AMENDED BY-LAWS
OF
PHILIPPINE PORTS AUTHORITY EMPLOYEES DEVELOPMENT COOPERATIVE (PPAEDCO)

 

KNOW ALL MEN BY THESE PRESENTS:

We, the undersigned Filipino citizens, all of legal age, and residents of the Philippines, representing at least majority of the members of the Philippine Ports Authority Employees Development Cooperative (PPAEDCO), a primary non-agricultural multi-purpose cooperative, do hereby adopt the following code of By-laws.
 

ARTICLE I
Purposes and Goals

Section 1. Objectives. The purposes and goals of this Cooperative are those set forth in its Articles of
                 Cooperation.

ARTICLE II
Membership

ARTICLE III
Administration

ARTICLE IV
Board of Directors

Section 1. Composition of the Board of Directors (BOD). The Board of Directors shall be composed of Seven (7) members.

Section 2. Functions and Responsibilities. The Board of Directors shall have the following functions and responsibilities:

        a. Provide general policy direction;

        b. Formulate the strategic development plan;

        c. Determine and prescribe the organizational and operational structure;

        d. Review the Annual Plan and Budget and recommend for the approval of the GA;

        e. Establish policies and procedures for the effective operation and ensure proper implementation of such;

        f. Evaluate the capability and qualification and recommend to the GA the engagement of the
           services of the External Auditor;

        g. Appoint the members of the Mediation/Conciliation and Ethics Committees and other Officers
            as specified in the Code and Cooperative By-laws;

        h. Declare the members entitled to vote;

        i. Decide election related cases involving the Election Committee and its members;

        j. Act on the recommendation of the Ethics Committee on cases involving violations of Code of
           Governance and Ethical Standards; and

        k. Perform such other functions as may be prescribed in the By-laws or authorized by the GA;

Section 3. Qualifications. No member shall be elected or continue to be a member of the Board of Directors unless he has the following qualifications:

        a. Entitled to vote;

        b. Paid the minimum capital requirement;

        c. Continuously patronized the Cooperative services;

        d. In good standing for the last two (2) years;

        e. Completed or willing to complete the required education and training as may be provided by
            law, rules and regulations; and

        f. Of good moral character and other qualifications prescribed in the IRR of the Authority.

Section 4. Disqualifications. Any member who is under any of the following circumstances shall be disqualified to be elected as a member of the Board of Directors or any committee, or to continue as such:

        a. Holding any elective position in the government, except that of a party list representative or being an officer
            of a cooperative he or she represents;

        b. Having served as Director of the Cooperative for three (3) consecutive terms;

        c. The members of the Board of Directors shall not hold any other position directly involved in the day-to-day
            operation and management of the Cooperative.

        d. Having direct or indirect personal interest with the business of the Cooperative;

        e. Having been absent for three (3) consecutive regular meetings without reasonable cause;

        f. Being an official or employee of the Cooperative Development Authority;

        g. Having been convicted in administrative proceedings or civil/criminal suits involving financial and/or
            property accountability;

        h. Being an official of other Cooperative within the area of its operation; or

        i. Having been disqualified by law.

Section 5. Election of Directors. The members of the Board of Directors shall be elected by secret ballot by members entitled to vote during the annual regular General Assembly meeting or special General Assembly meeting called for the purpose. Unless earlier removed for cause, or have resigned or become incapacitated, they shall hold office for a term of two (2) years, provided no Director shall serve for more than three (3) consecutive terms.

Section 6. Election of Officers within the Board. The Board of Directors shall convene within ten (10) days after the regular General Assembly meeting to elect by secret ballot from among themselves the Chairperson and the Vice Chairperson, and to appoint the Secretary and Treasurer from outside of the Board. The appointed officers shall hold office for a term of one (1) year or until their successors shall have been appointed and actually assumed the functions of their positions.

For committees elected by the General Assembly and/or appointed by the BOD, procedural process of electing the Chairperson, Vice Chairperson or other positions among themselves should be in accordance with the process mentioned above.

Section 7. Meeting of the Directors. The regular meeting of the Board of Directors shall be held at least once a month. However, the Chairperson or majority of the directors may at any time call a special Board meeting to consider urgent matters. The call shall be addressed and delivered to the Secretary stating the date, time and place of such meeting and the matters to be considered. Notice of regular or special meetings of the Board of Directors, unless dispensed with, shall be served by the Secretary in writing to each director at least three (3) days before such meeting.

