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[ MARINA CIRCULAR NO. 2018-02, April 11, 2018 ]

REVISED RULES AND REGULATIONS RELATING TO REGISTRATION AND LICENSING OF SHIPBUILDING AND SHIP REPAIR FACILITIES AND FOR OTHER PURPOSES

Adopted: 18 January 2018

Date Filed: 11 April 2018

Pursuant to Presidential Decree 474, Presidential Decree No. 1059, Executive Order 125/125-A, and Republic Act No. 9295 and its IRR as amended, the following rules and regulations are hereby adopted.

I. OBJECTIVE

To provide standards, requirements and guidelines for the registration and licensing of all entities engaged in shipbuilding and/or ship repair activities in the country.

II. COVERAGE

These rules and regulations cover all shipyards owned or operated by Filipino citizens and/or foreign nationals, corporations, partnership, cooperatives and entities engaged or intending to engage in shipbuilding and/or ship repair activities within the Philippines.

III. DEFINITION OF TERMS

Administration refers to the Maritime Industry Authority (MARINA).
Annual Endorsement refers to the endorsement of License after an annual inspection has been conducted for purposes of monitoring and enforcing of MARINA rules and regulations.
Builder s Certificate refers to a certificate issued by a MARINA-Registered Shipyard to ships that are constructed, converted, altered, modified or rebuilt upon satisfactory compliance with the design and construction requirements under relevant MARINA rules and regulations.
Certificate of Dry-docking refers to a certificate issued by a MARINA- Registered Shipyard to ships engaged in domestic or international trade, after satisfactory compliance with the mandatory dry-docking requirements under relevant MARINA rules and regulations.
Dry-Docking refers to the condition in which a ship is taken out of water for cleaning and repair of its hull and integral parts such as rudder, propeller, sea valves and sea chests, among others.
Equivalent Facilities refers to those identified in the list of facilities under section V that can facilitate the dry-docking and undocking of ships in Class C shipyard.
License refers to the certificate issued by the Administration which grants permission to a MARINA-Registered Shipyard to engage in shipbuilding and/or ship repair activity, upon compliance with the provisions of this Circular and its subsequent amendments.|
MARINA-Registered Shipyards refers to shipyards owned and operated by Filipino Citizen and/or Foreign National, corporation, partnerships, cooperatives and entities duly registered by the Administration under this Circular and its subsequent amendments.
Qualification Inspection refers to an inspection conducted by the Administration to verify & validate the compliance of the shipyard to all the requirements & conditions prescribed by this Circular prior to the registration, issuance of license and classification of shipyard.
Registration refers to the certificate issued by the Administration showing that the Shipyard has been officially registered in the MARINA Book of Shipyard Registry.
RENA refers to a Registered Naval Architect.
Ship or Vessel refers to any craft or artificial contrivance capable of floating on water, designed to be used or capable of being used as a means of water transportation utilizing its own motive power or that of others^[1] .
Shipyard refers to the shipbuilding or repair facilities which have the capability to lift vessels above waterline in order to effect ship work on vessels, appendages, structure, machinery and equipment^[1] .
Shipbuilding refers to the design, construction, launching and outfitting of all types of ship and watercraft^[1] .
Shipbuilding Permit refers to the permit issued by the Administration to the ship to be constructed, modified, altered, converted or rebuilt in accordance with the Administration's approved vessel plans.
Ship Repair refers to the overhaul, refurbishment, renovation, improvement, or alteration of the hull, machineries, equipment, outfits and components of all types of ship^[1] .
Shipbuilder and/or Ship Repairer refers to the citizen of the Philippines, or a commercial partnership owned by majority of Filipinos, or a corporation incorporated under the laws of the Philippines, the capital of which is owned or controlled in any proportion by Filipinos or foreign nationals, or by both such Filipinos or foreign nationals, or by corporations whether Filipino or foreign- owned, which is duly authorized by the Administration to engage in the business of shipbuilding and/or ship repair or to otherwise operate a shipyard, graving dock or marine repair yard.^[2]
Shipbuilding/Ship Repair Capability refers to the overall measure of a shipyard s machinery, equipment, manpower, technical know-how and financial capability to provide comprehensive shipbuilding and ship repair services.^[3]
Shipbuilding/ Ship Repair Capacity refers to the capacity of a shipyard for shipbuilding and/ or dry-docking operations based on the sufficiency and adequacy of its shipbuilding and/ or ship repair facilities and dry-docking facilities.

