Section 1. Sections 3, 11, 14, 17, 19, 20, 22, 26 and 30 of the said Decree are amended as follows:

"SEC. 3. Definitions. —

"a) Public forest is the mass of lands of the public domain which has not been subject to the present system of classification for the determination of which lands are needed for forest purposes and which are not.

"b) Permanent forest or forest reserves refers to those lands of the public domain which have been the subject of the present system of classification and declared as not needed for forest purposes.

"c) Alienable or disposable lands refer to those lands of the public domain which have been the subject of the present system of classification and declared as not needed for forest purposes.

"d) Forest lands includes the public forest, the permanent forest or forest reserves, and forest reservations.

"e) Grazing land refers to that portion of the public domain which has been set aside, in view of the suitability of its topography and vegetation, for the raising of livestock.

"f) Mineral lands refer to those lands of the public domain which have been classified as such by the Secretary of Natural Resources in accordance with prescribed and approved criteria, guidelines and procedure.

"g) Forest reservations refer to forest lands which have been reserved by the President of the Philippines for any specific purpose or purposes.

"h) National park refers to a forest land reservation essentially of primitive or wilderness character which has been withdrawn from settlement or occupancy and set aside as such exclusively to preserve the scenery, the natural and historic objects and the wild animals or plants therein, and to provide enjoyment of these features in such a manner as will leave them unimpaired for future generations.

"i) Game refuge or bird sanctuary refers to a forest land designated for the protection of game animals, birds and fish and closed to hunting and fishing in order that the excess population may flow and restock surrounding areas.

"j) Marine park refers to any public offshore are delimited as habitat of rare and unique species of marine flora and fauna.

"k) Seashore park refers to any public shore area delimited for outdoor recreation, sports fishing, water skiing and related healthful activities.

"l) Watershed reservation is a forest land reservation established to protect or improve the conditions of the water yield thereof or reduce sedimentation.

"m) Watershed is a land area drained by a stream or fixed body of water and its tributaries having a common outlet for surface run-off.

"n) Critical watershed is a drainage area of a river system supporting existing and proposed hydro-electric power, irrigation works or domestic water facilities needing immediate protection or rehabilitation.

"o) Mangrove is a term implied to the type of forest occurring on tidal flat along the sea coast, extending along stream where the water is brackish.

"p) Kaingin refers to a portion of the forest land which is subjected to shifting and/or permanent slash-and-burn cultivation.

"q) Forest product means timber, pulpwood, firewood, bark, tree top, resin, gum, wood, oil, honey, beeswax, nipa, rattan, or other forest growth such as grass, shrub, and flowering plant, the associated water, fish, game, scenic, historical, recreational and geologic resources in forest lands.

"r) Dipterocarp forest is a forest dominated by trees of the dipterocarp species, such as red lauan, tanguile, tiaong, white lauan, almon, bagtikan and mayapis of the Philippine mahogany group, apitong and the yakals.

"s) Pine forest is a forest type predominantly of pine trees.

"t) Industrial tree plantation refers to any forest land extensively planted to tree crops primarily to supply raw material requirements of existing or proposed wood processing plants and related industries.

"u) Tree farm refers to any small forest land or tract of land purposely planted to tree crops.

"v) Agro-forestry is a sustainable management for land which increases overall production, combines agricultural crops, tree crops and forest plants and/or animals simultaneously or sequentially, and applies management practices which are compatible with the cultural patterns of the local population.

"w) Multiple-use is the harmonized utilization of the land, soil, water, wildlife, recreation value, grass and timber of forest lands.

"x) Selective logging is the systematic removal of the mature, over-mature and defective trees in such manner as to leave adequate number and volume of healthy residual trees of the desired species necessary to assure a future crop of timber, and forest cover for the protection and conservation of soil, water and wildlife.

"y) Seed tree system is a silvicultural system characterized by partial clearcutting leaving seed-trees to regenerate the area.

"z) Healthy residual refers to a sound or slightly injured tree of the commercial species left after logging.

"aa) Sustained-yield management implies continuous or periodic production of forest products in a working unit for the purpose of achieving at the earliest practicable time an approximate balance between growth and harvest or use. This is generally applied to the commercial timber resources and is also applicable to the water, grass, wildlife, and other renewable resources of the forest.

