FINANCING MEMORANDUM

Memorandum No. PHI/B7-5041/I/93/20

Republic of the Philippines National Integrated Protected Areas Programme (NIPAP)

The Commission of the European Communities, hereinafter referred to as “THE COMMISSION”, acting for and on behalf of the European Community, hereinafter referred as “THE COMMUNITY”

of the one part, and

the Government of the Republic of the Philippines, hereinafter referred to as ‘THE RECIPIENT”

of the other part,

HAVE AGREED AS FOLLOWS :

The project referred to in Article 1 below shall be executed and financed out of the budget resources of THE COMMUNITY in accordance with the provisions set out in this memorandum. The technical, legal, and administrative framework within which the project referred to in Article 1 below shall be implemented is set out in the General Conditions annexed to the Framework Agreement of 8 November 1984 between THE COMMISSION and THE RECIPIENT, as supplemented by the terms of this Memorandum and the Special Provisions annexed hereto.

ARTICLE 1 - NATURE AND SUBJECT

As part of its 1993 aid programme, THE COMMUNITY shall contribute, by way of grant, towards the financing of the following project :

Project Number : B7 – 5041/I/93/20

Title : National Integrated Protected Areas Programme (NIPAP)

hereinafter referred to as “THE PROJECT”.

ARTICLE 2 - COMMITMENT OF THE COMMUNITY

The commitment of THE COMMUNITY is fixed at 11,000,000.00 ecu (eleven million ecu), hereinafter referred to as “THE EC GRANT”.

This commitment is subject to an expiry date, after which any balance of funds remaining available under the EC GRANT shall be automatically cancelled. THE COMMISSION may however, depending on the circumstances, agree to an appropriate extension of this expiry date, should such an extension be requested and properly justified by THE RECIPIENT.

For the present project, the expiry date of THE EC GRANT is hereby set at 31 December 2000 (Thirty-first December Twenty hundred).

ARTICLE 3 - ADDRESSES

Correspondence relating to the execution of THE PROJECT, stating THE PROJECT’S number and title, shall be addressed to the following:

for THE COMMUNITY :

Commission of the European Communities, Directorate-General for External Relations, Rue de la Loi 200, B- 1049 Brussels, Belgium

Telex : 21877 COMEU B Facsimile : (32 2) 299 0204

for THE RECIPIENT :

National Economic and Development Authority NEDA SA Pasig, Amber Avenue, Pasig, Metro Manila, Philippines

Telex : 29058 NED PH Facsimile: (63 2) 673 6518

ARTICLE 4 - NUMBER OF COPIES

This memorandum is drawn up in the English language in two copies each being equally valid.

ARTICLE 5 - ENTRY INTO FORCE

This memorandum shall enter into force on the date that it has been signed by both parties. The Annex shall be deemed an integral part of this memorandum.

Done at 30. V. 1995

This day of

_________________________ ___________________________ THE RECIPIENT THE COMMUNITY

Annex Technical and Administrative Provisions

ANNEX A

TECHNICAL AND ADMINISTRATIVE PROVISIONS

Recipient : The Republic of the Philippines

Project Title : National Integrated Protected Areas Programme (NIPAP)

Executing Agency : Department of Environment and Natural Resources (DENR)

Project Number : B7 –5041/I/93/20 1 OBJECTIVES AND LOCATION OF THE PROJECT 1.1 Overall objective

The overall project objective is to help protect, conserve and manage tropical forest biodiversity areas with endangered endemic species, in some 8 Protected Areas at various sites throughout the Philippines. 1.2 Specific objectives

This general objective shall be achieved through the implementation of a programme of financial and technical assistance which shall for each of the eight selected Protected Areas :

 protect biodiversity of the specific areas;  ensure sustainable management in the eight protected areas;  enhance the capabilities of the Department of Environment and Natural Resources (DENR) staff and local communities so that they will be in a position to take over and maintain the policies and facilities introduced during the life of the project;  develop and maintain the ecological benefits the natural resources provide to local communities;  increase the wise use of available natural resources (especially those of forest and coastal areas);  contribute to enforcing the law and stopping all illegal activities in the area;  create a public awareness of the need to protect the forest and biodiversity;  help ensure that the rights of indigenous communities living in and around the Protected Areas are respected, and likewise that gender issues are given due attention in project planning and implementation.