IV. GENERAL PROVISIONS REGISTRATION

All Entities engaged or intending to engage in shipbuilding and/or ship repair activities must be properly registered and issued a Certificate of Registration.
A Book of Shipyard Registry shall be maintained by the Administration and kept open to free inspection by the public during regular office, hours and subject to the provision of the Rules on Freedom of Information (FOI).
MARINA-Registered Shipyards shall be deleted from the Book of Shipyard Registry under any of the following circumstances:

(a) Non-operational for a period of five (5) years; and,

(b) Found out to have violated the government rules and regulations, after due process.
The name of entity for shipyard registration shall reflect the nature of operation of the business as shipbuilding and/or ship repair and as one of the primary purpose(s) stated in their: DTI Certificate of registration for Single Proprietorship; SEC Articles of incorporation for Partnership and Corporation; and, CDA Articles of Cooperation.
Qualification inspection is a pre-requisite for new shipyard owners and/or operators prior to registration, issuance of license and classification of shipyard.
The shipyard shall promote and observe gender equality and women empowerment principles in the workplace in support of the Gender and Development program of MARINA and as mandated by the Republic Act 9710 or the Magna Carta of Women Sec. 22. Right to Decent Work and its Implementing Rules and Regulations Sec. 25. Right to Decent Work.

LICENSING
Only MARINA-Registered Shipyards shall be issued a license to undertake shipbuilding and/ or ship repair activities within the limits provided by this circular accorded hereto.
The license is a pre-requisite to the availment of applicable incentives that may be administered by the Administration and other privileges as may be provided by the law.
Applicant for shipyard registration shall show proof of ownership or legal possession of the premises where the shipyard operation shall be undertaken. In cases of leased premises, the contract of lease should have a minimum validity of five (5) years reckoned from the date of the issuance of the Certificate of Registration.
Annual inspection is required for existing shipyards prior to endorsement or renewal of license. Shipyard inspection shall be governed by a manual of procedures by the Administration.
A MARINA-Registered Shipyard licensed under this Circular shall only undertake shipbuilding and/or ship repair activities within the authorized place of business operation. For licensed shipyard with two or more places of business operation, the rule of one license for one shipyard per location shall apply.
A MARINA-Registered Shipyard which intends to undertake ship breaking activities shall secure a separate license to engage in such activity.
The MARINA-Registered Shipyard should be an existing member of a MARINA-recognized shipyard association prior to the issuance of new MARINA license as a shipyard or renewal of expired license. If not yet a member, should submit proof that it has pending application for membership in a MARINA-recognized shipyard association.
All MARINA-Registered Shipyards licensed under this Circular shall be required to secure ISO 9001:2015 on Quality Management System and its latest amendments from a certification body accredited by the Philippine Accreditation Bureau (PAB).
All MARINA-Registered Shipyards licensed under this Circular shall likewise have a documented Health and Safety and Environmental Management Systems verified by the Administration based on standards to be developed by the Administration, concerned government agencies and its recognized industry partners/associations.

V. QUALIFICATION REQUIREMENTS

1. Classification and Capitalization for Shipyards. The applicant must comply with all the minimum requirements prescribed hereunder to be classified and registered accordingly.