"bb) Processing plant is any mechanical setup, device, machine or combination of machines used for the conversion of logs and other forest raw materials into lumber, veneer, plywood, fiberboard, blockboard, paper board, pulp, paper or other finished wood products.

"cc) Lease is a privilege granted by the State to a person to occupy and possess, in consideration of specified rental, any forest land of the public domain in order to undertake any authorized activity therein.

"dd) License is a privilege granted by the State to a person to utilize forest resources within any forest land, without any right of occupation and possession over the same, to the exclusion of others, or establish and operate a wood-processing plant, or conduct any activity involving the utilization of any forest resources.

"ee) License agreement is a privilege granted by the State to a person to utilize forest resources within any forest land with the right of possession and occupation thereof to the exclusion of others, except the government, but with the corresponding obligation to develop, protect and rehabilitate the same in accordance with the terms and conditions set forth in said agreement.

"ff) Permit is a short-term privilege or authority granted by the State to a person to utilize any limited forest resources or undertake a limited activity within any forest land without any right of occupation and possession therein.

"gg) Annual allowable cut is the volume of materials, whether of wood or other forest products, that is authorized to be cut yearly from a forest.

"hh) Cutting cycle is the number of years between two major harvests in the same working unit and/or region.

"ii) Forest ecosystem refers to the living and non-living components of a forest and their interaction.

"jj) Silviculture is the establishment, development, reproduction and care of forest trees.

"kk) Rationalization is the organization of a business or industry using management principles, systems and procedures to attain stability, efficiency and profitability of operation.

"ll) Forest officer means any official or employee of the Bureau who has been appointed or delegated by law or by competent authority to execute, implement or enforce the provisions of this Code, other related laws, as well as their implementing regulations.

"mm) Private right means or refers to titled rights of ownership under existing laws, and in the case of national minority to rights of possession existing at the time a license is granted under this Code, which possession may include places of abode and worship, burial grounds, and old clearings, but exclude productive forest inclusive of logged-over areas, commercial forests and established plantations of forest trees and trees of economic values.

"nn) Person includes natural as well as juridical person."

"SEC. 11. Manpower and policy development. — The Bureau shall establish and operate an in-service training center for the purpose of upgrading and training its personnel and new employees.

"The Bureau shall also set aside adequate funds to enable personnel to obtain specialized education and training in local or foreign colleges or institutions.

"There shall be established in the College of Forestry, University of the Philippines at Los Baños, in coordination with the Department of Natural Resources and the wood industry, a Forestry Development Center which shall conduct basic policy researches in forestry and develop or help develop an effective machinery for forestry policy formulation and implementation. To help defray the cost of operating said Center, it is authorized to receive assistance from the wood industry and other sources."

"SEC. 14. Existing pasture leases in forest lands. — Forest lands which are not reservations and which are the subject of pasture leases shall be classified as grazing lands and areas covered by pasture permits shall remain forest lands until otherwise classified under the criteria, guidelines and methods of classification to be prescribed by the Department Head: Provided, That the administration, management and disposition of grazing lands shall remain under the Bureau."

"SEC. 17. Establishment of boundaries of forest lands. — All boundaries between permanent forests and alienable or disposable lands shall be clearly marked and maintained on the ground, with infrastructure or roads, or concrete monuments at intervals of not more than five hundred (500) meters in accordance with established procedures and standards, or any other visible and practicable signs to insure protection of the forest.

"In all cases of boundary conflicts, reference shall be made to the Philippine Coast and Geodetic Survey Topo map."

"SEC. 19. Multiple use. — The numerous beneficial uses of the timber, land, soil, water, wildlife, grass and recreation or aesthetic value of forest lands and grazing lands shall be evaluated and weighted before allowing their utilization, exploitation, occupation or possession thereof, or the conduct of any activity therein.

"Only the utilization, exploitation, occupation or possession of any forest lands and grazing lands, or any activity therein, involving one or more of its resources, which will produce the optimum benefits to the development and progress of the country and the public welfare, without impairment or with the least injury to its resources, shall be allowed.

"All forest reservations may be open to development or uses not inconsistent with the principal objectives of the reservation: Provided, That critical watersheds, national parks and established experimental forests shall not be subject to commercial logging or grazing operations, and game refuges, bird sanctuaries, marine and seashore parks shall not be subject to hunting or fishing and other activities of commercial nature."

