Adopting the Rules on Accreditation of External Auditors and Auditing Firms

June 4, 2012

ERC RESOLUTION NO. 06-12

A RESOLUTION ADOPTING THE RULES ON ACCREDITATION OF EXTERNAL AUDITORS AND AUDITING FIRMS FOR THE PURPOSE OF CONDUCTING VERIFICATION ON THE DOCUMENTS OF DISTRIBUTION UTILITIES RELATIVE TO THE COMPLIANCE CASES FILED BEFORE THE COMMISSION

WHEREAS, paragraphs (s) and (t) of Section 43 of Republic Act No. 9136 (R.A. 9136) mandate the Energy Regulatory Commission (ERC) to promulgate rules and regulations and perform such other regulatory functions as are appropriate and necessary in order to ensure the successful restructuring and modernization of the electric power industry;

WHEREAS, pursuant to its mandate, the ERC, in separate issuances, adopted several automatic cost adjustment mechanisms which govern the periodic determination of the various pass-through rates of Distribution Utilities;

WHEREAS, to establish a systematized confirmation process of the pass through rates, the ERC deemed it appropriate to consolidate, update and rationalize the requirements under all the separate issuances by issuing Resolution No. 16, Series of 2009, adopting and promulgating the "Rules Governing the Automatic Cost Adjustment and True-up Mechanisms and Corresponding Confirmation Process for Distribution Utilities" ("Consolidated Rules", for brevity);

WHEREAS, Article 5, Section 5 of the Consolidated Rules allows the ERC to refer to accredited external auditors the verification process of documents of the Distribution Utilities relative to their applications for the confirmation of over or under recoveries pursuant to Resolution No. 16, Series of 2009; HSEcTC

WHEREAS, pursuant to the said accreditation requirement under Article 5, Section 5 of the Consolidated Rules, the ERC deems it necessary to establish rules and procedures that would govern the conduct of said verification by external auditors and auditing firms;

WHEREAS, on March 20, 2012, the ERC conducted a public consultation on the proposed Rules on Accreditation of External Auditors.

NOW THEREFORE, the ERC, after considering the various views and comments submitted by all interested parties, hereby RESOLVES, as it is hereby RESOLVED, to APPROVE and ADOPT the "Rules on Accreditation of External Auditors and Auditing Firms for the Purpose of Conducting Verification on the Documents of Distribution Utilities Relative to the Compliance Cases Filed Before the Commission", hereto attached as Annex "A" and made an integral part of this Resolution.

This Resolution shall take effect fifteen (15) days following its publication in a newspaper of general circulation in the country. AHCTEa

Let copies of this Resolution be posted on the ERC website and filed with the University of the Philippines Law Center Office of the National Administrative Register (UPLC-ONAR).

Pasig City, June 4, 2012.

 

(SGD.) ZENAIDA G. CRUZ-DUCUTChairperson

 

(SGD.) MARIA TERESA A.R. CASTAÑEDACommissioner

 

(SGD.) JOSE C. REYESCommissioner

 

(SGD.) ALFREDO J. NONCommissioner

 

(SGD.) GLORIA VICTORIA C. YAP-TARUCCommissioner

ANNEX A

RULES ON ACCREDITATION OF EXTERNAL AUDITORS AND AUDITING FIRMS FOR THE PURPOSE OF CONDUCTING VERIFICATION OF THE DOCUMENTS SUBMITTED BY DISTRIBUTION UTILITIES RELATIVE TO THEIR COMPLIANCE FILING APPLICATIONS WITH THE ENERGY REGULATORY COMMISSION

Pursuant to Section 43 (s) and (t) of Republic Act No. 9136 or the Act, Rule 7 of its Implementing Rules and Regulations (IRR) and Article 5, Section 5 of the "Rules Governing the Automatic Cost Adjustment Mechanisms and True-Up Mechanisms and Corresponding Confirmation Process for Distribution Utilities", the Energy Regulatory Commission (ERC) hereby adopts and promulgates these Rules to establish a procedure for the conduct of verification process by external auditors and auditing firms that would govern in the ERC's confirmation process for the automatic cost adjustments and true-up mechanisms.