Majority of the total number of Directors constitutes a quorum to transact business. Any decision or action taken by the majority members of the Board of Directors in a meeting duly assembled shall be a valid cooperative act.

Section 8. Vacancies. Any vacancy occuring in the Board of Directors by reason of death, incapacity, removal or resignation may be filled by a majority vote of the remaining directors, if still constituting a quorum; otherwise, such vacancy shall be filled by the General Assembly in a regular or special meeting called for the purpose. The elected Director shall serve for the unexpired term of his predecessor in office.

In the event that the General Assembly failed to muster a quorum to fill the positions vacated by Directors whose term have expired and said Directors refuse to continue their functions on hold-over capacity, the remaining members of the Board together with the members of the Audit Committee shall designate, from the qualified regular members of the General Assembly, their replacements who shall serve as such until their successor shall have been elected and qualified in a regular or special General Assembly meeting called for the purpose.

If a vacancy occurs in any elective committee, it shall be filled by the remaining members of the said committee, if still constituting a quorum, otherwise, the Board, in its discretion, may appoint or hold a special election to fill such vacancy.

Section 9. Removal of Directors and Committee Members. All complaints for the removal of any elected officer shall be filed with the Board of Directors and such officer shall be given the opportunity to be heard. Majority of the Board of Directors may place the officer concerned under preventive suspension pending the resolution of the investigation. Upon finding of a prima facie evidence of guilt, the Board shall present its recommendation for removal to the General Assembly. An elective officer may be removed by three-fourths (3/4) vote of the regular members present and constituting a quorum, in a regular or special General Assembly meeting called for the purpose. The officer concerned shall be given the opportunity to be heard at said assembly.

In cases where the officers sought to be removed consist of the majority of the BOD at least ten percent (10%) of the members with voting rights may file a petition with the CDA upon failure of the Board to call an assembly meeting to commence the proceeding for their removal. The decision of the General Assembly on the matter is final and executory.

An officer elected or appointed by the Board of Directors or any committee may be removed from office for cause by a majority vote of all the members of the Board or Committee as the case may be.

Section 10. Powers and Duties of the Board. The Board of Directors shall be responsible for the strategic planning, direction setting and policy-formulating activities of the Cooperative. Provided further that any member of the Board shall not hold any other position directly involved in the day-to-day operation and management of the Cooperative.

ARTICLE V
Committees

Section 1. Audit Committee. An Audit Committee is hereby created and shall be composed of three (3) members to be elected during a General Assembly meeting and shall hold office for a term of one (1) year or until their successors shall have been elected and qualified. Within ten (10) days after their election, they shall elect from among themselves a Chairperson, Vice Chairperson and a Secretary. No member of the committee shall hold any other position within the Cooperative during his term of office. The Committee shall provide internal audit service, maintain a complete record of its examination and inventory, and submit an audited financial report quarterly or as may be required by the Board and the General Assembly.

The Audit Committee shall be directly accountable and responsible to the General Assembly. It shall have the power and duty to continuously monitor the adequacy and effectiveness of the Cooperative's management control system and audit the performance of the Cooperative and its various responsibility centers.

Section 2. Functions and Responsibilities. The Audit Committee shall:
        a. Monitor the adequacy and effectiveness of the Cooperative’s management and control system;

        b. Audit the performance of the Cooperative and its various responsibility centers;

        c. Review continuously and periodically the books of account and other financial records to ensure that these
           are in accordance with the cooperative principles and generally accepted accounting procedures;

        d. Submit reports on the results of the internal audit and recommend necessary changes on
            policies and other related matters on operation to the Board of Directors and GA;

        e. Recommend or petition to the Board of Directors the conduct of special general assembly
            when necessary; and

        f. Perform such other functions as may be prescribed in the By-laws or authorized by the GA.

Section 3. Credit Committee. The Credit Committee is hereby created and shall be composed of three (3) members to be elected during a General Assembly meeting and shall hold office for a term of one (1) year or until their successors shall have been elected and qualified. Within ten (10) days after their election, they shall elect from among themselves a Chairperson, Vice Chairperson and a Secretary. No member of the committee shall hold any other position within the Cooperative during his term of office.