Category	Classification	Facility		Capability	Pa i d-Up Capitalization/ Capitalization + Asset s
Sh i pbuil di ng and Ship Repair (SBSR)	CLASS A	Slipway or launch way and at l east 2 of t he f oll owi ng, one of which should be at least 130 m in length Shipyard area that can accommodate a Fabrication Area, Machine shop and Assembly Area	* Gravi ng Dock * Fl oati ng Dock * Syncrolift or Lift Dock * Building Yard	Capable to build and repair big ships with MINIMUM length overall of 130 meters	P50 , 000, 000
Ship building and Ship Repair (SBSR)	CLASS B	Slipway or launch way and at least 1 of the following, one of which should be at least 80 m in length Shipyard area that can accommodate a Fabrication Area, Machine shop and Assembly Area	* Graving Dock * Floating Dock * Syncrolift or Lift Dock * Building Yard	Capable to build and repair ships with MAXIMUM length overall of 129 meters	P25 , 000, 000
Sh i pbuil di ng and Ship Repair (SBSR )	CL A S S C	Slipway or launch way and equivalent f acility below 80 m in length Sh i pyard area t hat can acco mm oda te a Fabri cati on Area, M achi ne shop and Asse m bly Area	* Rollers * Inflatable Rubber4 * Ship lift * Electric/ Hydraulic Marine Winch for Ship Pulling * Marine Travel lift * Marine Railways or Prime movers * Building yard	Capable to build and repair ships with MAXIMUM length overall of 80 meters	P10 , 500, 000

2. Staffing Requirements for Shipbuilding and Ship Repair, Entities.

Management/Technical Skills Competence

For Shipyard Technical/ Operations Manager, the Shipyard must have sufficient formal related educational background/training in ship design, building, repair and shipyard management. For Skilled Workers, the Shipyard must have sufficient formal related shipyard trade or skills training (as certified by educational institutions, classification societies, TESDA, etc.), or proven experienced of at least 3 years in ship construction and repair.

Minimum Number of Workers

Technical	Class A	Class B	Class C
Reg i st ered Naval Architect 5	2	1	1
L i censed M arine Engi neer	1	-	-
L i censed M echani cal Engi neer	1	1*	1*
L i censed El ect ri cal Engi neer	1	1*	1*
Sa f ety Offi cer	2	1	1
Dra ft s m an	2	1*	1*

Sk ill ed W orkers
Superv i sor/ QC	3	2	1
W e l der/Cutter	10	6	2
P i pe Fitt er	5	3	1*
Sh ip Fitt er	5	3	1*
Carpen t er	3	1	1*
L i censed M ast er El ect ri ci an	3	2	1*
Heav y Equi p m ent Operator	2	1	1*
M echan ic	2	1	1*
Pa i nt er	3	2	1*
Sandb l ast er	3	2	1*
D i ver	3	2	1*
R i gger	3	2	1*
* M a y be on a per pro j ect-based or consult ancy basis only

3. Minimum Yard Machinerie and Equipment for Shipbuilding and Ship Repair Entities

Minimum Number of Yard Machineries and Equipment

Machinerie s & Equip m ent

C l ass A

C l ass B

C l ass C

Cran e (eff ecti ve lifti ng capacit y)

2 5 t ons

1 5 t ons

1 0 t ons

B l owers (St and t ype or port abl e)

Cha in Bl ocks

1 0 t ons

5 t ons

2 t ons

0 .5 t ons

La t he M achi ne*

Dr ill M achi ne*

M illi ng M achi ne*

Gr i ndi ng M achi ne*

Bend i ng M achi ne*

Hydrau lic Jack

5 0 t ons

1 0 t ons

Au t o m atic W el di ng M achi ne

E l ect ric W el di ng M achi ne

Au t o m atic Cutti ng M achi ne

Por t able Cutti ng Outfit

A ir Co m pressor

An ti -expl osi ve li ght or equi val ent (i. e., 9volts of 6 batt eri es)

Bor e Gauge

M ult i -gas Detector

Brea t hi ng Apparat us

S l udge Oil St orage Tank or equi val ent recepti on f acility

20 m 3

10 m 3

5 m 3*

*Proo f of rent al servi ce m ay be all o w ed

4. Existing licensed shipyards shall comply with the foregoing requirements upon renewal of their license.

VI. DOCUMENTARY REQUIREMENTS

REGISTRATION

a.   Letter of Application
b.   Cert of registration (e.g. SEC, DTI, CDA)
c.   Proof of Affiliation with a MARINA-recognized shipyard association or proof of application for affiliation