ARTICLE I

General Provisions

Section 1. Objectives. —

These Rules shall have the following objectives:

1.1 To put in place a fair and transparent process for the accreditation of external auditors and auditing firms that may be engaged by the DUs to audit their automatic cost adjustments and true-up charges subject of the ERC's confirmation process. EHTCAa

1.2 To ensure that the accredited external auditors and auditing firms possess the required professional qualifications necessary to undertake the audit of the DUs' automatic cost adjustments and true-up charges.

1.3 To define the scope/extent of authority of the accredited external auditors and auditing firms, the conditions for their engagement by the DUs and other responsibilities imposed on them.

Section 2. Definition of Terms. —

In these Rules, the following terms or expressions shall have the corresponding meaning assigned to them:

2.1 Accounting/Auditing Firm — shall refer to the firm owned or operated by a sole proprietor Certified Public Accountant (CPA) or a professional partnership of Certified Public Accountants providing accounting and/or auditing services. This shall likewise include an entity that controls such parties through ownership, management or other means and an entity controlled by such parties through ownership, management or other means.

2.2 Certified Public Accountants (CPAs) — shall refer to those persons who hold valid certificates issued by the Board of Accountancy (BOA) and are licensed to practice the profession of public accountancy in the Philippines.

2.3 Code of Ethics for Professional Accountants in the Philippines — shall refer to the set of rules, guidelines and procedures that govern the behavior of every professional accountants in the Philippines for the practice of the accountancy profession promulgated by the Board of Accountancy (BOA) and approved by the Professional Regulation Commission (PRC) in 1978, as amended effective June 30, 2008. Reference to the Code of Ethics for Professional Accountants in the Philippines shall include all prospective amendments thereto that may affect the provisions in these Rules.

2.4 Distribution Utilities (DUs) — shall refer to any electric cooperative, private corporation, government-owned utility or owned and operated by an existing local government unit which has an exclusive franchise to operate an electricity distribution system in accordance with Section 4 (q) of Republic Act No. 9136. cAHIaE

2.5 Energy Regulatory Commission (ERC) — shall refer to the regulatory agency created under Section 38 of Republic Act No. 9136.

2.6 Engagement Contract — shall refer to the legal document that binds the ERA in providing the services as agreed upon with the assigned DU and approved by the ERC. The said contract shall embody the requirements as specified in the Terms of Reference (ToR).

2.7 Engagement Team — shall refer to all personnel performing an engagement, including experts contracted by the ERA in connection with that engagement.

2.8 External Regulatory Auditor (ERA) — shall refer to an independent CPA or an accounting/auditing firm accredited by the ERC, whose relationship to the client is to perform regulatory audit services as required by the ERC.

2.9 Financial Interest — shall refer to an interest in equity or other security, debenture, loan or other debt instrument of an entity, including rights and obligations to acquire such an interest and derivatives directly related to such interest.

2.10 Gross Negligence — shall refer to such entire want of care as to raise a presumption that the person in fault is conscious of the probable consequences of carelessness, and is indifferent, or worse, to the danger of injury to person or property of others. The negligence must amount to a reckless disregard of the safety of person or property.

2.11 Independence — based on the definition as provided in the Code of Ethics for Professional Accountants in the Philippines, shall refer to as follows:

Independence is:

(a) Independence of mind — the state of mind that permits the provision of an opinion without being affected by influences that compromise professional judgment, allowing an individual to act with integrity, and exercise objectivity and professional skepticism; and HDIaST

(b) Independence in appearance — the avoidance of facts and circumstances that are so significant a reasonable and informed third party, having knowledge of all relevant information, including any safeguards applied, would reasonably conclude a firm's or a member of the assurance team or the ERA and members of the engagement team's integrity, objectivity or professional skepticism had been compromised.