Section 4. Functions and Responsibilities. The Credit Committee shall be responsible for the credit management of the Cooperative. In the performance of its functions, it shall:

Section 11. Ethics Committee. An Ethics Committee is hereby created and shall be composed of three (3) members to be appointed by the Board of Directors. Within ten (10) days after their appointment, they shall elect from among themselves a Chairperson, Vice Chairperson and a Secretary who shall serve for a term of one (1) year or until their successors shall have been appointed and qualified. No member of the Committee shall hold any other position in the Cooperative during his term of office. The powers, function, duties and responsibilities of the member shall be in accordance with the implementing rules and regulations promulgated by the Cooperative Development Authority.

Section 12. Functions and Responsibilities. The Ethics Committee shall:

        a. Develop Code of Governance and Ethical Standard to be observed by the members, officers
            and employees of the Cooperative subject to the approval of the BOD and ratification of the
            GA;

        b. Disseminate, promote and implement the approved Code of Governance and Ethical
            Standards;

        c. Monitor compliance with the Code of Governance and Ethical Standards and recommend to
            the BOD measures to address the gap, if any;

        d. Conduct initial investigation or inquiry upon receipt of a complaint involving Code of
            Governance and Ethical Standards and submit report to the BOD together with the
            appropriate sanctions;

        e. Recommend ethical rules and policy to the BOD;

        f. Perform such other functions as may be prescribed in the By-laws or authorized by the GA.

Section 13. Other Committees. By a majority vote of all its members, the Board of Directors may form such other committees as may be deemed necessary for the smooth operation of the Cooperative.
 

ARTICLE VI
Officers and Management Staff
of the Cooperative

Section 1. Officers and their Duties. The officers of the Cooperative shall include the members of the different committees created by the General Assembly, general manager or chief executive officers, secretary, treasurer and members holding other positions as may be provided for in this By-laws and shall serve according to the functions of their respective offices as follows:

   a. Chairperson – The Chairperson shall:

        i. Set the agenda for board meetings in coordination with the other members of the BOD;

        ii. Preside over all meetings of the Board of Directors and of the GA;

        iii. Sign contracts, agreements, certificates and other documents on behalf of the Cooperative as authorized by
            the BOD or by the GA;

        iv. Issue Certificate of Non-Affiliation with the Federation or Union; and

        v. Perform such other functions as may be authorized by the BOD or by the GA.

   b. Vice Chairperson – The Vice Chairperson shall:

        i. Perform all the duties and responsibilities of the Chairperson in the absence of the latter;

        ii. Act as ex-officio chairperson of the Education and Training Committee; and

        iii. Perform such other duties as may be delegated by the BOD.

   c. Treasurer – The Treasurer shall:

        i. Ensure that all cash collections are deposited in accordance with the policies set by the BOD;

        ii. Have custody of all funds, securities, and documentations relating to all assets, liabilities, income and
            expenditures;

        iii. Monitor and review the financial management operations of the cooperative, subject to such
             limitations and control as may be prescribed by BOD;

        iv. Maintain full and complete records of cash transactions;

        v. Maintain a Petty Cash Fund and Daily Cash Position Report; and

        vi. Perform such other functions as may be prescribed in this By-laws.

   d. Secretary – The Secretary shall:

        i. Keep an updated and complete registry of all members’ record, prepare and maintain records of all minutes
           of all meetings of the BOD and the GA;

        ii. Ensure that necessary BOD actions and decisions are transmitted to the management for
            compliance and implementation;

        iii. Issue and certify the list of members who are in good standing and entitled to vote as
             determined by the BOD;

        iv. Prepare and issue Share Certificates;

        v. Serve notice of all meetings called and certify the presence of quorum of all meetings of the BOD and GA;

        vi. Keep copy of the Treasurer’s report and other reports;

        vii. Keep and maintain the Share and Transfer Book;

        viii. Serve as custodian of the Cooperative seal; and

        ix. Perform such other functions as may be prescribed in the By-laws or authorized by the GA.