LICENSING ISSUANCE/UPGRADING

a.   Letter of Application
b.   Alien Employment Permit issued by DOLE or BID (for Foreign Nationals)
c.   Proof of employment and Bio-data of Technical and Skilled personnel
d.   Proof of ownership of shipyard or Lease Contract valid for at least Five (5)
years (in case the facility is leased/rented),
e.   Copy of Plans of the Shipbuilding and Ship repair Facilities including location map
f.   Proof of Trainings for management, technical and skilled personnel or
Certification from shipyard or any enterprises related his/her expertise
g.   Valid Mayor s Permit or PEZA Certification including Fire Safety Inspection
Certification from BFP or equivalent
h.   Valid Environmental Compliance Certificate Clearance (ECC) from DENR.
i.   Copy   of   Occupational Safety   and   Health   (OSH)   accreditation/DOLE Certification
j.   Duly accomplished Data Sheet prescribed by the Administration

RENEWAL

a.   Letter of application
b.   Alien Employment Permit issued by DOLE or BID (for Foreign Nationals)
c.   Proof of employment and Bio-data of Technical and Skilled personnel
d.   Proof of ownership of shipyard or Lease Contract valid for at least Five (5)
years (in case the facility is leased/rented)
e.   Copy of plans of SBSR Facilities, in case of expansion or modernization f.   Duly accomplished Data Sheet prescribed by the Administration
g.   Valid Mayor s Permit or PEZA Certification including Fire Safety Inspection
Certification from BFD
h.   Valid Environmental Compliance Certificate Clearance (ECC) from DENR.
i.   Copy   of   Occupational Safety   and   Health   (OSH)   accreditation/DOLE Certification
j.   Copy of valid ISO 9001:2015 QMS Certificate with proof of accreditation of the Certification Body from PAB
k.   Shipyard Annual Report(s) (SBSR Record book)
I.   Latest Audited Financial Statement stamped received by BIR
m. Duly accomplished Data Sheet prescribed by the Administration n.   Original License

ANNUAL ENDORSEMENT

a.   Letter of Application
b.   Original License
c. Duly accomplished Data Sheet prescribed by the Administration
d.   Latest Audited Financial Statement stamped received by BIR
e.   Shipyard Annual Report(s) (SBSR Record book)

VII. VALIDITY OF LICENSE

The license shall be valid for a period of five (5) years subject to annual endorsement unless revoked/cancelled. Attached sample certificate as Annex A.

VIII. CONDITIONS AND OBLIGATIONS ATTENDANT TO THE LICENSE ISSUED:

The license is non-transferable.
The original Registration and License Certificate shall be displayed in a conspicuous place in the main office and certified true copy of the certificate shall be posted at its place of business.
A licensed shipyard intending to withdraw or temporarily suspend its business operations is required to submit written notice to the Administration within thirty (30) calendar days prior to suspension of operation and the original license must be surrendered.

A license surrendered may be reissued within the 5 year validity period provided that inspection requirements are complied with. Otherwise, a new license shall be secured from the Administration.

In case of withdrawal, the licensed shipyard shall be required to surrender the original Certificate of Registration and shall automatically be dropped from the Shipyard Registry book.
The application for the renewal of license must be filed at least thirty (30) days before the expiry date. No license shall be renewed unless an inspection shall have been conducted.
License not renewed and for endorsed on time shall be assessed an additional fee/surcharge of fifty percent (50%) of the processing fee for each month of default or any fraction thereof, which shall be without prejudice to the imposition of administrative, fines and penalties for operating without valid MARINA license prescribed in Section X of this Circular.
A license valid for five (5) years shall be endorsed annually by the Administration. Non-endorsement of License shall be subject to penalties under Section X of this Circular.
Licensed shipyard or ship owner/operator shall secure a Shipbuilding Permit prior to construction, conversion, alteration, modification, rebuilding of ships. Licensed shipyard or ship owner/operator shall be required to submit and secure approval from the Administration of all plans for construction, conversion, alteration, modification, rebuilding of ships^[6] .
Only licensed shipyards shall issue Builder s Certificate of ships constructed, converted, altered, modified or rebuilt by them corresponding to their License including the inventory of hazardous materials used in the construction of ship.

