MEMORANDUM OF AGREEMENT

KNOW ALL MEN BY THESE PRESENTS:

This Memorandum of Agreement made and entered into in the Subic Bay Freport Zone, Philippine by and between:

The SUBIC BAY METROPOLITAN AUTHORITY, a government agency organize and established under Republic Act No. 7227, with office address at Building No. 229, Waterfront Road, Subic Bay Freeport Zone, Philippines, represented herein by its Chairman and Head and Agency, Commodore Feliciano G. Salonga PCGA and Administrator and Chief Executive Officer, Armand C. Arreza , hereinafter reffered to as the “SBMA”

-and-

The PHILIPPINE COAST GUARD, a government agency duly created and existing under the law and by virtue of Republic Act No. 5173 with office address at 139 25th street , Port area, Manila, Philippines represented by its commandant , Vice admiral Wilfredo D. Tamayo PCG, Hereinafter referred to as “PCG”

WITNESSETH:

WHEREAS, under Republic Act 7227, is vested with powers and function to undertake and regulate the establishment, operation and maintenance of utilities, other services and infrastructure in the Zone, including shipping and related businesses , stevedoring and port terminal services or concessions, incidental thereto;

WHEREAS, the SBMA is vested with the powers and functions to protect, preserve and maintain the land and water area of the Subic Bay Freeport Zone (SBFZ);

WHEREAS, the waters at SBFZ are continually being threatened by encroachment, illegal fishing activities (dynamite and cyanide), pilferage and illegal salvage operations. Moreover, acts of vandalism within the outlying areas of SBFZ and all other areas surrounding the SBFZ where marine resources abound but where SBFZ has either limited or no jurisdiction, threatens and affects as well as resources that abound in the waters;

WHEREAS, the zone has become abuzz with shipping and transshipment activity and interest in basing ships and other ocean going vessel which have also heightened over for the several years;

WHEREAS, under Proclamation No. 50 series of 1992, the President of the Republic of the Philippines declared the accelerated development of the zone as a national priority, and directed all government agencies to provide the necessary assistance and cooperation in the pursuit of such national priority;

WHEREAS, the PCG is mandated to promoted to promote safety to life and property at sea, safeguard the marine environment and resources, enforce all applicable maritime laws, and undertake other activities in support of the programs of the Department of Transportation Communications;

WHEREAS, the PCG also plays a vital role in the implementation of the International Ship and Port Facility Security (ISPS) Code of the International Maritime Organization (IMO), which formulates measures and procedures to prevent acts of terrorism that threaten the security of local ports and ships;

WHEREAS, the inter-agency cooperation, coordination and assistance between SBMA and PCG will enable both agencies to obtain their respective objectives and goals, as well as, ensure the prompt delivered of services to the investor;

NOW THEREFORE, for and in consideration of the foregoing premises, both agencies hereby as follows:

I. COVERAGE:

This Agreement shall apply to all persons, corporations, firms, and entities engaged in the conduct of shipping and other related business inside the Zone.

II. PURPOSE:

The purpose of this agreement is to establish a harmonious working relationship between SBMA and PCG with the end view of promoting and sustaining maritime activities within the Zone.

III. OBLIGATIONS:

On the part of SBMA:

A. adopt the PCG through Coast guard Station Subic to assist SBMA personnel in the enforcement of SBMA mandates, rules and regulations and allow PCG to continuously perform its mandate and deputized functions on the following, among others:

1) Vessel safety and maritime security inspection of all vessels plying within SBFZ waters.
2) Safeguard the marine environment including prevention and control of marine pollution including periodic water laboratory testing/sampling at SEEZ marine areas.
3) Maintenance and development of aids to navigation and its system.
4) Conducting of search and rescue/harbor patrol and oil spill response operations

B. Provided PCG Detachment, Subic, office space and billeting quarters at building 8107, Boton Wharf (SBF) free from rentals including electricity, water and public utility services. A housing unit shall be provided rent-free, however the PCG shall be responsible for the payment of electricity, water and other public utility services on such housing units.

C. shall provide adequate docking facilities including shore power connection to the PCG floating assets and fuel support to augment the fuel provider by the
PCG for the said floating assets that will assist the conduct of search and rescue/harbor patrol and oil response operation within and the contiguous areas of the Zone. Logistics support to the PCG units including floating assets during the actual conduct of search and rescue/harbor patrol and oil spill response operations and/or exercise shall be in accordance with the annexed Logistics Requirements.

D. Provide appropriate space for the PCG Training School, and open opportunities for its expansion for the future site of the PCG Academy, subject to the requirements of R.A 7227

E. Provide the SBMA Identification documents and allow the personnel of PCG station, Subic to enter and exit any gate at all times into and upon the premises where their office and place of work is located.

F. Provide emergency medical assistance to the personnel of PCG station, Subic on cases incurred while in the performance of their official duties within the Zone.

On the Part of PCG:

A. Upon coordination with SBMA, the PCG through Coast Guard Station Subic shall assist personnel of SBMA departments such as: Seaport, Law Enforcement, Ecology and Maritime Affairs Departments in the enforcement, of SBMA mandates, rules and regulations pertaining to the following:

1) Vessel safety and Maritime security inspections of all vessels plying in the SBFZ waters.
2) Safeguarding the marine environment including the prevention and control of marine pollution including periodic water laboratory testing/sampling at SBFZ marine areas.
3) Maintenance and development of aids to navigation and its system.
4) Conduct search and rescue/harbor patrol and oil spill response operation.

B. Deploy appropriate vessel(s) to assist SBMA in the conduct of search and rescue/harbor patrol, oil spill response and firefighting at-sea operation within and in contiguous areas of the Zone.

C. Endeavor to work closely with SBMA Seaport and Law Enforcement Departments in the establishment of a joint-case operation against all illegal activities at-sea within the Zone.

D. PCG will utilize the facilities specially provided by the SBMA strictly for office, training and billeting quarters of its personnel and same shall be maintained in clean and presentable condition at all times.

E. PCG shall provide appropriate space to accommodate SBMA liaison office at Headquarters, PCG, Manila and shall detail competent personnel to the SBMA to assist in the efficient implementation of this agreement.

F. Provide appropriate and relevant training assistance to SBMA personnel on the different maritime activities mentioned above.

IV. EFFECTIVITY/TERMINATION

A. This agreement shall be effective for a period of three (3) years from the date of signing and shall be renewable upon mutual consent of both parties.

B. In the event that any of the contracting parties decide to pre-terminate this agreement, one (1) month written notice of termination shall be mandatory. In case, both parties shall ensure that all SBMA and properties used during the existence of this Memorandum of Agreement shall be reverted back to its original owner.

C. The SBMA reserves the right to transfer/relocate the assigned properties to PCG in the pursuit of its goal and objectives and the PCG shall freely consent of such transfer/relocation to be the subject of another agreement on the matter, if needed.

IN WITNESS WHEREOF, the parties have hereunto set their hands and affix their signature this ________ day of ________________________ in the year of our Lord Two Thousand and eight at Subic Freeport Zone, Philippines.

SUBIC BAY MEETROPOLITANT AUTHORITY                             PHILIPPINE COAST GUARD
By:                                                                                                     By:

FELICIANO G. SALONGA                                                               WILFREDO D. TAMAYO
Commodore PCGA                                                                             Vice Admiral PCG
Chairman and Head of Agency                                                         Commandant, PCG

ARMAND C. ARREZA
Administrator and CEO