   e. General Manager. The General Manager shall:

        i. Oversee the overall day to day business operations of the Cooperative by providing general direction,
           supervision, management and administrative control over all the operating departments subject to such
           limitations as may be set forth by the BOD or the GA;

        ii. Formulate and recommend in coordination with the operating departments under his/her supervision, the
           Cooperative’s Annual and Medium Term Development Plan, Programs and Projects, for approval of the BOD,
           and ratification of GA;

        iii. Implement the duly approved plans and programs of the Cooperative and any other directive or instruction
             of the BOD;

        iv. Provide and submit to the BOD monthly reports on the status of the Cooperative’s operation vis-a-vis its
             target and recommend appropriate policy or operational changes, if necessary;

        v. Represent the cooperative in any agreement, contract, business dealings, and in any other
            official business transaction as may be authorized by the BOD;

        vi. Ensure compliance with all administrative and other requirements of regulatory bodies; and

        vii. Perform such other functions as may be prescribed in the By-laws or authorized by the GA.

Section 2. Liabilities of Directors, Officers and Committee Members. Directors, officers and committee members, who willfully and knowingly vote for or assent to patently unlawful acts, or who are guilty of gross negligence or bad faith in directing the affairs of the Cooperative or acquire any personal or pecuniary interest in conflict with their duties as Directors, officers or committee members shall be liable jointly and severally for all damages resulting there from to the Cooperative, members and other persons.

When a director, officer or committee member attempts to acquire, or acquires in violation of his duties, any interest or equity adverse to the Cooperative in respect to any matter which has been reposed in him in confidence, he shall, as a trustee for the Cooperative, be liable for damages or loss of profits which otherwise would have accrued to the Cooperative.

Section 3. Management Staff. The Board of Directors shall appoint, fix their compensation and prescribe for the functions and responsibilities of the Management Staff not provided hereof.

Section 4. The General Manager. No person shall be appointed to the position of General Manager unless he/she possesses the following qualifications and none of the disqualifications herein enumerated:

        a. Must be familiar with the business operation of the Cooperative;

        b. Must have at least two (2) years experience in the operations of Cooperative or related business;

        c. Must not be engaged directly or indirectly in any activity similar to the business of the Cooperative;

        d. Must not have been convicted of any administrative, civil or criminal cases involving moral turpitude, gross
            negligence or grave misconduct in the performance of his duties;

        e. Must not be addicted to any form of gambling or immoral or vicious habits;

        f. Must have no pending administrative, civil or criminal case involving financial and/or property
           accountabilities at the time of his appointment; and

        g. Must undergo pre-service and/or in-service trainings.

Section 5. Duties of the General Manager. The General Manager shall:

        a. Over all in-charge of all the phases of the business operations of the Cooperative, subject to the policies
           and guidelines set by the BOD and the GA.

        b. Responsible in maintaining records and accounts of the Cooperative in such manner that the true condition
            of its business may be ascertained there from at any time.

        c. Render reports monthly, annually or as may be required by the BOD or the GA, and preserve the books,
           documents, correspondence and records of whatever nature concerning the operations of the Cooperative            which may come into his possession;

        d. Subject to the policies set by the BOD, employ, supervise and/or dismiss any agent or employee in the
            management staff; and

        e. Perform such other duties as the BOD may prescribe and turn over to his successor all properties
            belonging to the Cooperative in his possession or over which he has control upon the expiration/termination
            of his services.

Section 6. Duties of the Accountant. The Accountant of the Cooperative, who shall be under supervision and control of the General Manager shall:

        a. Install an adequate and effective accounting system within the Cooperative;

        b. Render reports on the financial condition and operations of the Cooperative monthly, annually or as may be
            required by the BOD and/or the GA;

        c. Provide assistance to the BOD in the preparation of annual budget;

        d. Keep, maintain and preserve all books of accounts, documents, vouchers, contracts and other
            records concerning the business of the Cooperative and make them available for auditing
            purposes to the Chairman of the Audit Committee; and

        e. Perform such other duties as the Board of Directors may require.

Section 7. Duties of the Bookkeeper. The bookkeeper of the Cooperative who is under supervision and control of the Accountant shall:

        a. Record and update books of accounts;

        b. Provide assistance in the preparation of reports on the financial condition and operations of
            the Cooperative monthly, annually or as may be required by the BOD and/or the GA;

        c. Keep, maintain and preserve all books of accounts, documents, vouchers, contracts and other
           records concerning the business of the Cooperative and make them available for auditing
           purposes to the Chairman of the Audit Committee; and

        d. Perform such other duties as the Board of Directors may require.

