for Reconsideration. — (a) The applicant or the protestant may file a motion for reconsideration of an order of conversion or denial rendered by the Regional Director, the duly authorized Undersecretary, or the Secretary within fifteen (15) days from receipt of a copy thereof, with proof of service on the adverse party.

(b) No second motion for reconsideration of an order of conversion or denial by the same party shall be entertained.

(c) The pendency of motion for reconsideration filed on time and by the proper party shall stay the execution of the order sought to be reconsidered. If the motion for reconsideration is denied, the movant shall have the right to perfect his appeal during the remainder of the period for appeal, reckoned from receipt of the resolution of denial. If the order is reversed on reconsideration, the aggrieved party shall have fifteen (15) days from receipt of the resolution of reversal within which to perfect his appeal.

ARTICLE VI

Appeals

SECTION 25. Who May Appeal. — The applicant and/or the protestant may appeal from the decision of the Regional Director, the duly authorized Undersecretary, or the Secretary within the period prescribed hereof.

SECTION 26. When to Appeal. — Appeals may be taken within fifteen (15) days after notification to the party of the order of conversion or of the resolution on the protest. However, appeals to the Office of the President shall be taken within thirty (30) days from receipt by the aggrieved party of the decision/resolution/order complained of or appealed from pursuant to OP Administrative Order No. 18, Series of 1987.

SECTION 27. Where to File Appeal. — (a) Appeal from the decision of the Regional Director to the Secretary shall be made by filing a notice of appeal with the Regional Office concerned together with payment of P500.00 appeal fee to the Cashier of the said Regional Office.

(b) Appeal from the decision of the Undersecretary shall be made to the Secretary through the filing of a notice of appeal and payment of P500.00 appeal fee of the Cashier of the DAR Central Office.

(c) Appeal from the decision of the Secretary may be taken to the Office of the President (OP) pursuant to OP Administrative Order No. 18, Series of 1987 or to the Court of Appeals (CA) by certiorari in accordance with Sec. 54 of RA 6657.

SECTION 28. Appeal by Pauper Litigant. — A party protesting or opposing an application for conversion who is an agricultural lessee, share tenant, actual tiller, farmworker, member of farmers' organization, association or cooperative, affected by the proposed conversion, as alleged and applied for in a sworn complaint or motion, shall be entitled to the rights and privileges of a pauper litigant such as exemption from the payment of appeal fee, without need of further proof thereof.

SECTION 29. Appeal Memorandum. — An appeal memorandum shall be submitted by the appellant within fifteen (15) days from the perfection of the appeal.

SECTION 30. Perfection of Appeal. — (a) If the notice of appeal is filed and appeal fee is paid in due time, a party's appeal is deemed perfected as to him with respect to the subject matter thereof.

(b) The office that rendered the challenged order or decision shall lose jurisdiction over the case upon the filing of the notice of appeal and payment of the prescribed appeal fee in due time and the expiration of the period to appeal by the other party. cdlex

SECTION 31. Appeal to Office of the President or Court of Appeals. — (a) In all cases of appeal to the Office of the President, the Office of the Secretary shall represent the DAR and ensure that all necessary pleadings relative to the case are filed. It shall monitor the case until its termination.

(b) In cases of appeal to the Court of Appeals, the Office of the Solicitor General (OSG), or any DAR lawyer duly deputized by the OSG, shall represent the DAR.

SECTION 32. Effect of Appeal. — Appeal to the Secretary, Office of the President, or the Court of Appeals shall have the following effects:

(a) Appeal from the Regional Director or Undersecretary to the Secretary — The appeal shall stay the order appealed from unless the Secretary directs execution pending appeal, as it may deem just, considering the nature and circumstances of the case (E.O. 292 [1987], Book VII, Chapter 4, Sec. 21).

(b) Appeal to the Office of the President — Except as otherwise provided by special laws, the execution of the decision/resolution/order appealed from is stayed upon the filing of the appeal within the period prescribed. However, in all cases, at any time during the pendency of the appeal, the Office of the President may direct or stay the execution of the decision/resolution/order appealed from upon such terms and conditions as it may deem just and reasonable (OP Admin. Order No. 18, Series of 1987, Sec. 4).

(c) Appeal to the Court of Appeals — In accordance with the last paragraph of Sec. 50 of RA 6657, the decision of the DAR shall be immediately executory notwithstanding an appeal to the Court of Appeals.

SECTION 33. Finality of Conversion Order. — The order of conversion shall become final executory fifteen (15) days after receipt of a copy of the order by the applicant and the oppositor, if any, and no motion for reconsideration or appeal has been filed.

