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The implementation and approval
reclamation projects in the Philippines,
whether foreshore or inland is limited
and controlled solely by the National
Government. However, by virtue of
Presidential Decree No. 3-A, the National
Government is authorized to delegate this
function to any government agency. At
present, there are two (2) government
agencies that play key roles in the
implementation of these projects.
The Public Estates Authority (“PEA”),
now the Philippine Reclamation
Authority (“PRA”), was crated by virtue
of Presidential Decree 1084. It serves
principally as the clearing-house of all
reclamation projects in the country. Prior
to the enactment of Executive Order No.
543 dated June 24, 2006, it originally
functioned as a recommendatory or
advisory arm of the President of the
Philippines with respect to the approval of
proposed reclamation projects. However,
by virtue of the said Executive Order,
PRA now has the power and authority of
approving or disapproving all applications
for reclamation projects in the Philippines.
The Administrative Code of 1987
also empowers the Department of
Environment and Natural Resources
(“DENR”) to exercise exclusive jurisdiction
on the management and disposition of
all lands of the public domain. This also
includes the supervision and control of the
exploration, development and utilization
of the country’s natural resources.
Initially, there has not been any
overlapping of powers between these
two agencies until after the DENR, on
July 31, 2007, issued DENR Administrative
Order (“AO”) No. 2007-20. Pursuant to
the said AO, applicants are required to
secure permits to reclaim from the DENR.
These permits are valid only for a period
of one (1) year. This requirement caused
confusion among the applicants as it
conveys the impression that the DENR
is the regulatory and approving agency
tasked for these projects.
In order to streamline inter-agency
roles and duties and to eliminate any
confusion, the President issued Executive
Order (“EO”) 672, which took effect
immediately after its publication on
October 19, 2007. The EO reiterates PRA’s
exclusive responsibility of approving all
reclamation projects and also directs
the PRA to coordinate and secure from
the DENR a Permit or Site Clearance
prior to the approval of any reclamation
project. In addition to a Site Clearance,
an Environmental Compliance Certificate
(“ECC”) must be secured from the DENR.
Upon the project’s completion, the
EO directs the PRA and the DENR to
undertake a survey of the completed
reclaimed land in accordance with the
DENR rules and regulations. To which, the
President may then issue a Proclamation
declaring some portions of the reclaimed
land to be alienable while leaving certain
portions for public use or service. The
said Proclamation is issued only upon the
recommendation and endorsement of the
DENR after prior clearance of the PRA.
After the issuance of the Presidential
Proclamation, the DENR and the Land
Registration Authority (“LRA”) are
mandated to issue a Special Patent and
Original Certificate of Titles. The titles to
the reclaimed lands that are declared to
be devoted for public use or service are
to be named in the name of the Republic
of the Philippines while those that are
proclaimed alienable and disposable are
issued in the name of PRA. Thereafter,
PRA is authorized to alienate or transfer
these lands to qualified persons or
entities in accordance with the limitations
provided in the 1987
Philippine Constitution.
Written by:
Leighna Katrina S.
Sitoy
Leighna Katrina S. Sitoy
Associate
Sycip Salazar Hernandez & Gatmaitan
+632 817-98-11 loc. 326
Leighna Katrina S.
Sitoy
Malaysia
FIC Moving Forward
The Malaysian Foreign Investment
Committee (FIC) is a committee and
not a statutory body. The guidelines
issued by FIC are not issued pursuant to
any power granted by legislations. The
guidelines are essentially administrative
guidelines and do not have the
force of law. Notwithstanding, may
foreign investors choose to comply as
non-compliance may have practical
consequences particularly in respect of
any governmental licence, permit or
approval for employment of expatriate
personnel where most governmental
departments in Malaysia choose to
conform to the views of the FIC.
Recently, FIC on 1 January 2008 issued
fresh guidelines in relation to:
a) acquisition of interests, mergers
and take-overs by local and foreign
interest; and
b) acquisition of properties by local and
foreign interest.
It is noticeable that the guidelines
were amended to reflect greater
administrative control over foreign
investments whether via purchase of
properties or of shares of a company. It
additionally set outs new transactions
where FIC’s approval is now required.
Particularly, with regard to the
acquisition of properties, amongst the
transactions which will now be subjected
to the guidelines are:
(i) acquisition of a commercial property
valued of less than RM10,000,000;
(ii) acquisition of an entire building or an
entire property development valued
at RM10,000,000;
(iii)acquisition of land or land with
building for redevelopment purpose;
(iv)charging of property in Malaysia
to foreign banks and financial
institutions;
(v) acquisition of property by Real Estate
Investment Trust (REIT) management
company through private REIT fund;
and
(vi)those transactions which requires
approval from any governmental
ministries, agencies or statutory or
regulatory bodies even if the approval
of FIC is not required.
The FIC has also tighten the time line
which a company has to comply with
the equity conditions if any is set in its
approval letter from 12 months to 6
months.