To support this, assistance shall also be given for the establishment and operation of the Project Office (PO), which will carry out the overall implementation and planning of the project and be responsible for the preparation and implementation of individual project actions, and for the operation of appropriate field units in each of the selected Protected Areas (Protected Area Offices, or PAOs).

In its implementation, the project shall emphasise a community-based sustainable protection strategy, within the framework of the Philippine “National Integrated Protected Areas System Act” of 1992 (Republic Act 7586, hereinafter referred to as the NIPAS Act).

1.3 Location

The project will operate in some eight Protected Areas at various sites throughout the Philippines, and will be implemented through a Project Office to be established in Manila. The 8 Protected Areas selected for inclusion in the project include :

 Mount Pulog, in the province of Benguet;  Mount Isarog, in Camarines Sur  Mount Iglit-Baco, in Mindoro Occidental  Sibuyan Island, in Romblon  Coron Island, in Palawan  El Nido, in Palawan  Malampaya Sound, in Palawan  Mount Malindang, in Misamis Occidental

Should the El Nido Protected Area be accepted for funding by another donor before the end of 1995, DENR may propose an alternative site for inclusion in the present project.

1.4 Costs and financing

The total cost of the project, over a 5-year period, is estimated at 12,700,000 Ecu Of this, the EC grant will cover 11,000,000 Ecu, while the Government of the Philippines will cover the remaining costs of the project from its national budget.

2 PROJECT DESCRIPTION

2.1 Project components

Individual project components will include the following :

 the establishment of an appropriate Geographic Information System (GIS), during the first year of project implementation. This will provide the necessary data in a usable format to facilitate the identification of core zones (no exploitation), buffer zones (limited exploitation) and mixed-use zones (controlled exploitation), and thus to assist Protected Area management, together with the LGUs, in the review and revision of land allocation.

 the execution of detailed socioeconomic surveys and consultations for each of the 8 selected Protected Areas. This will in particular include : - detailed surveys of communities living in and around the Protected Areas, to identify more precisely their needs and expectations; these surveys will be carried out during the first year of implementation; - substantive and ongoing consultation exercises with these local communities to ensure that they are fully informed as to the objectives of the projects, and that they can contribute fully to the planning and implementation of project activities; - the provision of training and organisational support for local community groups and local NGOs in the selected Protected Areas, to strengthen their capability to participate fully in the planning and implementation of project activities and in the sustainability of such activities after project completion;

 the preparation of a General Management Plan for each Protected Area, consistent with the requirements of the NIPAS Act, together with the initial implementation and regular updating of this Plan;

 the effective delineation and demarcation of Protected Area boundaries (including in particular the delimitation of core zones and buffer zones), together with actions to strengthen the capability of Protected Area management staff to effectively patrol these areas. The local communities shall be closely associated with this delineation and demarcation work, and also with the patrolling work;

 the promotion of alternative economic activities, which shall safeguard and upgrade the living conditions and incomes of local communities in a manner consistent with sustainable resource protection. This shall include appropriate actions in such fields as community-based forest management and the use of minor forest products, in strengthening agricultural production and agricultural services (particularly for the multi-use zones), in aquaculture and in coastal resource management, in small-enterprise development, in health and sanitation, and other rural services. Where appropriate, and where not inconsistent with the cultural practices of indigenous communities in the areas concerned, ecotourism shall likewise be promoted;

 enhancing the practical effectiveness and longterm sustainability of the Protected Area management and consultation mechanisms foreseen in the NIPAS Act, through the provision of appropriate training and advice at all levels. This shall include the provision of appropriate training activities for members of local communities, for the personnel of LGUs and local NGOs, and for field personnel of DENR; This shall likewise include the execution of a study analysing the costs and benefits associated with the protection and management of the project areas, to assist in determining the measures required to ensure the longterm sustainability of the IPAS approach;

 helping ensure that all communities living in and around the Protected Areas shall become properly acquainted with the importance of biodiversity protection and sustainable resource management concepts, through the implementation of an effective information and education programme. In addition to the development of appropriate information and education materials, full use shall be made of radio and other mass media channels as appropriate;

 the provision of the necessary facilities for operation of the Project Office and of the respective PAOs, and for overall project planning, operation and management. In addition to providing for the investment and operating cost of the necessary facilities and equipment, and for personnel and recurrent costs, provision is also made for a substantial technical assistance input, which will be fully associated with the national project staff through a joint responsibility arrangement. 2.2 Project inputs