2.12 Individual Practitioner — shall refer to an individual CPA engaged in the practice of public accountancy.

2.13 Partner — shall refer to one of the individuals or persons who is part or is a member of a partnership (general professional partnership of CPAs) with the sole purpose of exercising a common profession.

2.14 Partnership — shall refer to a general professional company/association of CPAs forming an accounting/auditing firm engaged in the practice of public accountancy and duly registered with the Securities and Exchange Commission (SEC) and accredited by the BOA.

2.15 Request for Proposal (RfP) — shall refer to the written communication to be issued by the ERC requesting the ERAs to submit proposals on any regulatory activity that will require the services of the latter.

2.16 Single/Sole Proprietorship — shall refer to an accounting/auditing firm owned or operated by an individual practitioner engaged in the practice of public accountancy, duly registered with the Department of Trade and Industry (DTI) and accredited by the BOA.

2.17 Terms of Reference (ToR) — shall refer to the document containing all the terms and conditions for the specific engagement that shall serve as the basis of a contractual relationship between the contracting DU and the ERA that shall be responsible for carrying out such engagement.

2.18 Verification Process — shall refer to ERA's systematic process of objectively validating, determining the accuracy, existence and completeness of information/data and records of a DU based on established criteria to determine if they are in accordance with the rules, regulations, guidelines and procedures promulgated or issued by the ERC. The process shall be conducted in accordance with the applicable Philippines Standards of Auditing (PSA). DaIAcC

ARTICLE II

Accreditation Process

Section 3. Professional Qualification Requirements. —

Only those applicants who possess the following professional qualifications shall be accredited by the ERC as ERA:

3.1. For Individual Practitioners, Individual Partners in Partnership Accounting/Auditing Firms and Individual CPAs Under the Employ of Accounting/Auditing Firms Opting to Apply for Accreditation

3.1.1 Must be duly registered with the Professional Regulation Commission (PRC), engaged in public accountancy as defined under Republic Act No. 9298 (R.A. No. 9298), otherwise known as "The Philippine Accountancy Act of 2004" and accredited by the Board of Accountancy (BOA) for the practice of public accountancy.

3.1.2 At the time of the application, the applicant must have at least five (5) years' experience performing external audit services. CAaSHI

3.1.3 At the time of the application, must have no outstanding complaints with the BOA, PRC, SEC and any other government agencies involving professional conduct.

3.2 For Accounting/Auditing Firms

3.2.1 The firm must be duly accredited by the BOA for the practice of public accountancy.

3.2.2 At the time of application, the proprietor, in case of a single/sole proprietorship firm or at least one (1) of the partners, in case of a partnership firm, must have at least five (5) years' experience performing external audit services.

3.2.3 Must have no outstanding complaints with the BOA, PRC, SEC and any other government agencies involving professional conduct.

3.2.4 At the time of application, the proprietor, in case of a single/sole proprietorship firm or at least one (1) signing partner, in case of a partnership firm, is already accredited or is qualified and is applying for accreditation by the ERC.

Section 4. Application Requirements. —

The following are the requirements for application for accreditation and renewal of accreditation for individual practitioners, individual partners of partnerships or individual CPAs under the employ of accounting/auditing firms opting to apply for accreditation and single/sole proprietorship and partnership accounting/auditing firms located in the Philippines:

4.1 Application for Accreditation. New applicants shall submit a duly accomplished and notarized application form (see "Form 1"), together with the documents listed hereunder, duly labeled and placed in a long folder.