ARTICLE VII

Cancellation or Withdrawal of Conversion Orders

SECTION 34. Filing of Petition. — A petition for cancellation or withdrawal of the conversion order may be filed at the instance of DAR or any aggrieved party before the approving authority within ninety (90) days from discovery or facts which would warrant such cancellation but not more than one (1) year from issuance of the order: Provided, that where the ground refers to any of those enumerated in Sec. 35 (b), (e), and (f), the petition may be filed within ninety (90) days from discovery of such facts but not beyond the period for development stipulated in the order of conversion: Provided, further, that where the ground is lack of jurisdiction, the petition shall be filed with the Secretary and the period prescribed herein shall not apply.

SECTION 35. Grounds for Petition. — The following acts or omissions shall warrant cancellation of conversion order.

(a) Misrepresentation or concealment of facts or circumstances material to the grant of conversion;

(b) Non-compliance with the conditions of the conversion order;

(d) Non-compliance with the agreement on disturbance compensation;

(e) Conversion to a use other than that authorized in the conversion order; and/or

(f) Any other violation of relevant rules and regulations of DAR.

SECTION 36. Disposition of Petition. — The petition for cancellation or withdrawal of conversion shall be disposed of in accordance with the following procedures:

(a) Upon receipt of the petition, the applicant shall be directed to comment/oppose within fifteen 15 days from receipt of notice of the petition together with a copy thereof.

(b) The proceedings involving the petition shall be non-litigious in nature. Subject to the essential requirements of due process, the technicalities of law and procedure and the rules governing the admissibility and sufficiency of evidence obtaining in the courts of law shall not strictly apply.

(c) The concerned DAR official shall undertake reasonable means to ascertain the facts of the controversy, including a thorough examination of witnesses, as may be necessary, and ocular inspection of the premises in question.

(d) The concerned DAR official shall render a decision on the merits of the case within thirty (30) days from the time the case is deemed submitted for resolution or upon completion of the ocular inspection. cdll

SECTION 37. Effect of Cancellation/Withdrawal of Conversion Order. — In the event the conversion order is cancelled or withdrawn due to misrepresentation or concealment of facts, non-compliance with the conditions thereof, serious violation of DAR rules and regulations, and such other substantial grounds as the Secretary or the approving authority may deem appropriate, the land subject thereof shall revert to the status of agricultural lands and shall be subject to CARP coverage as circumstances may warrant.

ARTICLE VIII

Monitoring of Land Conversions

SECTION 38. Responsibility for Monitoring Illegal Conversions. — The Provincial/City Task Forces on Illegal Conversion, created pursuant to DAR-DOJ Joint Administrative Order No. 05, Series of 1994, shall monitor cases of illegal conversion of agricultural lands in the provinces or cities, as the case may be.

SECTION 39. Compliance Monitoring. — Compliance with the terms and conditions of the conversion order shall be monitored as follows:

(a) The landowner or developer shall submit quarterly reports on the status of development to the DAR Regional Office with jurisdiction over the subject property.

(b) The Regional Office shall monitor compliance by the applicant/developer with the terms and conditions of the conversion, including the posting of the approved order. It shall submit quarterly reports to the Central Office of the Status of all land use conversions, copy furnished the DAR Provincial and Municipal Offices concerned.

(c) The Central Office shall evaluate and consolidate the reports submitted by the Regional Office, and render quarterly reports on the status of all land use conversion applications to the Secretary, through the Undersecretary for Field Operations, copy furnished the National Task Force on Illegal Conversion.

(d) The Barangay Agrarian Reform Councils (BARC) and representatives of non-government organizations/people's organizations (NGOs/POs) may be authorized by the DAR Secretary or Regional Director to assist in monitoring compliance with the terms and conditions of the conversion order, as may be necessary.

ARTICLE IX

Investigation and Prosecution of Illegal, Premature, or Unauthorized Conversions

SECTION 40. Prohibited Acts and Omissions. — The following acts or omissions are prohibited:

(a) The conversion by any landowner of his agricultural land into any non-agricultural use with intent to avoid the application of CARP to his landholdings and to dispossess his tenant farmers of the land tilled by them, as provided for under Sec. 73 (c) of RA 6657;

(b) The change of the nature of lands outside urban centers and city limits either in whole or in part after the effectivity of RA 6657, as provided in Sec. 73(e) thereof;

(d) Unauthorized conversion as defined under Sec. 2 (y) of these Rules.

SECTION 41. Who May be Held Liable. — (a) Any landowner or developer who commits any act which constitutes illegal, premature or unauthorized conversion, including their accomplices and accessories, if any, shall be investigated pursuant to these Rules.