Project inputs will include the following :

 office space for the Project Office in Manila, and appropriate facilities at each Protected Area, including simple office buildings, staff accommodation where necessary, and other project facilities (workshops, training and demonstration facilities, nurseries, visitor education centres, simple field research facilities, basic ecotourism facilities and campsites, guardposts and watchtowers);

 transport facilities, including 4WD station-wagons or pickups, motor-cycles, and speed-boats or bancas, as well as horses or carabaos as appropriate;

 other equipment as necessary, including office equipment and furniture, communications equipment (including SSB units and hand-held radios), micro-computers, survey equipment, scientific equipment and materials, research materials and publications, workshop equipment and tools, and agricultural and fisheries equipment as appropriate,

 micro-project funding for livelihood activities;

 credit funding as appropriate in support of livelihood activities, which will generally be provided in kind and on a revolving-fund basis;

 funding for training, information and education activities;

 personnel and recurrent costs, including fuel and materials, spare parts, staff allowances and salaries, and operating costs for the project as a whole (including the costs of preparing management plans and of carrying out survey and consultation work);

 technical assistance, amounting to some 210 man/months of expatriate consulting services, and some 260 man/months of local consultant services; 2.3 Time schedule

The project will be implemented over a period of 5 years, calculated from the date of signature of the technical assistance contract. It is foreseen that the first 12 months of the 5-year implementation period will largely be concerned with inception activities. 2.4 Financial and other contributions

2.4.1 The EC grant will cover the entire cost of technical assistance and equipment, as well as a proportion of personnel and recurrent costs and of operational activities. This contribution to personnel and recurrent costs and operational activities will be progressively reduced starting from the third year of project implementation.

2.4.2 The Philippine Government contribution will cover the entire cost of any land required for project facilities (including any compensation for rights of way), as well as a proportion of personnel and recurrent costs and of field activities. This contribution to personnel and recurrent costs and field activities will commence from the third year of project implementation and be progressively increased thereafter. The specific coverage and annual scheduling of the Government contribution, in line with the requirements of this Financing Memorandum, shall be set out in the first detailed workplan. In addition, the Government will make an in-kind contribution to cover the normal salary costs of permanent government personnel assigned to the project, as well as providing office space for the Project Office in Manila.

2.5 Cost estimates

2.5.1 EC Grant Ecu

Field activities 2,400,000

Training, Education, Information & Surveys 1,050,000

Vehicles & Equipment 1,150,000

Personnel & Recurrent Costs 2,800,000

Technical Assistance 3,100,000

Contingencies 500,000

TOTAL 11,000,000 Ecu

2.5.2 Philippine Government contribution

Field activities 350,000

Training, Education, Information & Surveys 100,000

Personnel & Recurrent Costs 1,150,000

Contingencies 100,000

TOTAL 1,700,000 Ecu

This Philippine Government contribution shall be made from the budgetary resources of the national government. The figure shown above does not include the in-kind contribution to be made by the government to cover the normal salary costs of permanent government personnel assigned to the project, the cost of providing space for the PO in Manila, nor the cost of land and rights-of-way, each of which will also be covered in full by the government.

2.5.3 Use of Contingencies

Eventual releases from the contingencies provisions, along with any reallocations of the funding provisions of individual components which might become necessary to take account of the relative progress and achievement of the different components, shall be proposed for the agreement of the ESC and the Commission in the revisions of the project workplan.

2.6 Implementation

2.6.1 General

The Department of Environment and Natural Resources (DENR) shall be the Executing Agency Project activities will be carried out by a Project Office (PO) to be established for this purpose in Manila, this office will be responsible for overall project planning and implementation, coordination, management and monitoring. Protected Area Offices (PAOs) will be established at each of the selected Protected Area sites, operating within the framework of the NIPAS Act and under the supervision of the Protected Area Superintendent appointed by DENR, but responsible directly to the Project Office for the implementation of actions funded under the project in each specific site. Individual project actions will be implemented either by the PO directly, or by local communities of non-governmental bodies under the supervision of the PAOs and the PO.

