Dnd Proper Transformation Act

TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES 25 JUL 10 P3:11 First Regular Session SENATE RECEIVED DI S. No. 384 Introduced by Senator Jinggoy Ejercito Estrada AN ACT STRENGTHENING THE DEPARTMENT OF NATIONAL DEFENSE PROPER AND APPROPRIATING FUNDS THEREFOR EXPLANATORY NOTE In light of continuing geopolitical tensions in the region and the uncertainties brought about by emerging threats to peace and national security, it is essential that the State maintains a defense establishment that is ready to respond to these modern challenges. After all, a safe and stable environment is the bedrock of national development. This bill proposes the transformation of the Department of National Defense (DND) Proper into an agile, modernized and proactive organization that serves as an effective resource manager, strategic director, and service provider to the Armed Forces of the Philippines, Government Arsenal, Office of Civil Defense, National Defense College of the Philippines, and Philippine Veterans Affairs Office. It is lamentable that the DND Proper ranks among those with the lowest number of permanent positions out of all the departments in the executive branch. Despite having an estimated stakeholder base of over a million individuals and managing assets exceeding P100 billion in value', it has only 347 authorized positions with 53 key positions and 32 technical positions. We also note that while there had been legislation towards strengthening professionalism and upgrading the capabilities 1 Transcript of Stenographic Notes (TSN), Public hearing of Committee on National Defense and Security, Peace, Unification and Reconciliation joint with the Committees on Civil Service, Government Reorganization and Professional Regulation, Ways and Means and Finance. August 7, 2023.

of the AFP, the DND Proper structure remained unchanged over the years. The outdated setup ultimately limits its efficiency in fulfilling its critical role as the "mother agency" of the Philippine defense establishment. This measure further clarifies the powers and functions of the DND Proper and the Defense Secretary, and recommends organizational updates including the establishment of sub-national offices throughout the country, institutionalization of a Corps of National Defense Specialists, continuing education for its personnel, and strict adherence to the protection of sensitive information, among others. In view of ensuring a formidable defense agency amidst evolving global security risks, the consideration and passage of this bill is sought. 54867/ JINGGOY EJERCITO ESTRADA

TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session 25 JUL 10 P3:11 SENATE RECEIVED BY: S. No. 384 Introduced by Senator Jinggoy Ejercito Estrada AN ACT STRENGTHENING THE DEPARTMENT OF NATIONAL DEFENSE PROPER AND APPROPRIATING FUNDS THEREFOR Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: ARTICLE I GENERAL PROVISIONS

Section 1. Short Title. - This Act shall be known as the "DND Proper

Transformation Act".

Sec. 2. Declaration of Policy. - It is hereby declared the policy of the State to

maintain a defense establishment capable of upholding Philippine sovereignty, territorial integrity, and national interests, and thereby foster a safe and stable environment for national development; and promote the well-being and safety of the Filipino people in a proactive and sustainable manner. The State recognizes the urgent need to craft a defense architecture that will be adaptable, flexible, and sustainable amid challenges through an operationally secure system. The capability and capacity re-building of the Department of National Defense (DND) and the DND Proper must be immediately undertaken to adequately perform its critical mandate in our country's national defense environment while reaffirming the Constitutional principle that civilian authority, is at all times, supreme over the military.

To achieve these, the DND shall be transformed into an agile, resilient, modernized, and responsive organization.

Sec. 3. Definition of Terms. - As used in this Act, the following terms are defined

as follows: a) Department of National Defense - refers to the Department of National Defense (DND) Proper, including its attached bureaus. b) Defense Infrastructure - refers to capacitating system composed of tangible (e.g., physical facilities, equipment, human resources) and intangible (e.g., policies, processes) components to sustain and enhance multi-domain defense capabilities. Defense Real Properties - refers to the lands, buildings, and constructions of all kinds which are owned, operated, or used by the Armed Forces of the Philippines (AFP) or other DND bureaus for defense and security, and other purposes necessary for the accomplishment of the Department's mandate. DND Proper - refers to offices under the direct control and supervision of the Office of the Secretary of National Defense. e) Global Knowledge Networks - refers to a system of interconnected individuals, organizations, and institutions across the world that share, develop, and disseminate knowledge and information. ARTICLE IT THE DND PROPER: MANDATE, POWERS, AND FUNCTIONS

Sec. 4. The DND Proper. - The DND Proper shall assist the Secretary of National

Defense in carrying out the Secretary's duties and responsibilities and other duties as may be prescribed by law.