Only RENA shall sign and seal all plans and specification for ship construction, conversion, alteration, modification or rebuilding. Electrical plan shall be signed and sealed by a Professional Electrical Engineer. Other specification such as the level of noise and vibration, heat and other ambient factors shall be reviewed and certified by a Licensed Safety Engineer.

For new construction and upon approval of ship s plan and specification, Hull Identification Number shall be assigned by the shipyard which shall be displayed near the ship being constructed.
Only licensed shipyard shall issue a Certificate of Dry-docking to ships dry- docked in their facility after completion of the required repairs/work orders.
A licensed shipyard shall inform/submit to the Administration the following:

10.1 New business address and telephone numbers within ten (10) days after the actual change;

10.2 Names of new Director or other principal officer within thirty (30) Calendar days after the appointment;

10.3 Certified true copy of Amended Articles of Incorporation/Partnership or By-laws duly approved by SEC, within thirty (30) calendar days after approval (if any);

10.4 Any change in the lease contract; and,

10.5 Hiring of service contractors.
The shipyard shall maintain a record book and electronic copy of records registered by the Administration indicating the activities (job orders, availment of incentives, etc.) of the yard and shall be made available for inspection anytime.
All licensed shipyards shall submit electronic copy of the following records within thirty (30) days after the end of each quarter:

12.1   Dry-docking Schedule booked for the next 3 months;

12.2   Available Capacity/Utilization;

12.3   Copies of Dry-docking reports issued for the previous quarter;

12.4 Copies of Certificates issued for Non-availability of Dry-docking space for the previous quarter;

12.5 For shipbuilders, annual reports of newly constructed ships, inclusive of details as to type, particulars, and ownership of such ships, within thirty (30) days of the succeeding year.
The required reports under item 11 of this Section shall serve as prerequisites for the renewal of the required license(s).

IX. FEES AND CHARGES

The following fees shall be charged for the issuance, upgrading, renewal and annual endorsement of SBSR license:

Registration

Category Processing Fee (PHP)

Class A 10, 000. 00

Class B 5, 000. 00

Class C 1, 000. 00

Licensing

Category	1st Violation per document (PHP)	2nd Violation per document (PHP)	3rd & Succeeding Violation per document
Class A	3,000.00	6,000.00	P12,000.00 and cancellation/ revocation of License for the operation of the shipyard
Class B	1,500.00	3,000.00	P6,000.00 and cancellation/ revocation of License for the operation of the shipyard
Class C	1,000.00	2,000.00	P4,000.00 and cancellation/ revocation of License for the operation of the shipyard

Category	1st Violation (PHP)	2nd Violation (PHP)	3rd & Succeeding Violation
Class A	100,000.00	Suspension of License Plus 100% of first violation fines	Closure after due process Plus 200% of first violation fines
Class B	75,000.00
Class C	50,000.00

Category	1st Violation (PHP)	2nd Violation (PHP)	3rd & Succeeding Violation
Class A	100,000.00	Suspension of License Plus 100% of first violation fines	Closure after due process Plus 200% of first violation fines
Class B	75,000.00
Class C	50,000.00

Category	1st Violation (PHP)	2nd Violation (PHP)	3rd & Succeeding Violation
Class A	100,000.00	Suspension of License Plus 100% of first violation fines	Closure after due process Plus 200% of first violation fines
Class B	75,000.00
Class C	50,000.00

Category	1st Violation (PHP)	2nd Violation (PHP)	3rd & Succeeding Violation
Class A	100,000.00	Suspension of License Plus 100% of first violation fines	Closure after due process Plus 200% of first violation fines
Class B	75,000.00
Class C	50,000.00

Category	Processing Fee (PHP)
Class A	10, 000. 00
Class B	5, 000. 00
Class C	1, 000. 00