2.6.2 Project Office and Project Directors

The Project Office shall be headed jointly by a National Co-Director and a European Co-Director. The two Co-Directors shall be jointly responsible to DENR for the implementation of the project and for the management of project funds, within the framework of the project workplan as agreed by the ESC and the Commission.

For administrative purposes, the Project Office shall be established as an administrative unit within the Office of the Secretary of DENR, reporting to him via the Director of PAWB. However, the Project Office shall from the beginning operate in an autonomous fashion, in accordance with Article 3.1 below, within the framework of the approved workplan.

DENR shall appoint a National Co-Director, at an appropriate senior level, to take charge of the Project Office and to be jointly responsible with the European Co-Director for the implementation of the project. This appointment shall be subject to the concurrence of the Commission on the basis of the candidate’s technical skills and experience.

The Commission shall appoint a European Co-Director, at an appropriate senior level, to be jointly responsible with the National Co-Director for the implementation of the project. This appointment shall be subject to the concurrence of DENR on the basis of the candidate’s technical skills and experience.

The National Co-Director and the European Co-Director shall carry out their duties jointly, and shall be jointly responsible to DENR for the preparation of the annual workplan and for the implementation of the project in accordance with the agreed workplan. To this end, the two Directors shall work in the closest collaboration at all times.

2.6.3 Workplan and Reporting

The two Co-Directors shall be jointly responsible for the :

 preparation of the project workplan, including both an overall workplan (covering strategic thrusts and milestones over the entire life of the project, both operational and financial), and a detailed annual workplan (covering specific objectives and activities for the current year, together with cost estimates, procurement procedures and schedules, cash flows and staffing patterns), for the approval of the ESC and the Commission,  the implementation of the project in line with the agreed workplan,  the preparation of tender documents, obtaining tenders and quotations, and placing orders after tender evaluation;  certifying the acceptance of works, supplies and services and certifying payment orders;  the approval of the PA workplans submitted annually by individual Protected Areas;  the timely annual revision of the project workplan, for ESC and Commission approval;  the preparation of 6-monthly reports on project progress and annual reports on project achievements;

During the first year, the project workplan shall be submitted in three sections, with a start-up workplan within two weeks, the overall workplan within three months, and the detailed annual workplan within six months, from the time at which the European Co-Director takes up his duties. The start-up workplan will cover only those actions and expenditures necessary for initial project commencement during this first year.

In addition to the reports provided to the executing agency, ESC and the Commission, the Project Office shall also establish, not later that three months after each year of project implementation, an annual public report describing the activities and achievements of the programme. This report will be given a broad circulation, as well as being available on request to all interested parties. Similar public reports, dealing more specifically with project activities and achievements within each Protected Area, shall be issued annually by each PAO.

2.6.4 Project Committees The government shall establish Executive Steering Committee (ESC), chaired by the Secretary of DENR, which shall be responsible on behalf of the Government for approving the project’s annual workplan and for reviewing project progress, and for providing policy guidance as necessary. Membership of the ESC shall include representatives of concerned national government agencies, of major national NGOs active in environmental protection, of other major projects operating within the NIPAS framework, and of such other public or private sector bodies as may be appropriate. The Director of PAWB shall act as Vice-Chairman of the ESC, and the National Co-director as Secretary of the ESC.

Technical consultation and coordination at the national level shall be dealt with in coordination with the IPAS Technical Coordinating Committee (ITCC) provided for under the NIPAS Act. Technical consultation and coordination at the field level, for each selected Protected Area, shall be dealt with in coordination with the Protected Areas Management Board (PAMB) to be established for each Protected Area under the NIPAS Act. DENR shall ensure that the National Co-Director shall be a full member of the ITCC and a non-voting member of the relevant PAMBs and their respective Executive Committees.

2.6.5 Planning and approval of field activities

The project shall assist in the early development of an appropriate General Management Plan for each selected Protected Area, in the format required by the NIPAS Act, for the approval of the Secretary of DENR as foreseen by law. The project shall likewise assist in updating this General Management Plan as necessary.