Section 8. Qualifications of Accountant and Bookkeeper. No person shall be appointed to the position of accountant and bookkeeper unless they possess the following qualifications and none of the disqualifications herein enumerated:
 

         a. Bachelor’s degree in accountancy must be required for Accountant however Bookkeeper must be
            knowledgeable in accounting and bookkeeping;

         b. Must have at least two (2) years experience in Cooperative or related business;

         c. Must not be engaged directly or indirectly in any activity similar to the business of the Cooperative;

         d. Must not be convicted of any administrative, civil or criminal case involving moral turpitude, gross
             negligence or grave misconduct in the performance of his duties;

         e. Must not be addicted to any form of gambling or immoral or vicious habits;

         f. Must be willing to undergo pre-service and/or in-service trainings in accounting; and

        g. Must have no pending administrative, civil or criminal case involving financial and/or property
            accountabilities at the time of his appointment.

Section 9. Compensation. Subject to the approval of the General Assembly, the members of the Board and committees may, in addition to per diems for actual attendance to board and committee meetings, and reimbursement of actual and necessary expenses while performing functions in behalf of the Cooperative, be given regular compensation; Provided further, that the directors and officers shall not be entitled to any per diem when, if in the preceding calendar year, the Cooperative reported a net loss or had a dividend rate less than the official inflation rate for the same year.
 

ARTICLE VII
Capital Structure

ARTICLE VIII
Operations

Section 1. Primary Consideration. Adhering to the principle of service over and above profit, the Cooperative shall endeavor to:

    a. Engage in:
        1. Savings and lending services among its members;

        2. Procurement and distribution of commodities to members and non-members; and

        3. Other services that may be necessary for the attainment of the purposes and objectives of
            the Cooperative.

    b. Formulate and implement program strategies that will provide its members and the
        communities within its area of operation needed goods/services;

    c. Adopt and implement plans and programs which ensures the continued build-up of the
        Cooperative’s capital structure with the end view of establishing other needed services for the
        members and the public;

    d. Formulate and implement studies and/or programs that will address the needs of members.

ARTICLE IX
Allocation and Distribution of Net Surplus

Section 1. Allocation. At the end of its fiscal year, the Cooperative shall distribute its net surplus as follows:

1. Reserve Fund. Ten percent (10%) shall be set aside for reserve fund.

       a. The reserve fund shall be used for the stability of the Cooperative and to meet new losses in its operations.
           The GA may decrease the amount allocated to the reserve fund when it has already exceeded the share
           capital.

           Any sum recovered on items previously charged to the reserve fund shall be credited to such fund.

        b. The reserve fund shall not be utilized for investment, other than those allowed in the Cooperative Code.
            Such sum of the reserve fund in excess of the authorized share capital may be used at any time for any
            project that would expand the operations of the Cooperative upon the resolution of the GA.

         c. Upon the dissolution of the Cooperative, the reserve fund shall not be distributed among the members. The
            General Assembly may resolve:

            1. To establish usufructuary fund for the benefit of any federation or union to which the Cooperative is
                affiliated; and

            2. To donate, contribute or otherwise dispose of the amount for the benefit of the community where the
                Cooperative operates. If the members cannot decide upon the disposal of the Reserve Fund, the same
                shall go to the federation or union to which the Cooperative is affiliated.

2. Education and Training Fund. Four percent (4%) for Education and Training Fund.

        a. Half of the amounts transferred to the Education and Training Fund annually under this subsection may be
           spent by the Cooperative for education and training and other purposes; While the other half shall be
           credited to the Cooperative education and training fund of the above-mentioned apex organization.

        b. Upon the dissolution of the Cooperative, the unexpended balance of the education and training fund
            appertaining to the Cooperative shall be credited to the Cooperative education and training fund of the
            above mentioned apex organization.

3. Community Development Fund. Three percent (3%) shall be used for projects and activities that will benefit the community where the Cooperative operates.

4. Optional Fund. Three percent (3%) shall be set aside for Optional Fund for land and building, and any other necessary fund.

