9/22/2018 Philippines: NCIP Administrative Order No. 03, Series of 2012, The Revised Guidelines on Free and Prior Informed Consent (FPIC) … Section 62. Use of Royalty. The royalties must be used for programs and projects that will redound to the well-being and benefit of the ICCs/IPs entitled to it. It should have allocations for: Emergency concerns; Investments which may be short, medium or long term; Livelihood and social development projects which must be allocated not less than 30% of each and every release; Education and training of members, basic or professional; Capitalization for cooperative development; Credit facility; Salaries or wages of persons engaged to perform professional services; Mutual assistance, and the like. It must never be used as payment for damages caused by the proponent/company’s activities to the person and properties of an individual member, as this is a distinct obligation of the company and not part of royalties Section 63. Transparency Mechanism. The IPO shall prepare periodic financial reports, and annual financial statements duly audited, and furnish copies of the same to the NCIP. The same must also be reported to the general membership during the annual assembly that must be convened to tackle financial and other community or IPO concerns. Section 64. Monitoring and Visitorial Powers. In the exercise of its mandate to protect the well-being and promote the rights of ICCs/IPs, the NCIP may direct financial and management audits of IPOs managing royalties and other benefits or exercise its visitorial powers as provided for by law. 22 PART IX PROHIBITED ACTS AND REMEDIES http://www.wipo.int/wipolex/en/text.jsp?file_id=414691 30/37

Select target paragraph3