Sec. 5. Mandate of the DND Proper. - The DND Proper is mandated to provide

strategic policy advice and direction, and develop the capability of its attached bureaus. The DND Proper shall: a) Assess the security environment and capability gaps; b) Identify enabling solutions and craft defense strategies, plans, and policies;

c) Develop and maintain an adaptive defense infrastructure that capacitates the defense establishment to understand and leverage the complexities of the security environment in enhancing its capabilities; d) Manage and provide defense resources and services; e) Strengthen stakeholder relations for defense priorities; and f) Conduct monitoring and evaluation of the efficiency, effectiveness, and integrity of the programs and operations of the DND.

Sec. 6. Powers and Functions of the DND Proper. - In the fulfillment of its

9 mandate, the DND Proper shall: a) Formulate national defense strategies, plans, policies, and programs, including a rational, functional, and sustainable mobilization plan for the deployment of the country's citizens and resources for national defense; b) Institutionalize and develop a system that shall integrate and formulate, among others, security environment assessment, planning, resource management, research and development (R&D) and innovation, acquisition, control, support, administration, and decision-making responsibilities of the Secretary of National Defense and the senior officers of the DND Proper; c) Formulate, establish, implement, and supervise a sustainable and resilient management system suitable to the requirements of the defense establishment and its stakeholders; d) Enter into and execute contracts of every class, kind, and description which are necessary or incidental to the performance of its mandate as provided herein, with any person, firm or corporation, public or private, and with foreign government entities, subject to the requirements of national security; e) Develop, enhance, and sustain multidimensional defense cooperation and engagements with the defense establishments and armed forces of other countries, and other regional and international organizations, as well as with global knowledge networks and defense industries in accordance with sustainable development and national security goals; f) Develop a self-reliant and agile defense force, including entering into partnerships with foreign entities, that is capable of identifying strategic

vulnerabilities, addressing current and potential threats, and mitigating risks across the domains of war through developing adaptive and sustainable defense infrastructure; g) Oversee effective disaster resilience initiatives in collaboration with national government agencies, LGUs, foreign defense establishments and armed forces, as well as intergovernmental and international humanitarian organizations; h) Exercise supervision over the AFP and control over attached bureaus through the formulation, implementation, and monitoring and evaluation of national defense, and corporate, service, or manufacturing strategies, policies, plans, and programs; i) Develop the capacities and capabilities of the AFP and attached bureaus to effectively and efficiently address mission requirements; and j) Perform such other defense-related functions as may be provided by law or directed by the President of the Philippines. ARTICLE III ORGANIZATION AND MANAGEMENT OF THE DND PROPER

Sec. 7. Composition of the DND Proper. - The DND Proper shall be headed by

the Secretary of National Defense, hereinafter referred to as "the Secretary", and shall be composed of the Office of the Secretary, the Offices of the Undersecretaries and Assistant Secretaries, and the delivery units and offices.

Sec. 8. The Secretary of National Defense. - The Secretary shall be appointed

by the President, subject to the confirmation by the Commission on Appointments.

Sec. 9. Powers and Functions of the Secretary of National Defense. - The

authority and responsibility for the exercise of the mandate, powers, and functions of the DND shall be vested in the Secretary, who shall exercise supervision and control over the DND. For such purposes, the Secretary shall have the following powers and functions: a) Advise the President on all matters of national defense policy, including the promulgation of executive and administrative orders, and on the formulation of necessary regulatory and legislative proposals on matters pertaining to national defense and security;

b) In times of war, the Secretary shall act as alter ego to the Commander-in- Chief, manage and control all information across all types of media, and administer mobilization of appropriate personnel and resources; c) In times of national emergency, natural hazards or other related disasters, the Secretary shall have the authority to mobilize and/or call reservists to active duty; d) Provide executive direction and exercise supervision over the Department and its attached bureaus for program and policy coordination; e) Establish policies and standards for the efficient and effective operation of the DND, consistent with the programs of the government; f) Evaluate policies, plans, programs, projects, performance, and accomplishments of the Department, which shall be made available to the public through its website or any other means that will ensure broad dissemination of its contents, subject to operational security requirements; g) Appoint all officers and employees of the DND and its attached bureaus, except those whose appointments are vested in the President or other appointing authority; h) Grant appropriate allowances and incentives to officials and employees to guarantee a competitive salary structure in accordance with existing laws, rules, and regulations; i) Exercise disciplinary powers over officers and employees of the Department Proper, including their investigation and the designation of committee or officer to conduct such investigation, and establish security criteria for the same; j) Issue orders, directives, rules, regulations, and other issuances to carry out plans, policies, programs, or projects pursuant to the provisions of this Act, and exercise such other powers as may be required to implement and realize the objectives of this Act; and k) Perform such other functions as may be provided by law or assigned by the President.