(b) If the offender is a corporation or association, the officer responsible therefor shall be held liable. cda

SECTION 42. Investigating Officials. — (a) The DAR officials, who are designated members of the Provincial/City Task Forces on Illegal Conversion pursuant to DAR-DOJ Joint Administrative Order No. 5, Series of 1994, shall be primarily responsible for the investigation, gathering of evidence and the filing of complaints against illegal, premature, or unauthorized conversions within their respective areas of jurisdiction.

(b) The Secretary may, however, direct such other officials as may be appropriate to investigate cases of illegal, premature, or unauthorized conversion. He may constitute a team composed of national and/or local DAR officials, representatives from other law enforcement agencies, and volunteers from non-government organizations and people's organizations (NGOs/POs) for this purpose.

(c) The Secretary or his duly authorized representative shall be furnished copies of the investigation reports and other relevant documents for appropriate action.

SECTION 43. Duties of Provincial/City Task Forces on Illegal Conversion. — In accordance with DAR-DOJ Joint Administrative Order No. 5, Series of 1994, the Provincial/City Task Forces on Illegal Conversion shall perform the following duties and responsibilities:

(a) DAR Members

(1) Conduct actual field investigation and case build-up;

(2) File the necessary complaint-affidavit together with supporting documents before the task force member prosecutor;

(3) Investigate all ongoing development project and conversion of agricultural land;

(4) Monitor the conversion situation in the province and cities within the province;

(5) Report to the National Task Force on the conversion situation in the province and cities within the province; and

(6) Perform such other related functions which may be assigned by the National Task Force on Illegal Conversion.

(b) DOJ Prosecutor Members

(1) Conduct inquest or preliminary investigation, as the case may be;

(2) Recommend and file criminal cases against the landowners and developers involved in illegal conversion of agricultural lands under RA 6657;

(3) Submit to the National Task Force monthly progress/status report of all cases involving illegal conversion of agricultural lands; and

(4) Perform such other related functions which may be assigned by the National Task Force in illegal Conversion.

SECTION 44. Evidentiary Requirements. — In illegal, premature, or unauthorized conversions, investigating officials shall secure the following evidence:

(a) Sworn statements of complainant and the witnesses;

(b) Sketch map;

(d) Certification from the concerned DAR office that no conversion application was filed or conversion order issued, or certified copy of order of denial of application or order revoking or cancelling conversion order, or certified copy of order showing the particular non-agricultural use authorized for conversion; LLpr

(e) Investigation report of concerned DAR officials; and

(f) Other evidence as appropriate.

SECTION 45. Administrative Action. — The following procedures shall be followed in the administrative investigation of illegal, premature, or unauthorized conversions:

(a) On the basis of the complaint or report received, the Secretary or his duly authorized representative shall conduct an investigation to determine if a prima facie case of illegal, premature, or unauthorized conversion exists.

(b) Upon determination of a prima facie case, the Secretary or the duly authorized DAR official shall issue a cease and desist order (CDO) directing the respondent to stop any and all development activities in the area and requiring him to explain within ten (10) days from receipt why he should not be penalized for violation of existing laws, rules and regulations on land use conversion.

(c) After the lapse of the period to answer, with or without the answer, administrative proceedings shall be conducted to determine if the respondent can be held liable for illegal, premature, or unauthorized conversion. The proceedings shall not be bound by the technical rules or procedure and evidence but shall proceed in a most expeditious manner, employing all reasonable means to ascertain the facts of every case in accordance with justice and equity and the merits of the case. The investigating official shall have the power to summon witnesses, administer oaths, take testimony, require submission of reports, compel the production of books and documents and answers to interrogatories an issue subpoena and subpoena duces tecum and to enforce its writs through sheriffs or other duly deputized officers. He shall likewise have the power to punish direct and indirect contempts in the same manner and subject to the same penalties as provided in the Rules of Court, in accordance with Sec. 50 of RA 6657.

(d) Upon determination that the respondent committed illegal, premature, or unauthorized conversion, the cash bond or performance bond, if any, shall be cancelled and forfeited in favor of the government, without prejudice to the imposition of other penalties or sanctions as may be warranted.

(e) Any government official who, directly or indirectly, assisted or took part in the commission of illegal, premature, or unauthorized conversion shall be administratively charged or dealt with in accordance with pertinent laws and regulations.

SECTION 46. Institution of Criminal Action. — (a) The DAR members of Provincial/City Task Forces on Illegal Conversion shall be primarily responsible for filing complaints of illegal or premature conversion pursuant to RA 6657 or RA 8435 before the Office of the Provincial or City Prosecutor. However, the Secretary or the National Task Force in Illegal Conversion may directly institute such criminal action in flashpoint cases or those which, in his judgment, would require immediate action to protect public interest.

(b) The DOJ prosecutor-members of the Provincial/City Task Forces on Illegal Conversion shall conduct inquest or preliminary investigation, as the case may be, and recommend the filing of criminal cases in court against the landowners, developers and all those responsible for illegal or premature conversion, as the evidence may warrant.

