Regulatory Framework
Special economic zones around the world are administered usually through an approving body or committee under the department of trade and industry of that country. Sometimes, a separate zone authority is established to implement the provisions of the zone laws in project approvals. This is the main body that monitors the compliance of locators (business units located inside these “eco-zones”) with regard to applicable laws and other pertinent provisions together with other departments such as those on labor, environment, finance, customs and immigration. Most zones are vested with the special status of a separate customs territory such as those in the Philippines. The zones given this extra privilege must be situated in an area where customs controls are easily administered to forestall or curtail smuggling activities. In the case of the Philippines, this was spelled out under Section 8 of the Special Economic Zone Act of 1995 (Republic Act 7916).
Each special economic zone is envisioned to be a decentralized but self-reliant and self-sustaining center of economic and trade activity. The zone will be provided with public infrastructure (roads, bridges, seaport, airport, etc.) and also linkages for telecommunications, transportation, water, and electricity for its inhabitants. Each ecozone is expected to administer itself with regards to such economic, financial, industrial, tourism, or other matters normally considered within the competence of the national or central government. A lot of governmental authority is delegated to zone authorities to minimize “red tape”. Other attractions are lenient or compliant labor laws (no unions allowed), relaxed environmental regulations, cheap land rentals and oftentimes ready-made buildings for immediate occupancy. However, most countries have 3-layered zone administrative structures for monitoring and compliance purposes starting at the national level, state level and zone level authority.