Sec. 10. National Defense Executives. - The Secretary shall be assisted by at

least six (6) Undersecretaries, at least eight (8) Assistant Secretaries, and at least

1 sixteen (16) Directors and Assistant Directors of an equivalent number of delivery units 2 and/or offices. They shall be appointed by the President upon the recommendation of the Secretary.

Sec. 11. Qualifications of the National Defense Executives. - No person shall be

5 appointed as Undersecretary, Assistant Secretary, Director, Assistant Director, or any 6 third-level position in the DND unless the appointee is a citizen and resident of the Philippines, of good moral character, of proven integrity, and highly qualified for the position by reason of background and relevant experience.

Sec. 12. Sub-National Offices. - The DND may establish, operate, and maintain

sub-national offices throughout the country, as management necessities require, based on the determination of the Secretary of National Defense. Each sub-national office shall be headed by a Director, who shall be assisted by an Assistant Director.

Sec. 13. Structure of the DND Proper. - The DND Proper shall determine its

organizational structure and propose the creation of new divisions or units as it may deem necessary, and shall appoint qualified officers, specialists, and employees. Members of the armed forces in the active service may be assigned or detailed for duty in the DND Proper: Provided, That they shall not be appointed or designated in any capacity to a civilian position. The service of those assigned or detailed for duty 19 in the DND Proper shall be given appropriate weight and/or credit for their career 20 development.

Sec. 14. Corps of National Defense Specialists. - The DND Proper shall establish

a Corps of National Defense Specialists that constitute the supervising specialists to senior officials of the DND Proper, occupying positions from Salary Grade (SG) 18 to 30. The DND shall provide the appropriate learning and development (L&D) interventions to mold them into well-rounded defense professionals and ensure their responsiveness to current, emerging, and future requirements of the defense establishment, foreign and domestic. The L&D interventions shall include an immersion program to strengthen the Corps of National Defense Specialists' conceptual and practical understanding of defense management and innovation. The Corps shall be familiarized with the various aspects of the DND's operations through functional rotation among the DND Proper's

1 offices and attached bureaus and relevant government agencies with the goal of 2 acquiring best management practices.

Sec. 15. Continuing Education of the DND and its Attached Bureaus. - All

4 officials and employees of the DND and its attached bureaus may avail of opportunities 5 for local or foreign scholarships and other training and research grants, including 6 participation in seminars, conventions, and conferences, to enhance and upgrade their professional and technical knowledge, skills, and competencies. The DND may enter into arrangements with leading learning institutions for the 9 conduct of such education, training, and research programs, as may be deemed necessary, to keep it abreast with current and emerging trends on defense and security. This shall also include the sending or exchange of subject matter experts (SMEs) to other government agencies, foreign governments and/or institutions to enhance the learning of the DND personnel through a more practical, real-world 14 approach. The DND shall likewise be empowered to enter into research and development initiatives in collaboration with appropriate government agencies, non-government organizations, and the academe, which shall have the highest national security classification: Provide, That the intellectual property rights of such shall redound to 19 the Republic of the Philippines. Personnel of the DND and its attached bureaus participating in education, training, and research programs shall be entitled to emoluments and allowances, subject to existing laws, rules, and regulations.

Sec. 16. Magna Carta. - The employees and officials of the DND Proper and

the DND attached agencies shall be covered by appropriate laws, which provide magna carta for qualified personnel in the government.

Sec. 17. Hazard Pay. - All employees and officials of the DND Proper and DND

attached agencies who are exposed to high risks or perils to life in the performance of their duties and responsibilities, shall be compensated with hazard pay based on conditions set by the Secretary of National Defense or other relevant agencies.

ARTICLE IV RESOURCE MANAGEMENT

Sec. 18. Defense Budget. - Within five (5) years after the effectivity of this Act,

the total annual budget of the DND shall be progressively increased to at least two 5 percent (2%) of the Gross Domestic Product (GDP) using the year preceding the 6 implementation of this Act as the base year, and adjusted every ten (10) years thereafter.

Sec. 19. Acquisition, Service Infrastructure, and Maintenance Contracts. - The

DND shall be authorized to forge defense partnerships with strategically aligned countries and ensure the continuity of the defense supply chain, including entering 11 into long-term, multi-year contracts outside the ambit of Republic Act No. 12009, otherwise known as the "New Government Procurement Act." These shall enable the DND to acquire supply chains, co-develop secure technologies, and support the acquisition, development, maintenance, and disposal of all defense assets: Provided, That the entities to which it shall contract with have been duly vetted as technically and financially capable to provide the DND's needs without compromising national security.

