31st May 2019

green

Green energy advocates and conservationists, rejoice! Republic Act No. 11285 (RA 11285), otherwise known as the Energy Efficiency and Conservation Act, is now binding law in the Philippines.

With RA 11285, energy conservation and efficiency are no longer terms within the realm of policy statements. Energy conservation and efficiency have become mandatory, under pain of legal sanction.

The law requires businesses to comply with regulations and guidelines imposed by the Department of Energy (DOE), which is the lead implementing agency.

The new law requires mandatory energy labeling for products, devices, vehicles, and equipment. As a matter of fact, the DOE is authorized, for purposes of testing and verification, to dismantle any equipment, device or product which it considers as energy consuming, and even require manufacturers and distributors to provide sample equipment for testing.

Vehicles also must comply with the fuel economy performance labelling requirements of the DOES.

Buildings, too, are subject of the law. The law now mandates all new buildings to be “green buildings”, in compliance with the minimum requirements specified in the Guidelines on Energy Conserving Design on Buildings issued by the DOE.

Businesses and establishments are subject of typing classification. Type 1 establishments (businesses that consume more than 500,000 kWh but less than 4,000,000 kWh per year), Type 2 establishments (businesses that consume more than 4,000,000 kWh per year), and Other establishments (businesses that consume more than 100,000 kWh but less than 500,000 kWh per year) are required to submit certain reportorial requirements, energy audits and ISO certifications, and hire technical complement to monitor and manage power consumption, many among others.

The DOE is now empowered with visitorial powers to ensure compliance with the law.

There are heavy sanctions for non-compliance. These involve administrative fines and penalties of up to One Million Pesos (P1,000,000.00), and criminal penalties up to five (5) years imprisonment, and a fine of up to One Hundred Million Pesos (P100,000,000.00). True, RA 11285 is one of only a handful of Philippine laws, wherein the judge is authorized by law to impose a gargantuan amount.

Among the acts penalized under the law are failure to submit reportorial requirements, failure to comply with energy labelling, selling, leasing or importation of energy hogging and non-compliant equipment, submission of false information, refusal to comply with any orders issued by the DOE, and violation of the implementing rules or guidelines issued under the law.

 Apart from the penalties, there are of course incentives for compliance. Green companies, buildings and businesses may be granted incentives under Omnibus Investments Code of 1987, which may include fiscal incentives, tax breaks and others, was determined by the Board of Investments. In addition to financial assistance that government financial institutions may provide, compliant businesses will also be recognized for innovations on energy efficiency and conservation, and may be provided technical assistance in furtherance of their green efforts.

An official copy of Republic Act No. 11285 (RA 11285), otherwise known as the Energy Efficiency and Conservation Act, can be accessed here.

 Nicolas & De Vega Law Offices is a full service law firm in the Philippines. You may visit us at the 16th Flr., Suite 1607 AIC Burgundy Empire Tower, ADB Ave., Ortigas Center, 1605 Pasig City, Metro Manila, Philippines. You may also call us at +632 4706126, +632 4706130, +632 4016392.

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