5. The remaining net surplus shall be made available to the members in the form of the interest on share capital not to exceed the normal rate of the return on investments prescribed by CDA and patronage refunds.

The sum allocated for patronage refunds shall be made available at the same rate to all patrons of the Cooperative in proportion to their individual patronage, provided,

        a. In the case of the member patron with paid-up share capital distribution, his proportionate amount of
           patronage refund shall be paid to him unless he agrees to credit the amount to his account as additional
           share capital contribution;

        b. In the case of the member patron with unpaid share capital distribution, his proportionate amount of
            patronage fund shall be credited to his account until his share capital contribution has been fully paid;

        c. In the case of a non-member patron, his proportionate amount of the patronage refund shall be set aside in
            a general fund for such patrons and shall be allocated to individual non-member patrons only upon request
            and presentation of evidence of the amount of its patronage. The amount so allocated shall be credited to
            such person towards payment of the minimum capital contribution for membership. When the sum equal to
            this amount has accumulated anytime within a period of two (2) years, such
            patron shall be deemed and become a member of the Cooperative if he so agrees or requests or complies
            with the provisions of these By-laws for admission to membership.

        d. If within the period of time specified in these by-laws, any subscriber who has not fully paid his subscribed
            share capital or any non-member patron who has accumulated the sum necessary for membership but who
            does not request nor agree to become a member fails to comply with these provisions of the By-laws for
            admission to membership, the amount so accumulated or credited to their account together with any part of
            the general fund for non-member patrons shall be credited to the reserve fund or to the education and
            training fund of the Cooperative, at the option of the General Assembly.


 

ARTICLE X
Settlement of Disputes

Section 1. Mediation and Conciliation. All inter and intra-cooperative disputes shall be settled within the Cooperative in accordance with the pertinent Guidelines issued by the Cooperative Development Authority.

Section 2. Disputes Involving Members of the Mediation and Conciliation Committee and Board of Directors. If one of the parties to a controversy is a member of the Mediation and Conciliation Committee, the chairman shall endorse the case to the Board of Directors who shall resolve the case following the procedures prescribed in the proceeding section.

If one or both parties are members of the Board of Directors and the Mediation and Conciliation Committee, the Chairman of the Committee shall communicate in writing such fact to the Chairman of the Board of Directors who shall forthwith call a special board meeting to form a five (5)-man Special Conciliation Committee, consisting of the heads of Audit and Election Committees, the Secretary and one representative of each party. The special conciliation committee shall convene immediately and after electing from among themselves the Chairman, Vice-Chairman and the Secretary, proceed to resolve the case in accordance with the procedures prescribed in the preceding section. The committee shall automatically cease to exist upon the final resolution of the controversy.

ARTICLE XI
Miscellaneous

Section 1. Investment of Capital. The Cooperative may invest its capital in any or all of the following:
 

        a. Shares or debentures or securities of any other cooperative;

        b. Any reputable bank in the locality or any cooperative and cooperative banks;

        c. Securities issued or guaranteed by Government;

        d. Real Estate primarily for the use of the Cooperative or its members; or

        e. In any other manner approved by the General Assembly.

Section 2. Accounting System. The Cooperative shall keep, maintain and preserve all its books of accounts and other financial records in accordance with generally accepted accounting principles and practices, applied consistently from year to year, and subject to existing laws, rules and regulations.

Section 3. External Audit. At least once a year, the Board of Directors shall in consultation with the Audit Committee, cause the audit of the books of accounts of the Cooperative by CDA accredited independent Certified Public Accountant.

Section 4. Annual Report. During the annual regular assembly meeting, the Cooperative shall submit a report of its operation to the GA together with the audited financial statements. The annual report shall be certified by the Chairperson and Manager of the Cooperative as true and correct in all aspects to the best of their knowledge. The audited financial statements shall be certified by CDA accredited independent Certified Public Accountant.

The Cooperative shall submit the following reports to the Authority within (120) days from the end of every calendar year:

       a. Cooperative Annual Performance Report (CAPR);

       b. Social Audit Report;

       c. Performance Report;

       d. Audited Financial Statement duly stamped “Received” by BIR;

       e. List of officers and trainings undertaken/completed.

ARTICLE XII
Amendments