Individual Practitioners, Individual
CPA Partners of Partnerships,	Auditing Firm
Individual CPAs Under the	(Single/Sole Proprietorships
Employ of Auditing Firms	and Partnerships)
Application letter addressed to the	Application letter addressed to the
ERC duly signed by the applicant	ERC duly signed by the proprietor, in
				case of a single/sole proprietorship,
				or the managing partner, in case of a
				partnership
Two (2) copies of most recent 1" x 1"
ID picture of the applicant
Two (2) copies of résumé (duly signed
on all pages) of the applicant which
shall contain the following information:
	1.	Name, complete address and
		contact number
	2.	Educational background
		-	Provide description of
			course title, name of
			school, year finished
			and honors received
	3.	Employment background
		-	Name/s of company/ies,
			position, status of
			appointment, inclusive
			dates of appointment
	4.	List of trainings/seminars
		attended for the last five (5)
		years (title, date, number of
		hours credited, venue,
		organizer)
		-	Attach photocopies of
			certificate of attendance/
			participation in any relevant
			trainings/seminars/
			workshops/conventions, etc.
	5.	Examinations passed or licenses/
		eligibility obtained/acquired
		-	Attach photocopy of the PRC
			License and/or certificates or
			any evidence of examinations/
			eligibilities passed.
	6.	Skills and specializations
Photocopy of the Certificate of	Photocopy of the Certificate of
Accreditation as a public practitioner	Accreditation as a public practitioner
issued by the BOA/PRC which should	issued by the BOA/PRC which
be current and effective	should be current and effective. It
				should include a copy of the list
				issued by the BOA which indicates
				the names of qualified partner/s of
				the firm
Proof of payment of appropriate	Proof of payment of appropriate
professional/privilege tax	professional/privilege tax by the firm
				Certified copies of all business permits
				and licenses issued by the local and/or
				national government (shall include but
				are not limited to: DTI registration for
				single/sole proprietorships, SEC
				registration for partnerships, Mayor's
				permit and licenses)
Proof of audit experience, enumerating
the most recent top five (5) clients in
terms of total assets showing
engagement period
				Copy of Quality Assurance Manual
				containing adequate audit procedures
				that will ensure full compliance with
				accounting and regulatory requirements
				and a written general description of client
				acceptance and retention policies,
				consultation process, procedures for
				monitoring professional ethics and
				independence from clients, risk
				management policies, and review and
				evaluation procedures
Certificate of Good Moral Character	Certificate of no pending
issued by two (2) disinterested	administrative and criminal case
persons, who are members in good	issued by the Legal Department of
standing of PICPA		PRC
Proof of payment of application fee in	Proof of payment of application fee
the amount of PhP3,000.00	in the amount of PhP10,000.00
Undertaking under oath that the	Undertaking under oath that the firm
applicant shall fully cooperate with the	shall fully cooperate with the ERC's
ERC's working requirements including	working requirements including the
the preservation of working papers,	preservation of working papers,
supporting documents, reports, as well	supporting documents, reports, as
as electronic copies of the same, for a	well as electronic copies of the
period of seven (7) years and making	same, for a period of seven (7) years
them available to the ERC and its	and making them available to the
representatives when required or	ERC and its representatives when
directed to do so		required or directed to do so

4.2 Renewal of Accreditation. Applicants applying for a renewal of accreditation, within sixty (60) calendar days prior to its expiration, shall submit a duly accomplished and notarized application form (see "Form 1"), together with the documents listed hereunder, duly labeled and placed in a long folder.

Individual Practitioners, Individual
CPA Partners of Partnerships,	Auditing Firm
Individual CPAs Under the	(Single/Sole Proprietorships
Employ of Auditing Firms	and Partnerships)
Photocopy of recent Certificate of	Photocopy of recent Certificate of
Accreditation as a public practitioner	Accreditation as a public practitioner
issued by the BOA/PRC	issued by the BOA/PRC. It should
	include a copy of the list issued by
	the BOA which indicates the names
	of qualified partner/s of the firm.
Copy of the previous ERC Certificate of	Copy of the previous ERC Certificate
Accreditation	of Accreditation
Photocopies of updated documents	Photocopies of updated documents
which were submitted to the ERC during	which were submitted to the ERC
the previous application for accreditation	during the previous application for
	accreditation
Payment of renewal fee in the amount	Payment of renewal fee in the
of PhP3,000.00	amount of PhP10,000.00

Section 5. Evaluation Procedure for Accreditation. —

5.1. Applications and all the required documents shall be evaluated for its completeness and veracity by the authorized ERC staff within twenty (20) working days from filing.

5.2. Any additional documents not previously listed in Section 4 hereof, but are deemed necessary, may be requested from the applicant within seven (7) working days from receipt of the application.

5.3. Applicants, whenever necessary, may be required to appear personally for an interview and/or to present the original/verified copies of the submitted documents for validation purposes.

Section 6. Disqualification from Accreditation. —

Applicants shall be disqualified from accreditation by the ERC on the following grounds:

6.1. Those who have been found misrepresenting the auditing firms, in the case of partnership, and/or whose license have been revoked or cancelled by the PRC/BOA for any reason. aTcSID

6.2. Falsification of documents or forging of signatures of the authorized signing auditor or partners of the partnership firms.

6.3. Those who have been found guilty by a competent court and/or by an administrative agency of any case involving crime, moral turpitude, fraud and/or unethical practices or of aiding or abetting or causing the commission of any such offense by another.

6.4. Those who have been found withholding information on any case involving the applicant's professional conduct pending before a competent court and/or an administrative agency.

Section 7. Issuance of Certificate of Accreditation and Renewal. —

7.1 For applications with incomplete documents, the ERC shall issue, within fifteen (15) working days from review of the application, a written notice informing the applicant of the lacking requirements. For applications with incomplete documents, it shall be required to submit the lacking documents within ten (10) working days from receipt of the notice.

7.2 A Certificate of Accreditation shall be issued to the applicant within five (5) working days upon approval of the application by the ERC. The accreditation of an ERA shall be valid for a period of three (3) years from date of approval of accreditation subject to its renewal.

7.3 Application for renewal shall be made through a letter, addressed to the Head of the ERC, not later than sixty (60) calendar days before the expiration of the Certificate of Accreditation.

ARTICLE III

Responsibilities and Conditions for Engagement Requirements

Section 8. Scope of Responsibilities of an ERA. —

The accredited external auditor shall verify all the documents, which may also include the conduct of on-the-spot inspection of the records of the DUs, as part of the confirmation process of all the automatic cost adjustment mechanisms.

Section 9.Conditions for Engagement of an ERA. —

In the appointment of an ERA for purposes of providing auditing services to a specific DU, the following conditions for engagement must be met: THaDEA

9.1 Only individual practitioners, sole proprietorships and partnerships, signing partner of the auditing firm who shall be responsible for the engagement, who are accredited by the ERC, shall be engaged by DUs for the conduct of verification process.

9.2 The ERA, including members of the engagement team to an audit and their family related up to the fourth civil degree of consanguinity or affinity should not have any direct or indirect financial interest in the DU subject of the current engagement or should not have committed to acquire such direct or indirect financial interest, or his/her independence is considered impaired under the circumstances specified in the Code of Ethics for Professional Accountants in the Philippines.

9.3 The ERA including members of the engagement team should not be related up to the fourth civil degree of consanguinity or affinity to any officer or employee of the DU subject of the current engagement.

9.4 The ERA, including members of the engagement team, should not be currently engaged or should not have been engaged during the past three (3) years in providing the below-listed non-audit services to the DU, unless the safeguards under the Code of Ethics for Professional Accountants in the Philippines are undertaken by the ERA to eliminate any doubt as to its independence:

a. Bookkeeping or other services related to the accounting records or financial statements of regulatory audit client DU/s;

b. Management accounting;

c. Preparation of Financial Statements;

d. Internal audit functions;

e. Actuarial Services;

f. Appraisal or valuation services; CTcSAE

g. Financial and other information systems design, implementation and assessment;

h. Management functions or human resources;

i. Broker or dealer, investment adviser or investment banking services;

j. Legal services and expert services unrelated to audit; and

k. Such other services which could affect his/her independence as may be determined by the ERC or as may be declared as impermissible by the ERC.

