Water Crisis Act of 2025

TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session P12:06 JUL -7 SENATE S.B. No. 216 INTRODUCED BY SENATOR RISA HONTIVEROS AN ACT ESTABLISHING A LEGISLATIVE FRAMEWORK FOR WATER SERVICES IN THE PHILIPPINES, BY REFORMING NON-PERFORMING JOINT VENTURE AGREEMENTS AND ENHANCING INSTITUTIONAL OVERSIGHT AND ACCOUNTABILITY EXPLANATORY NOTE The Philippines confronts a deepening water crisis, particularly evident in the widespread failures of Local Water Districts (LWDs) operating under Joint Venture Agreements (JVAs) with private concessionaires. These arrangements, often spanning 25 years, have frequently led to deteriorating service quality, including tea-colored, foul-smelling, or intermittent water supply, weak pressure, reduced service hours, and surging Non-Revenue Water (NRW) levels far exceeding efficiency benchmarks, as seen in the experiences of PrimeWater and various LWDs like Metro San Fernando Water District. Despite commitments to increase water production and expand service coverage, many private partners have allegedly fallen short, leaving millions of Filipinos with inadequate access to a basic human right. The difficulty of extricating from these onerous contracts, often met with legal challenges such as restraining orders, underscores a critical need for a robust legislative intervention. A significant root of these problems lies in the flawed inception and execution of many JVAs. Audit reports by the Commission on Audit (CoA) consistently reveal irregularities. Furthermore, these agreements often feature unjustified revenue- sharing schemes, a glaring absence of effectively elucidated penalty clauses for non- performance. Many JVAs originated from unsolicited proposals, a procurement method that, if not rigorously managed, can bypass competitive bidding and result in contracts where crucial bid parameters, price, and performance metrics are vaguely defined or determined later, creating opportunities for disadvantageous terms.

The current oversight architecture for LWDs and their private partnerships is severely fragmented, contributing to a "governance crisis" in the water sector. Overlapping mandates and unclear roles among numerous agencies, including COA, Local Water Utilities Administration (LWUA), Governance Commission for GOCCS (GCG), Public-Private Partnership (PPP) Center, National Water Resources Board (NWRB), and Department of the Interior and Local Government (DILG), lead to regulatory conflicts, uncoordinated efforts, and a lack of decisive action. This institutional disarray enables "forum shopping" by parties, delaying accountability and perpetuating service deficiencies. The absence of a clear division of labor and a unified legal team to determine contract legitimacy, mandate corrections, and provide legal assistance has left many water districts vulnerable and unable to effectively address contractual breaches. Past legislative efforts, such as the National Water Crisis Act of 1995 (Republic Act No. 8041), proved temporary and reactive. While RA 8041 aimed to address immediate water supply issues and allowed for privatization, its critical "sunset clause" meant the Joint Executive-Legislative Water Crisis Commission ceased its functions after a mere six months. This temporary mandate failed to establish a permanent, robust framework for continuous oversight of private sector participation, inadvertently contributing to the proliferation of onerous contracts that now burden LWDs. The continued existence and exacerbation of the water crisis, decades after RA 8041, underscore a critical failure in legislative design and implementation, demanding a new, comprehensive, and enduring legal framework focused on systemic governance and contractual issues. The 2025 Water Crisis Act directly addresses these systemic failures by establishing a clear legal and institutional framework for LWD-private sector JVAs. It mandates the creation of a specialized JVA Oversight and Legal Team (JVA-OLT) within LWUA, tasked with comprehensive review, legal determination of contract legitimacy and nullity, and strategic intervention. This team will refine oversight processes, provide direct legal and technical assistance to LWDs in negotiations and pre-termination, and establish guidelines for tariff and Key Performance Indicator (KPI) reviews. The Act also introduces stricter guidelines for unsolicited proposals, mandating competitive bidding with clearly defined parameters from inception to prevent disadvantageous terms. Crucially, this Act prioritizes the restoration and expansion of water services to the public, even amidst extended legal disputes, by empowering LWDs, local government units (LGUs), and community water systems to undertake immediate service improvements. It formalizes collaborations with various local actors and