(c) However, unauthorized conversions as defined herein shall not warrant criminal prosecution but only administrative sanctions as may be appropriate.

SECTION 47. Prosecution of Illegal Conversion Cases. — The prosecution of illegal conversion cases shall be the primary responsibility of the designated provincial/city prosecutors, with active support from the concerned DAR officials.

SECTION 48. Role of National Task Force on Illegal Conversion. — Pursuant to DAR-DOJ Joint Administrative Order No. 4, Series of 1993, the National Task Force on Illegal Conversion shall perform the following duties and responsibilities:

(a) Identify and set priority areas or provinces where illegal conversion of agricultural lands are rampant;

(b) Report to the Secretaries of the DAR and DOJ on the conversion situation in the country;

(c) Recommend the issuance or amendment of guidelines and circulars on conversions and illegal conversion of agricultural lands; prLL

(d) Designate such persons who will coordinate and monitor the activities of the Provincial Task Forces on Illegal Conversion; and

(e) Perform such other related functions as may be assigned by the Secretary of Agrarian Reform and the Secretary of Justice.

ARTICLE X

Penalties and Sanctions

SECTION 49. Administrative Sanctions. — The DAR may impose any or all of the following sanctions after determining, in an appropriate administrative proceedings, that a violation of these Rules has been committed:

(1) Cancellation or withdrawal of the authorization for land use conversion;

(2) Blacklisting of the applicant, developer, or representative;

(3) Automatic disapproval of pending and subsequent conversion applications that the offender may file with the DAR;

(4) Issuance of cease and desist order (CDO) by the Secretary or the duly authorized DAR official upon verified reports that premature conversion/illegal conversion activities are being undertaken; or

(5) Forfeiture of cash bond or performance bond in accordance with Section 16 hereof.

SECTION 50. Criminal Penalties. — (a) Pursuant to Sections 73 (c)(e) an 74 of RA 6657, any person who knowingly or willfully converts agricultural land into any non-agricultural use with intent to avoid the application of said Act and to dispossess his tenant farmers of the land tilled by them; or who changes the nature of lands outside urban centers and city limits in whole or in part after the effectivity of RA 6657, shall be punished by imprisonment of not less than one (1) month to not more that three (3) years or a fine of not less than fifteen thousand (P15,000.00) pesos, or both, at the discretion of the court.

(b) Any person found guilty of premature or illegal conversion under RA 8435 shall be penalized, in accordance with Section 11 thereof, with imprisonment of two (2) to six (6) years, or a fine equivalent to one hundred percent (100%) of the government's investment cost, or both, at the discretion of the court, and an accessory penalty of forfeiture of the land and any improvement thereon.

ARTICLE XI

Transitory Provisions

SECTION 51. Lifting of Suspension. — Pursuant to the President's Memorandum dated December 28, 1998, the suspension of approval of applications for land use conversion is hereby lifted upon the effectivity of this Order. The suspension of acceptance of applications provided under DAR Memorandum Circular No. 1, Series of 1999 is likewise lifted, and new applications for conversion may, thereafter, be accepted by the concerned DAR Regional/Central Offices in accordance with these Rules.

SECTION 52. Effect on Pending Applications. — This Order shall apply to all applications filed upon its effectivity. All other applications filed previous thereof shall be governed by the pertinent administrative orders or issuances in force at the time of the filing of said applications, except as to the procedures herein which shall be made applicable to all pending applications.

SECTION 53. Applicable Rules Pending Delineation of SAFDZs. — Pending delineation and establishment of the SAFDZs, applications for conversion filed upon the effectivity of this Orders hall be governed by the rules provided herein and other pertinent guidelines on land use conversion.

ARTICLE XII

Final Provisions

SECTION 54. Repealing Clause. — This Order repeals DAR Memorandum Circular No. 23, Series of 1997, DAR Administrative Order No. 7, Series of 1997, and all other issuances inconsistent hereof.

SECTION 55. Separability Clause. — In the event that any of the provisions of this Order is declared unconstitutional, the validity of the other provisions shall not be affected by said declaration. Cdpr

SECTION 56. Effectivity. — This Order shall take effect ten (10) days after its publication in two (2) national newspaper of general circulation.

(SGD.) HORACIO R. MORALES JR.

Secretary

HELP CENTER

CONTACT INFORMATION

Department of Agrarian Reform
Elliptical Road, Diliman
Quezon City, Philippines

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HELP CENTER

CONTACT INFORMATION

Department of Agrarian Reform Elliptical Road, Diliman Quezon City, Philippines

Copyright Information

Department of Agrarian Reform
Elliptical Road, Diliman
Quezon City, Philippines