In case of a partnership, this limitation shall apply not only to the firm but also to the partners, associates and the auditor-in-charge of the current engagement.

9.5 The external auditors of the DU shall not be allowed to become the ERA or become a member of the engagement team for the said DU to avoid conflict of interest on the part of the ERA.

9.6 For the immediately preceding three (3) years, the ERA, including members of the engagement team should not have served as the certifying external auditor of the DU subject of the current engagement.

9.7 For the immediately preceding three (3) years, the ERA, including members of the engagement team should not have held any position in the DU subject of the current engagement, relevant to the conduct of verification such as but not limited to Chief Executive Officer, Chief Operating Officer, President, General Manager, Chief Financial Officer, Finance Manager, Comptroller, Accountant, Bookkeeper, Audit Committee, Auditor.

9.8 For the immediately preceding three (3) years, the ERA, including members of the engagement team should not have been an employee or officer of the DU subject of the current engagement, any of its affiliates and/or sister companies or have been a member of the Board of Directors of the said DU or any of its affiliates and/or sister companies. acAESC

9.9 The ERA shall at all times during the terms of engagement, comply, observe and submit the following:

a. Terms of its engagement letter/contract of services and its undertakings;

b. Reportorial requirements and directives of the ERC;

c. Provisions in these Rules relative to the delivery of services to the assigned DU;

d. Code of Ethics for Professional Accountants which include rules on independence or objectivity; and

e. Other pertinent laws, rules and regulations.

Section 10. Terms of Reference (ToR) and Engagement Contract. —

10.1 Terms of Reference. The ERC shall issue the Terms of Reference (ToR) for each periodic verification process that ERAs may be qualified to engage in. The said ToR shall be included in the Request for Proposals (RfP) which shall be transmitted to all ERAs of which the latter shall submit their respective proposals.

10.2 Evaluation of Proposals. The ERC shall evaluate each proposal to determine which ERA shall be appointed for each DU undergoing verification process. In evaluating the proposals, the ERC shall consider the following:

a. Manpower complement to work on the project;

b. Qualifications and experience of manpower;

c. Period to complete the project and submission of the required reports and documents to the ERC;

d. Procedures to be applied by the ERA; and

e. Full details of the cost to be charged for the project.

10.3 Engagement Contract. After selection by the ERC, the appointed ERA and the specific DU shall enter into an engagement contract based on the provisions as specified in the ToR and the approved proposal as evaluated. All the costs relative to the engagement contract shall be for the account of the DU and shall be included as a recoverable expense in the confirmation of automatic cost adjustments upon proof of actual payment made therein as provided in Article 5, Section 5 of the "Rules Governing the Automatic Cost Adjustment and True-Up Mechanisms and Corresponding Confirmation Process for Distribution Utilities". The contract between the ERA and the DU shall contain a provision that the disclosure of information by the ERA to the ERC shall not be a ground for civil, criminal or disciplinary proceedings against the ERA. IDESTH

Section 11. Reportorial Requirements. —

The required reports to be submitted by the ERA to the ERC shall strictly follow the timelines as set forth in the RfP and ToR.

The ERC may, at its discretion, issue an Order before, during, and after the referral of the case, to the ERA for the submission of specific reports within a period as prescribed in the RfP and ToR. In all instances, these submissions must be accompanied by a notarized certification on the completeness, accuracy and veracity of the statements and findings therein.