"SEC. 20. License agreement, license, lease or permit . — No person may utilize, exploit, occupy, possess or conduct any activity within any forest and grazing land, or establish, install, add and operate any wood or forest products processing plant, unless he had been authorized to do under a license agreement, license, lease or permit: Provided, That when the national interest so requires, the President may amend, modify, replace, or rescind any contract, concession, permit, license, or any other form of privilege granted herein: Provided, further, That upon the recommendation of the appropriate government agency, the President may, pending the conduct of appropriate hearing, order the summary suspension of any such contract, concession, license, permit, lease or privilege granted under this decree for violation of any of the condition therein such as those pertaining but not limited to reforestation, pollution, environmental protection, export limitation or such condition as are prescribed by the Minister of Natural Resources in daily issued regulations.

"SEC. 22. Silvicultural and harvesting system. — In any logging operation in production forests within forest lands, the proper silvicultural and harvesting system that will promote optimum sustained yield shall be practiced, to wit:

1. For dipterocarp forest, selective logging with enrichment or supplemental planting when necessary.

2. For pine or mangrove forest, the seed tree system with planting when necessary.

Provided, That subject to the approval of the Department Head, upon recommendation of the Director, any silvicultural and harvesting system that may be found suitable as a result of research may be adopted: Provided, further, That no authorized person shall cut, harvest or gather any timber, pulpwood, or other products of logging unless he plants three times of the same variety for every tree cut or destroyed by such logging or removal of logs. Any violation of this provision shall be sufficient ground for the immediate cancellation of the license, agreement, lease or permit.

"SEC. 26. Annual allowable cut. — The annual allowable cut or harvest of any particular forest land under a license agreement, license, lease or permit shall be determined on the basis of the size of the area, the volume and kind of harvestable timber or forest products and healthy residuals, seed trees and reproduction found therein, and the established cutting cycle and rotation thereof.

"No person shall cut, harvest and gather any particular timber, pulpwood, firewood and other forest products unless he has been authorized under Section 20 hereof to do so and the particular annual allowable cut thereof has been granted.

"In the public interest and in accordance with Section 21 hereof, the Department Head shall review all existing annual allowable cut and thereupon shall prescribe the level of annual allowable cut for the common dipterocarp timber, softwood and hardwood timber cutting of which is not prohibited, pulpwood, firewood and other forest products using as bases the factors as well as the updated aerial photographs and field inventories of such forest land: Provided, That pending the completion of such review and appropriate amendment of the annual allowable cut in existing license agreement, license, lease or permit, existing annual allowable cut that not sufficiently supports wood or forest products processing plant or that will support duly approved processing expansion program or new processing projects may be allowed to continue without change: Provided, further, That no additional or adjustment in annual allowable cut shall be made until after such a review has been made."

"SEC. 30. Rationalization of the wood or forest products industry. — While the expansion and integration of existing wood or forest products processing plants, as well as the establishment of new processing plants shall be encouraged, their locations and operations shall be regulated in order to rationalize the whole industry.

"No expansion or integration of existing processing plant nor establishment of new processing plant shall be allowed unless environmental considerations are taken into account and adequate raw material supply on a sustained-yield basis is assured.

"A long-term assurance of raw material source from forest concessions and/or from industrial tree plantations, tree farms or agro-forest farms whose annual allowable cut and/or whose harvest is deemed sufficient to meet the requirement of such processing plant shall govern, among others, the grant of the privilege to establish, install additional capacity or operate a processing plant.

"Henceforth within one year from the date of this law, as a condition to exercise of the privileges granted them under a license agreement, license, lease or permit, wood or forest products processors without forest concessions or areas that may be developed into industrial tree plantations, tree farms or agro-forest farms and licensees, lessees or permittees without processing plants shall jointly adopt any feasible scheme or schemes, other than log supply contract, for the approval of the Department Head: Provided, That no license agreement, license, lease or permit, including processing plant permit, shall be granted or renewed unless said scheme or schemes are submitted to, and approved by, the Department Head.

"All processing plants existing, to be expanded, to be integrated or to be established shall obtain operating permits, licenses and/or approval from the Bureau or the Department, as the case may be, and shall submit themselves to other regulations related to their operation.

"The Department Head may cancel, suspend, or phaseout all inefficient, wasteful, uneconomical or perennially short in raw material wood or forest products processing plants which are not responsive to the rationalization program of the government."