In addition to the General Management Plan foreseen for each Protected Area, a specific annual workplan shall be prepared for each Area, outlining succinctly the strategies, objectives, activities and budgets for activities to be funded by the project within the context of the General Management Plan for the Protected Area during the year in question. Each PA workplan shall be endorsed by the relevant PAMB for the approval of the Co-Directors, and shall be consistent with the NIPAS Act and with the project’s overall workplan and budget. These annual PA workplans shall be the basis for the release of cash advances from the project to the PAOs. These annual PA workplans shall distinguish between general programme activities required for the proper implementation of the management plan, and specific project activities (microprojects) to be carried out in the fields of Protected Area Improvement, Forestry and Aquaculture, Livelihood Activities, and Ecotourism.

2.6.6 Inception activities

During the first year of implementation, the two Co-Directors shall prepare for the agreement of DENR and the Commission detailed recommendations for the procedures to be followed regarding consultation with local communities, micro-project appraisal and selection, management reporting systems, accounting and financial procedures and overall project monitoring and evaluation. The two Co-Directors shall also prepare for the agreement of DENR and the Commission detailed recommendations for the manner in which project area planning, livelihood activities, and training and information activities shall be implemented. 2.7 Financial procedures

2.7.1 For those expenditures funded under the EC grant and involving direct payments in currencies other than Pesos, payment shall be made directly by the Commission using its own procedures.

2.7.2 For those expenditures funded under the EC grant and involving local expenditures in Pesos, payment shall be made as follows :

 the project shall establish appropriate bank accounts in the Philippines (one in Ecu and one in Pesos) for this sole purpose. These accounts shall be operated with the joint signatures of the two Directors. Subordinate Peso accounts may only be opened with the express agreement of the Commission;

 the Commission shall, on the basis of the agreed workplan and estimates make an initial advance of up to 100% of the estimated expenditure during the first year of implementation;

 disbursement from the project accounts shall be made jointly by the two Directors, in line with project requirements and the agreed workplan and estimates;

 transfers from the Ecu account to the Peso account shall be made in line with the monthly requirements of the project. The balance in the Peso account shall not normally exceed two months’ estimated expenditure, nor fall below one month’s estimated expenditure. The exchange rate applied to transfers from the Ecu account to the Peso account shall be the regular market exchange rate applicable on the day on which the transfer is made;

 monthly reports of expenditure from the project accounts shall be prepared by the two Co-Directors and submitted for inspection to a qualified firm of auditors to be hired by the project for this purpose. The selection of auditors shall be subject to the prior concurrence of both DENR and the Commission. Once certified by the auditors as being in conformity with project progress and the agreed workplan and estimates, these monthly returns shall be the basis of requests by the two Co-Directors to the Commission for the transfer of additional funds; such requests shall normally be made quarterly;

 in case of urgency, duly justified by the two Co-Directors, the Commission may be requested to make a temporary partial reimbursement on the basis of an unaudited request. Any such temporary reimbursement will be recovered from subsequent audited requests;

 copies of all requests for transfer of funds made by the two Co-Directors to the Commission shall be provided simultaneously to the Office of the Secretary of the DENR;

 for the second and subsequent years of project implementation, the outstanding advance of the preceding year shall be adjusted to reflect the agreed estimates of expenditure for the current year. This adjustment will be effected by providing a supplementary advance, or by decreasing subsequent payment installments made in respect of reimbursement requests during that current year;

 all funds in the project accounts; including any interest generated thereon, shall remain the property of the Commission. Any unused balances remaining available on the termination of the project shall revert to the Commission.

2.7.3 For those expenditures funded by the Government of the Philippines from its own budgetary resources, expenditures and the accounting for expenditures shall be made by the National Co-Director in accordance with normal government procedures. A summary of such expenditures, annual and cumulative, shall however be included in the project’s annual reports.

2.7.4 For recording purposes, the Project Office shall inform the Department of Budget Management (DBM), on a quarterly basis, of the value of all goods and services received by the project in reflection of expenditures funded under the EC grant. These statements shall be the basis for DBM to issue the necessary Advice of Allotment (AA) and Non-Cash Availment Authority (NCAA) required for recording disbursements under a grant-in-kind procedure.

2.8 Procurement procedures

2.8.1 Procurement of works, supplies and local services under the EC grant shall be carried out through international or local tendering, international or local calls for quotation, or mutual agreement. The choice of procedure for particular categories or sizes of procurement (other than those covered by 2.8.2 below) shall be established in the workplan for agreement of the Commission.