facilitates access to emergency funding and technical assistance. Furthermore, the Act mandates robust accountability for public officials involved in IVA formulation and oversight, imposing civil, criminal, and administrative liabilities for disadvantageous contracts or gross negligence. For private JVA partners, it establishes corporate criminal and civil liability, and critically, introduces successor liability, ensuring that changes in ownership do not extinguish existing obligations or liabilities for past performance failures, thereby reaffirming commitments and fostering a truly legitimate and publicly-oriented water sector. In view of the forgoing, the passage of this bill is earnestly sought. SAt VE saraquel RISA HONTIVEROS Senator

TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session JUL -7 Fi2:07 SENATE S.B. No. _ INTRODUCED BY SENATOR RISA HONTIVEROS AN ACT ESTABLISHING A LEGISLATIVE FRAMEWORK FOR WATER SERVICES IN THE PHILIPPINES, BY REFORMING NON-PERFORMING JOINT VENTURE AGREEMENTS AND ENHANCING INSTITUTIONAL OVERSIGHT AND ACCOUNTABILITY CHAPTER 1 GENERAL PROVISIONS AND DECLARATION OF POLICY

SECTION 1, Short Title. - This Act shall be known as the "Water Crisis Act of

2025." Sec, 2. Declaration of Policy. - The State hereby declares its policy to recognize and uphold water as a fundamental human right and a public trust, ensuring access to safe, sufficient, affordable, and sustainable water supply, sewerage, and sanitation services. The provision of these services, particularly through Local Water Districts 7 (LWDs) and their joint venture agreements (JVAs), is imbued with paramount public interest and shall be subject to stringent regulation and oversight to ensure efficiency, reliability, and affordability. This Act specifically addresses the pervasive issues of non- performing and onerous JVAs, including flaws in their inception, execution, and monitoring. It aims to rectify systemic failures in contractual terms, performance measurement, institutional oversight, and transparency. Furthermore, it seeks to resolve the existing institutional overlaps and inadequacies among government agencies in providing effective assistance and regulatory guidance to water districts, ensuring coordinated action and robust accountability for both public officials and private entities involved in these agreements.

sec, 3. Scope and Applicability. - This Act shall primarily focus on the governance, regulation, and oversight of Local Water Districts (LWDs) and their joint venture agreements (JVAs) or other forms of public-private partnerships (PPPs) with private water service providers nationwide, particularly concerning issues of contract inception, performance, and termination. It shall also cover the roles and responsibilities of national government agencies and local government units in ensuring the effective management and delivery of water services by LWDs and their partners.

Sec. 4. Definition of Terms. -

For the purpose of this Act, the following terms shall mean: a. Joint Venture Agreement (JVA): A contractual arrangement between a local water district (LWD) and a private entity for the operation, repair, development, and construction of water infrastructure, maintenance of supply and septic management, and collection of service fees. Local Water District (LWD): A government-owned and controlled corporation (GOCC) created under Presidential Decree No. 198, responsible for water supply and distribution in provincial cities and municipalities outside Metro Manila. c. Non-Revenue Water (NRW): Water that has been produced and lost before it reaches the customer, whether through real losses (leaks) or apparent losses (theft or metering inaccuracies). A benchmark of 20% or less indicates efficiency. d. Onerous Contract: A contract that is excessively burdensome, oppressive, or one-sided, particularly when its terms are so unjust that they shock the conscience of the court, or when they contravene law, morals, good customs, public order, or public policy. e. Performance-Based Regulation: A regulatory approach that links tariffs and contractual incentives/penalties to the achievement of pre-defined service level standards and efficiency targets. f. Public-Private Partnership (PPP) Code of the Philippines (RA 11966): The governing law for PPP projects in the Philippines, providing a framework for private sector participation in infrastructure and development projects.

g. Swiss Challenge: A competitive process for unsolicited proposals where third parties are invited to submit superior offers, with the original proponent having the right to match the best proposal. h. Successor Liability: The principle by which a new entity may be held responsible for the obligations or liabilities of a previous entity, particularly in cases of asset acquisition, merger, or change of ownership, especially when there is continuity of business operations or intent to evade obligations. i. Water Service Provider (WSP): Any entity, public or private, providing water supply, sewerage, or sanitation services. CHAPTER 2 INSTITUTIONAL OVERSIGHT AND COORDINATION FOR JVAS

Sec. 5. Rationalization of Oversight Bodies for Water Districts and JVAS. -

(a) Establishment of a Unified JVA Oversight and Legal Team. There is hereby created a specialized JVA Oversight and Legal Team (JVA-OLT) within the Local Water Utilities Administration (LWUA), which shall serve as the primary body responsible for the comprehensive review, legal determination, and strategic intervention in joint venture agreements (JVAs) and other private sector participation contracts involving Local Water Districts (LWDs). This team shall be composed of legal, financial, engineering, and public administration experts, and shall directly address the historical fragmentation, overlaps, and inadequacy in oversight functions of various agencies concerning LWD JVAs. To ensure effective and coordinated oversight, the JVA-OLT shall, at a minimum, require relevant government agencies, including the Commission on Audit (COA), National Water Resources Board (NWRB), Governance Commission for GOCCS (GCG), Anti-Red Tape Authority (ARTA), and the Public-Private Partnership (PPP) Center, to: i. Information Gathering and Assembly: Systematically gather and assemble comprehensive information on the investment plans, actual service levels, compliance with contractual procedures, and reporting requirements of all LWDs and their JVA partners. This includes data on Non-Revenue Water (NRW),

service coverage, water quality, pressure, and hours of supply, which are critical for performance evaluation and public disclosure. ii. Process Refinement and Capacity Building: Refine their own internal processes for capacity building of LWDs, rigorous monitoring of contractual covenants, strengthening of internal audit mechanisms, and enhancing public disclosure of operations and performance. This also extends to improving external auditing methodologies to identify and flag irregularities more effectively. ii. Elucidation of Implementing Rules and Regulations (IRRs): Elucidate and, where necessary, amend their respective implementing rules and regulations for existing laws, with a view to establishing clear, consistent, and legally binding rules and norms. These refined IRRs shall serve as the authoritative reference for LWUA's own regulatory engagement with water districts and their joint venture partners, thereby minimizing ambiguities and conflicts in interpretation and enforcement. (b) Mandate of the IVA-OLT. The JVA-OLT shall have the following specific mandates: i. Legitimacy and Nullity Determination: To conduct in-depth legal and financial audits of existing JVAs to determine the legitimacy, validity, and potential nullity of specific contractual provisions, particularly those deemed onerous, disadvantageous to the government or the consuming public, or entered into without proper due diligence or competitive bidding. This includes scrutinizing the basis of revenue-sharing schemes, cost recovery mechanisms, and the absence of adequate penalty clauses. ii. Procurement Procedure Review: To review the procurement procedures followed for existing IVAs, especially those initiated through unsolicited proposals (e.g., Swiss Challenge), to determine if proper bid parameters, price, and performance metrics were adequately defined at inception, or if these were problematically determined later, leading to disadvantageous terms. The IVA- OLT shall recommend corrective actions for such procedural deficiencies. iii. Coordination and Division of Labor: To serve as the central coordinating body for all oversight activities related to LWD JVAs, ensuring a clear division of labor and preventing forum shopping among agencies such as the Commission on

Audit (COA), Local Water Utilities Administration (LWUA), Governance Commission for GOCCS (GCG), Public-Private Partnership (PPP) Center, National Water Resources Board (NWRB), and Department of the Interior and Local Government (DILG). The JVA-OLT shall issue executive and administrative orders to clarify roles, streamline processes, and mandate coordinated actions. iv. Assistance in Negotiations: To provide direct legal, financial, and technical assistance to LWDs in their negotiations with private partners for contract amendments, renegotiations, or pre-termination, ensuring that LWDs are adequately represented and empowered. v. Guidelines for Reviews: To establish and enforce comprehensive guidelines for 5th-year tariff and Key Performance Indicator (KPI) reviews for all IVAS, ensuring transparency, public disclosure, and strict adherence to performance benchmarks. vi. Pre-termination and Legal Representation: To mandate and facilitate the pre- termination of non-performing JVAs based on established grounds of material breach or disadvantageous terms, and to provide legal representation to LWDS in any related legal proceedings, including those challenging restraining orders or injunctions. vii. Overruling OGCC Opinions: To establish a mechanism, through executive and administrative orders, for the JVA-OLT, with the approval of the President, to overrule opinions from the Office of the Government Corporate Counsel (OGCC) or other legal bodies that unduly restrict LWDs' ability to act in the public interest regarding JVA legitimacy, nullity, or termination, especially when such restrictions lead to continued public detriment.