Notwithstanding, there are few new
exemptions which may spur growth in
various areas. Those exemptions relate to
any acquisition of properties or shares in
a company:
i) operating in the approved area in
the Iskandar Regional Development
and have been granted the status by
the Iskandar Regional Development
Authority;
ii) which have obtained the
endorsement from the Secretariat of
the Malaysian International Financial
Centre; and
23
asian legal business ISSUE 8.4
iii) that have been granted status of
International Procurement Centre,
Operational Head Quarters,
Representative Office, Regional
Office and such other special
endorsements by the Ministry of
Finance, Ministry of International
Trade and Industry;
Overall, the responses to the
amendments had been encouraging,
particularly from investors in the Iskandar
Regional Development.
Written by:
Geraldine Chan
Tay & Partners
6th Floor, Plaza See Hoy Chan,
Jalan Raja Chulan
50200 Kuala Lumpur, Malaysia
Phone: +603-2050 1888
Fax: +603-2031 8618
E-mail: geraldine.chan@taypartners.
com.my .
Website: www.taypartners.com.my
Geraldine Chan
Singapore
SGX and “Watch-List”
On 6th December 2007, the SGX has
amended its Listing Manual and
introduced a “Watch-list” for companies
listed on the Mainboard (“Mainboard
companies”). This is part of the SGX’s
ongoing efforts to promote investor
confidence, and improve the overall
quality of listed companies in Singapore.
It should be noted that the Watchlist rules do not apply to real-estate
investment trusts, business trusts,
investment funds, global depository
receipts (GDRs) and secondary-listed
companies listed on the Mainboard.
The Watch-List rules came into effect
on 1 March 2008. Quarterly reviews
will be carried out on the Mainboard
companies and the Watch-List will be
revised accordingly, where necessary.
Under the new Part V of Chapter
13 of the Listing Manual, Mainboard
companies will be placed on the “WatchList” if they register:1. pre-tax losses for the three most
24
recently completed consecutive
financial years (based on the latest
announced full year consolidated
accounts, excluding exceptional
or non-recurrent income and
extraordinary items); and
2. an average daily market capitalisation
of less than S$40 million over the last
120 market days on which trading
was not halted or suspended for the
full day.
Trading in the Watch-List companies
will continue as usual, unless a trading
halt or a suspension is effected.
The Watch-List companies may apply
for removal from the Watch-List upon
meeting either one of the following
requirements:(a) it records consolidated pre-tax profit
for the latest completed financial
year and has an average daily market
capitalisation of $40 million or more
over the last 120 market days of fullday trading; or
(b) it satisfies the Mainboard admission
criteria contained in Rule 210(2) (a) or
(b) of the Listing Manual.
On 4th March 2008, the SGX took steps
to place nine Mainboard companies
under its first watch list. These companies
were required to make an immediate
announcement of the Watch-List status,
and to provide the market with quarterly
updates on their financial situation,
including their future directions and
any other material developments that
may have a significant impact on their
financial position.
Unless a Watch-List company satisfies
the criteria for removal from the “WatchList” within 24 months from the date on
which it acquires the Watch-List status,
the SGX may either delist it or suspend its
trading with a view to delisting.
Written by:
Ms Eng Hui Ting &
Ms Chen Shu
Corporate Finance Executive
Ph: (65) 6322-2237
Fax: (65) 6534-0833
E-mail: enghuiting@loopartners.com.sg
Ms Chen Shu
Legal Executive, Corporate Practice
Ph: (65) 6322-2230
Fax: (65) 6534-0833
E-mail: chenshu@loopartners.com.sg
Loo & Partners, 88 Amoy Street, Level Three, Singapore 069907.
InDOnesia
Re-Registration for the
Existing Franchise in
Indonesia is Approaching
the Deadline
(a view to government regulation
no. 42 of 2007 on Franchise)
Rapid development in Indonesia’s
franchise industry in the recent years
has motivated government to revise
the former franchise regulation no.
16 of 1997. The mushrooming of local
franchises by the end of 2005 that
reached 129 brands, compared to
237 foreign franchises and became
outnumber in 2 years when local
beats foreign by 450 to 250 has made
government to straighten up this
business practice to be more put in
order.1
The purpose of this new regulation
is for the establishment of franchise
business activities in Indonesia and to
encourage local businessman particularly
for SME to make them to be a highquality local franchisor with competitive
capability, nationally or internationally,
particularly for domestic products.
Therefore, Government needs to know
the legality and bona fide business of the
franchisors (local or abroad) in order to
build business information transparency
which can be used optimally in national
business to marketing the good and/
or services by using franchise system.
By filing registration, Government will
be able to control and to organize
the franchise transactions in order to
produce a secure legal environment for
any parties involved in this business.
In regard to re-registration for the
existing franchise, the transitional
provision of Government Regulation
No. 42 of 2007 clearly states that any
franchises agreement made prior to
the issuance of this regulation shall be
registered at the latest on 23 July 2008
or one year after the enactment date of
this government regulation on 23 July
2007. As referred to Art. 11, it means