ARTICLE IV

Sanctions and Cancellation of Accreditation

Section 12. Sanctions. —

12.1 Grounds for Imposition of Fines and Penalties. The following shall constitute a violation by an ERA of these Rules:

12.1.1 Failure to submit within the prescribed period the reports required by the ERC relative to the ERA's terms of engagement

12.1.2 Any material misrepresentation in the following information or documents:

a. Application for accreditation;

b. Certifications submitted with the application; and

c. Report required by the ERC.

12.1.3 Refusal for no valid reason, upon lawful order of the ERC, to submit requested documents in connection with an ongoing case.

12.1.4 Gross negligence in the conduct of the verification process to comply with any of the requirements of the ERC. ICaDHT

12.1.5 Conduct of the verification process despite lack or eventual loss of independence as provided for under the Code of Professional Ethics for CPAs.

12.1.6 Conduct of any of the non-audit services enumerated under Section 9.4 of these Rules, if the ERA has not undertaken the safeguards as provided.

12.2 Applicable Fines. Any violation of these Rules shall be subject to the fines and penalties as provided in Resolution No. 3, Series of 2009, entitled, "Resolution Amending the Guidelines to Govern the Imposition of Administrative Sanctions in the Form of Fines and Penalties Pursuant to Section 46 of Republic Act No. 9136", as amended.

12.3 Non-Monetary Sanctions. The imposition of penalties shall be without prejudice to other administrative, civil or criminal remedies that the ERC may pursue, including the revocation of the accreditation and the recommendation to proper disciplining authorities of the erring ERA for revocation or suspension of the authority to practice his/her profession.

Section 13. Revocation or Cancellation of Accreditation or Appointment. —

The accreditation or appointment herein granted or issued shall be revoked, after due notice and giving the concerned ERA an opportunity to be heard, under any of the following circumstances:

13.1 Failure to settle the penalty within the prescribed period assessed for any of the violation under Section 12.1 hereof;

13.2 Loss of any of the qualifications or having any of the disqualifications provided for in Section 3 of these Rules and continuous failure to comply with all the other requirements of these Rules. However, expiration of registration as a requirement under Sections 3.1.1 and 3.2.1 shall not automatically be a ground for revocation or cancellation of accreditation hereof pending renewal thereof. The accreditation with the ERC shall be deemed conditional pending the issuance of the concerned government agency of the certificate of renewal. The ERA is required to submit to the ERC the certificate of renewal so as to revert back to the regular accredited status. DASEac

13.3 Withholding or concealing of information by an ERA or of the engagement team that may have an impact or implication on its report;

13.4 Directly or indirectly attempting to influence, or offering or agreeing to attempt to influence the official action of any officer or employee of the ERC by the use of threats, false accusations, duress or coercion, or by offering any special inducement or promise of advantage or by bestowing any gift, favor or thing of substantial value;

13.5 Certifying the accuracy and veracity of any report and other submissions to the ERC without conducting an actual verification/evaluation and review of the pertinent documents;

13.6 In case of partnership's dissolution, except for the purpose of admitting new partner/s, as evidenced by an Affidavit of Dissolution submitted to the BOA, or upon findings by the ERC that the partnership is dissolved; and

13.7 Any other justifiable cause as may be determined by the ERC.

ARTICLE V

Final Provisions

Section 14. Separability Clause. —

If for any reason, any part or section of these Rules is declared unconstitutional or invalid, the other parts or sections hereof which are not affected thereby shall continue to be in full force and effect.

Section 15. Effectivity. —

These Rules shall take effect fifteen (15) days following its publication in a newspaper of general circulation.

Pasig City, June 4, 2012.

 

(SGD.) ZENAIDA G. CRUZ-DUCUTChairperson

 

(SGD.) MARIA TERESA A.R. CASTAÑEDA

 

(SGD.) JOSE C. REYESCommissioner

 

(SGD.) ALFREDO J. NON

 

(SGD.) GLORIA VICTORIA C. YAP-TARUCCommissioner

FORM 1

Application Form