Sec. 6. Strengthening LWUA's Role in JVA Oversight and Intervention. - The Local

Water Utilities Administration (LWUA) shall be specifically empowered and adequately resourced to act as the primary oversight and intervention agency for LWDS concerning their IVAs. LWUA shall conduct regular, in-depth performance audits of all LWDs with IVAs, focusing on service delivery, financial viability, and compliance with contractual obligations, and shall report findings directly to the JVA-OLT. LWUA shall have clear authority to recommend and, if necessary, implement the takeover of mismanaged or non-performing LWDs or their JVA-related operations, as provided

under Article V of PD 198, without undue delay, especially when public heaith and welfare are at risk.

Sec. 7. Role of the PPP Center in JVA Procurement and Monitoring. - The PPP

Center shall develop and enforce stricter guidelines for the evaluation and approval of unsolicited proposals for water supply and sanitation projects, particularly those involving LWDs. These guidelines shall mandate the clear definition of bid parameters, technical specifications, and measurable performance indicators (e.g., NRW reduction targets, service coverage expansion, water quality standards) from the initial stages of proposal submission, ensuring that price and performance metrics are not left to be determined later in negotiations. The PPP Center shall also enhance its monitoring of JVA implementation, with a focus on contract compliance and public interest protection, and shall share all relevant data with the JVA-OLT.

Sec. 8. Role of COA, GCG, NWRB, and DILG in JVA Accountability. -

a. Commission on Audit (CoA): CoA shall continue its mandate of auditing LWDs and their JVAs, with a specific focus on identifying and reporting instances of overpricing, unjustified revenue sharing, non-compliance with investment commitments, and procurement irregularities. CoA reports shall serve as primary evidence for the JVA-OLT's legitimacy and nullity determinations. b. Governance Commission for GOCCs (GCG): GCG shall integrate IVA performance and compliance with this Act into its performance evaluation scorecards for LWDs and their boards, ensuring that good governance principles are applied to private partnerships. GCG shall also vet LWD board nominees for competence in JVA oversight and management. c. National Water Resources Board (NWRB): NWRB shall collaborate with the JVA- OLT and LWUA to ensure that water permits, tariff grants and corresponding resource allocations for investments and operations for IVA projects are consistent with service delivery targets and sustainable water management, and shall provide data on water resource availability and usage to support JVA performance assessments. d. Department of the Interior and Local Government (DILG): DILG shall assist LGUs in understanding their oversight roles concerning LWDs and their JVAs, and shall facilitate LGU and community participation in monitoring JVA

performance and advocating for service improvements. The DILG shall also advise LGUs on their role as potential investors in water districts, even with the presence of a IVA. CHAPTER 3 FACILITATING REFORM AND STRENGTHENING IMMEDIATE AND MEDIUM- TERM SERVIVE PROVISION ARRANGEMENTS

Sec. 9. Primacy of Public Service and Capacity Restoration. - In the event of

extended legal disputes, non-performance, or marked deterioration of services under existing Joint Venture Agreements (JVAs), this Act declares the immediate restoration and expansion of water and sanitation services to the public as paramount. Where there is a conflict between private contractual interests and the public's right to essential water services, the latter shall take primacy. Recognizing the vastly atrophied capacities of many Local Water Districts (LWDs) resulting from the reduction and retirement of their personnel, and the near-complete handing over of revenue collection, capital investment, and operational roles to private JVA partners, this Act mandates the immediate reinstatement and strengthening of LWD capacities. This includes the formalization of collaborations with local governments (LGUs), nearby water districts, community water service providers (e.g., cooperatives, homeowners associations), investors, and other private water operators to ensure continuous and improved service delivery.

Sec. 10. LWA Intervention in Deteriorating Water Districts. - The Local Water

Utilities Administration (LWUA) or its duly authorized agents shall be empowered to replace members of the Board of Directors of a Local Water District (LWD) upon the recommendation of the local chief executive. LWUA may perform these functions even when a water district is not in default of its financial obligations, provided that LWUA determines, based on objective and verifiable criteria, that there is a marked, precipitous, and possibly irreversible deterioration of the services, assets, and financial capacities of the water district. This determination shall be made after due investigation and consultation with relevant stakeholders, ensuring due process for the affected board members.

Sec. 11, Catch-Up Plans and Contractual Re-Legitimization. - Joint Venture (JV)

partners and Local Water Districts (LWDs) may pursue the formalization of "catch-up plans" as an approach to address past service deficiencies and investment gaps. However, the formalization of such catch-up plans shall be deemed as conclusive evidence of past failure to execute and finance on investment and service-level improvement commitments as stipulated in the original JVA. Such formalization shall not be construed as a waiver by the water district of its rights to demand payment refunds, impose penalties, effect forfeiture of performance bonds, or initiate entry into new joint venture arrangements that may reduce the role of incumbent, underperforming private joint venture partners. Nevertheless, it is hereby declared that a drastic and sustained improvement in the performance of private joint venture partners, coupled with full compensation to the water district and its customers for past service delivery gaps and financial losses, can, after the initial five years of the JVA, put the 25-year joint venture agreement on a fresh, legitimate footing, subject to the review and approval of the JVA-OLT. Moving forward, the LWUA and the PpP Center shall jointly determine the need to classify existing and future joint venture agreements as concession agreements that, among other things, will require the private joint venture partners (similar to those in Metro Manila) to secure congressional franchises, thereby subjecting them to a higher level of public accountability and legislative oversight. CHAPTER 4 CONTRACTUAL REFORMS AND TRANSPARENCY FOR JVAS

Sec. 12. Mandatory Review and Revision of Onerous JVAs. -

(a) Comprehensive Review of Existing JVAs. Within one (1) year from the effectivity of this Act, the JVA-OLT shall conduct a mandatory, comprehensive review of all existing joint venture agreements (JVAs) between local water districts and private water service providers. This review shall specifically identify provisions that are onerous, disadvantageous to the government or the consuming public, or have led to persistent service failures and non-compliance with contractual obligations, including but not limited to: overpricing of capital

expenditures (CAPEX), unjustified revenue-sharing schemes, inadequate penalty clauses for non-performance, failure to meet investment and service delivery targets (e.g., water production, service coverage, water quality, NRW reduction), and non- provision of mandated services like septage management. (b) Grounds for JVA Revision or Termination. A JVA may be revised or terminated if the review determines that: i. There is a material breach of contract, including persistent failure to meet performance standards (e.g., water production targets, service coverage, water quality, NRW benchmarks). ii. The contract contains provisions that are manifestly and grossly disadvantageous to the government or the public interest, such as those allowing excessive cost recovery, prohibiting government interference in regulatory functions, or lacking proper basis for revenue sharing. iii. The private concessionaire or JV partner has failed to provide sufficient funds or investment for service improvement as stipulated in the agreement. iv. The contract was entered into without proper competitive bidding or due diligence, or involved unlawful acts or procedural irregularities (e.g., problematic unsolicited proposals where bid parameters were not clearly defined at inception). v. The contract's terms have become so difficult or manifestly inequitable due to unforeseen supervening developments, justifying judicial readjustment or termination. (c) Legal Mechanisms for Revision and Termination ("Use It or Lose It"). The JVA-OLT shall have the authority to initiate renegotiation of onerous JVAs. If renegotiation fails, the JVA-OLT shall recommend to the President the termination of such contracts, adhering to principles of due process and existing laws on contract termination for default, convenience, or unlawful acts. The government's ability to terminate contracts without prior court approval, particularly when provisions are deemed disadvantageous or irregular, has been affirmed. This Act explicitly grants the JVA-OLT and relevant government agencies the power to pursue all legal avenues, including judicial action, to restore public control over water services where private

performance has failed, embodying a "use it or lose it" attitude towards non- performing private partners.

Sec. 13. Enhanced JVA Transparency and Disclosure. -

(a) Public Disclosure of JVA Contracts. All new and existing joint venture agreements (JVAs) for water supply, 6 sewerage, and sanitation services shall be made publicly accessible through the official 7 websites of LWUA, PPP Center, and relevant LWDs. This disclosure shall include, but not be limited to, full contract terms, financial provisions (e.g., tariffs, revenue sharing, investment commitments), detailed performance indicators, and audit reports. (b) Standardized Reporting and Performance Indicators. The JVA-OLT, in coordination with LWUA and NWRB, shall develop and enforce a standardized framework for performance measurement and disclosure for all water service providers operating under JVAs. This framework shall include key performance indicators (KPIs) such as Non-Revenue Water (NRW), service coverage, water quality, pressure, hours of supply, and customer satisfaction, with clear targets and penalties for non-compliance. All LWDs and their private JVA partners shall be required to submit regular, independently verified performance reports to the JVA-OLT, which shall be publicly disclosed. This directly addresses past failures in performance measurement and disclosure by water districts and concessionaires, consistently flagged by CoA.

Sec. 14. Prohibition of Unsolicited Proposals for Core Water Services, -

Unsolicited proposals for new water supply, sewerage, and sanitation projects that fall under the core public utility mandate of LWDs shall be prohibited, unless they demonstrably introduce truly innovative technologies or solutions not otherwise available through solicited processes. All new projects for core water services shall undergo competitive public bidding, ensuring transparency, fairness, and optimal value for money from inception, with clearly defined bid parameters and performance metrics. Any exceptional unsolicited proposal shall be subject to a rigorous Swiss Challenge process with strict oversight by the JVA-OLT and PPP Center, ensuring that the public interest is paramount and that all terms, including price and performance, are competitively determined from the outset.

CHAPTER 5 ENABLING LWD, LGU, AND COMMUNITY INVESTMENTS

Sec. 15. Immediate Service Improvement During Contract Disputes. -

Recognizing the severe and immediate nature of water service deficiencies, this Act shall establish mechanisms to enable Local Water Districts (LWDs), Local Government Units (LGUs), and community water systems (e.g., cooperatives, homeowners associations) to undertake service-level improvements, including rudimentary but promising initiatives, even while IVA pre-termination or contract renegotiation processes are ongoing. (a) Emergency Funding and Technical Assistance. The LWUA, in coordination with the DILG and the JVA-OLT, shall establish a dedicated emergency fund and technical assistance program to support LWDs and LGUs in implementing collaborations for immediate service improvements in areas affected by non-performing JVAs. This fund shall be accessible without undue bureaucratic delays, recognizing the critical need for continuous water supply. Technical assistance shall include rapid assessment of infrastructure needs, engineering support, and operational guidance to ensure continuity of service. (b) Empowering LGU and Community Co-Design and Co-Financing. LGUs shall be formally empowered to co-design and co-finance service-level improvements, including those that are rudimentary at the start but promising sustained improvements, in coordination with LWDs and affected communities (e.g., cooperatives, homeowners associations). This shall include: i. Formal Integration of Community-LGU Financing: The support for community- LGU co-financing shall be formally made a part of the obligation of water districts towards their unserved constituencies, especially during but not limited to periods of JVA transition or failure. ii. Minimum Design Templates for Citizens' Charters: The DILG, in consultation with LWUA and the JVA-OLT, shall issue minimum design templates for LWD Citizens' Charters, requiring the formal inclusion of provisions for community involvement in service improvement planning, grievance redress, and co-

financing mechanisms. These templates shall ensure transparency in LWD operations and foster active participation from unserved constituencies. ili. Facilitating Access to Funds: Mechanisms shall be established to facilitate LGU and community access to national government funds, concessional loans, and blended finance for water supply and sanitation projects, especially in areas where JVAs are under review or being terminated. CHAPTER 6 ACCOUNTABILITY AND ENFORCEMENT FOR JVA FAILURE

Sec. 16. Accountability of Public Officials in JVA Formulation and Oversight. -

(a) Strict Accountability for Public Trust. Public officials and employees involved in the formulation, negotiation, approval, and oversight of joint venture agreements (JVAs) in the water sector, including those in LWDs, LWUA, PPP Center, GCG, NWRB, DILG, and other relevant agencies, shall be held to the highest standards of accountability, integrity, competence, and loyalty, upholding public interest over personal interest at all times. They shall be civilly, criminally, and administratively liable for any acts or omissions that cause injury, loss, or damage to the public or the government, particularly in relation to disadvantageous contracts, graft, corruption, gross negligence, or manifest partiality in the performance of their duties related to JVAs. (b) Enhanced Oversight and Penalties. The Office of the Ombudsman, the Commission on Audit (CoA), and other relevant oversight bodies shall be strengthened to investigate and prosecute cases of malfeasance, misfeasance, and nonfeasance by public officers in the water sector, specifically concerning JVA irregularities. Penalties shall be commensurate with the gravity of the offense, including imprisonment, fines, forfeiture of ill-gotten wealth, and perpetual disqualification from public office.

Sec 17. Corporate Accountability and Successor Liability for Private JVA

Partners. - (a) Corporate Criminal and Civil Liability.

Private water service providers, including concessionaires and joint venture partners, shall be held criminally and civilly liable for violations of this Act, other relevant laws, and the terms of their JVAs. Penalties shall extend to responsible corporate officers and directors who assent to patently unlawful acts, are guilty of gross negligence or bad faith in directing the affairs of the corporation, or acquire personal or pecuniary interest in conflict with the corporation's interests, leading to damages to the public or the government. 8 (b) Successor Liability for Onerous Contracts. In cases of changes in private sector ownership of a JVA partner, including mergers, acquisitions, or asset transfers, the successor entity shall be held liable for the existing obligations, liabilities, and judgments against the predecessor entity, particularly those arising from onerous contracts, service failures, or procurement irregularities related to the JVA. This principle of successor liability shall apply where there is continuity of business operations, workforce, or facilities, or where there is evidence of intent to evade obligations. Due diligence requirements for acquiring entities shall be enhanced to identify and account for all potential JVA-related liabilities. The PPP Code of the Philippines already emphasizes that PPP borrowers remain responsible for their obligations regardless of ownership changes, a principle reinforced and expanded by this Act for JVAs.

Sec. 18. Penalties and Sanctions. - Any person, public official, or private entity

found in violation of the provisions of this Act related to JVAs shall be subject to severe civil, criminal, and administrative penalties, including fines, imprisonment, forfeiture 23 of property, and revocation of licenses or franchises, as determined by the appropriate courts or regulatory bodies. CHAPTER 8 FINAL PROVISIONS

Sec. 24. Implementing Rules and Regulations. - Within one hundred twenty

(120) days from the effectivity of this Act, the Local Water Utilities Administration (LWUA), through the IVA Oversight and Legal Team (JVA-OLT), in consultation with relevant government agencies (PPP Center, GCG, NWRB, DILG, COA), local

government units, civil society organizations, and private sector stakeholders, shall promulgate the necessary rules and regulations for the effective implementation of this Act, specifically focusing on the detailed procedures for JVA review, renegotiation, termination, and accountability.

Sec. 25. Separability Clause. - If any provision or part of this Act is declared

unconstitutional or invalid, the remaining parts or provisions not affected thereby shall remain in full force and effect.

Sec. 26. Repealing Clause. - All laws, decrees, executive orders, proclamations,

rules, and regulations, or parts thereof inconsistent with the provisions of this Act are hereby repealed, amended, or modified accordingly.

Sec. 27. Effectivity. - This Act shall take effect fifteen (15) days after its

complete publication in the Official Gazette or in at least two (2) newspapers of general circulation. Approved,