Sec. 20. Management and Control of Defense Real Properties. - The DND

19 Proper shall administer, operate, manage, control, maintain, and develop defense real properties for strategic basing and shall use, hold, acquire, or lease any private real property, right of way, or easement, which may be proper or necessary for the accomplishment of its mandate as provided in this Act. The power to manage and control defense real properties includes, but is not limited to, the following: a) Prohibit the sale and/or exchange of strategic defense real properties unless otherwise recommended by the Secretary and approved by the President of the Philippines; b) Authorize the lease and/or development of defense real properties, by joint venture or otherwise, through the recommendation of the Secretary and approval of the President of the Philippines; and c) Transfer of non-strategic defense real properties, as determined by the Secretary.

Any and all income derived from the lease or disposition of such defense real 2 properties shall be remitted only to the special purpose trust funds to be determined 3 by the Secretary. The trust funds shall be used strictly for the intended purposes and shall not be commingled with other funds, and disbursed in accordance with existing 5 laws, rules, and regulations.

Sec. 21. Grants and Donations. - The DND Proper may accept donations,

7 contributions, and grants from various local or foreign sources, for purposes relevant to its mandate and functions or intended for its bureaus and agencies: Provided, That 9 acceptance thereof shall be subject to compliance with existing laws, rules, and regulations. ARTICLE V SERVICE CONTINUITY

Sec. 22. Responsive Service Delivery and Resiliency. - The DND Proper shall

ensure the provision of resources necessary for organizational productivity, responsive service delivery, and service continuity to include, among others: a) Modern and responsive work productivity tools and platforms; b) Automation, integration, and digitalization toward streamlined systems and processes; Secure, smart, sustainable, and resilient infrastructure; Presence in strategic locations to facilitate joint efforts among the DND Proper and its bureaus and ensure service continuity; and e) Progressive human resource guidelines designed to enhance the adaptability, competitiveness, and well-being of the DND's human resources. The DND Proper shall develop an organizational service continuity plan to ensure uninterrupted service delivery, subject to periodic review and updating as frequently as necessary or at least every three (3) years. The DND Proper shall likewise craft an infrastructure master plan and design considering timeline and appropriate features to ensure a conducive work environment in collaboration with the Department of Budget and Management (DBM) and other departments.

ARTICLE VI FINAL PROVISIONS

Sec. 23. Security Consciousness and Protection of Sensitive Information. - To

protect national interests and security, the DND shall strictly observe the highest standards of personnel, document, and information security at all times through the implementation of stringent measures such as, but not limited to: a) Review and updating of existing protocols, manuals, and guidelines on handling physical and digital documents and sensitive information and strict implementation thereof; b) Assignment of the appropriate security clearance to every personnel upon entry into the DND and its regular review thereafter; and c) Utilization of state-of-the-art security systems and/or technologies in all defense establishments and infrastructure.

Sec. 24. Appropriations. - The amount necessary to implement the provisions

of this Act shall be included in the annual General Appropriations Act under the DND.

Sec. 25. Transitory Provisions. - The DND Proper shall undertake a

comprehensive review of its Organizational Structure and Staffing Pattern (OSSP) with the purpose of professionalizing, providing career path, and implementing a competency-based system of human resource development. Within six (6) months from the effectivity of this Act, the Department shall submit to the DBM its proposal and such other requirements for the strengthening and modernization of the DND Proper. Within one hundred and twenty (120) days from the approval of this Act, the Secretaries of National Defense, Finance, Budget and Management, Trade and Industry, and the Director-General of the National Economic and Development Authority shall jointly promulgate the rules and regulations to facilitate the importation and exportation of defense articles compliant with international conventions on the sale, transfer, trade of such articles, and the applicability of tax laws, if necessary.

Sec. 26. Implementing Rules and Regulations. - Within one hundred and

twenty days (120) days from the effectivity of this Act, the DND shall formulate the rules and regulations necessary to effectively implement the provisions of this Act.

Sec. 27. Separability Clause. - If any provision of this Act is declared

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

Sec. 28 Repealing Clause. - All laws, decrees, executive orders, rules and

5 regulations and other issuances or parts thereof which are contrary or inconsistent with this Act are hereby repealed, amended or modified accordingly.

Sec. 29. Effectivity. - This Act shall take effect after fifteen (15) days following

its publication in the Official Gazette or in any two (2) newspapers of general 9 circulation. Approved,