2.8.2 Technical assistance services shall be procured by the Commission under its own procedures, the Consultant who will provide these services will be selected by the Commission, following terms of reference to be agreed between the Commission and DENR, and will be appointed by the Commission, after the concurrence of DENR on the selected Consultant has been obtained.

2.8.3 The General Conditions of Contract prepared by the Commission shall be used for internationally-procured services, works or supplies financed by the EC grant.

3 SPECIAL CONDITIONS 3.1 Project autonomy : The Commission and the Government recognise that a proper autonomy of the Project Office, in the framework of the agreed workplan, is an essential condition for the successful operation of the project. Given this, the government will take all necessary steps immediately on commencement of project implementation, to ensure that the two Co-Directors have all the necessary functional autonomy (financial, technical and administrative) required to effectively implement the agreed workplan. In particular, the Government shall ensure that the National Co-Director is given the necessary administrative authority to operate the project accounts jointly with the European Co-Director. 3.2 Establishment of Project Office and Project Committees : Within three months from signature of the present Financing Memorandum, the Government shall take all necessary legal and administrative steps to establish the Project Office as an administrative unit attached directly to the Office of the Secretary of DENR, to appoint the National Co-Director and other senior staff, to provide the National Co-Director with necessary administrative and financial authority as called for in Article 3.1 above, to provide likewise for the full participation of the National Co-Director in meetings of relevant PAMBs, to establish the various Project Committees, and to issue the necessary Joint Circular and Memorandum of Agreement required for the proper implementation of the project in full conformity with the provisions of the present Financing Memorandum. Within the first year of implementation, the Government shall likewise take all necessary steps to establish a Memorandum of Agreement between DENR and the Palawan Council for Sustainable Development, consistent with the provisions of this Financing Memorandum, regarding the cooperation between these bodies in relation to project areas within the province of Palawan which are covered both by RA, 7586 (NIPAS Act) and RA. 7611 (SEP Act). 3.3 Respect of the rights of indigenous peoples : Reflecting the relevant provisions of the NIPAS Act, the project shall ensure that the rights of indigenous peoples are properly respected in all project activities. In particular, the project shall not operate in areas considered as ancestral domain except with the full consent of the indigenous inhabitants, properly expressed after a substantive consultation process. 3.4 Possible additional Protected Area sites : Should there be substantial savings under the project, or should it be necessary to delete one or other of the selected sites listed in Article 1.1 above, DENR may then propose to the Commission the inclusion of one or more additional sites under the project. 3.5 Gazetting of Protected Area sites : For those selected Protected Area sites which have not yet been formally gazetted under the terms of the NIPAS Act, and for those selected Protected Area sites which are already gazetted but where an extension of the gazetted area may be necessary for the sustainable protection of the Protected Area concerned, the Government shall take the necessary steps to complete the gazetting process within the time period provided for under the NIPAS Act, and in any case not later than one year following the signature of this Financing Memorandum. 3.6 Evaluation and sustainability : The Government and the Commission shall during the third year of implementation undertake a joint review of project progress and achievements. A similar review shall be undertaken during the fifth year of implementation.

The first of these reviews shall in particular consider the appropriateness of the systems and operations developed by the project, and the effectiveness of project activities to date. The second review shall in particular consider the steps necessary to ensure the long-term sustainability, after project completion, of the activities initiated by the project, taking into account any lessons learned regarding the effectiveness of the overall NIPAS framework. Following this second review, the Government shall inform the Commission of the steps that it will take to establish this long-term sustainability of project activities and achievements.

3.7 Philippine Government contribution : The Philippine Government will make a contribution to the costs of the project, both in kind and from the national budget, as specified in Articles 2.4.2 and 2.5.2 above. The budgetary contribution to be made by the Government shall commence not later than the third year of project implementation, and increase progressively thereafter. It is expected that approximately 20% of budgetary contribution foreseen in Article 2.5.2 will be made available in the third year of implementation, 35% in the fourth year, and 45% in the fifth year.

While the Government shall assure the availability of these funds from its national budget, it shall nevertheless also seek to encourage an appropriate modest take-up of certain costs by the LGUs concerned through their own budgets, with a particular view to helping ensure the sustainability of project activities in the longterm.

3.8 Disputes : Disputes arising during the performance of a contract between the Government and a contractor, consultant or supplier who is not a Philippine national shall be settled definitively in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce.