TITLE XIV. THE PANAMA CANAL
Article 315
The Panama Canal constitutes an inalienable patrimony of the Panamanian Nation; it shall remain open to peaceful and uninterrupted transit of vessels from all Nations and its use shall be subject to requirements, and conditions established by this Constitution, the Law and its Administration.
Article 316
An autonomous juridical entity under Public Law is hereby created with the name of the Panama Canal Authority, which shall have the exclusive administration, operation, conservation, maintenance and modernization of the Panama Canal and its pertinent activities, pursuant to constitutional and legal provisions, in order to operate in a safe, continuous, efficient and profitable manner. It shall have its own patrimony and the right to administer it.
It is the responsibility of the Panama Canal Authority the administration, maintenance, use and conservation of the hydric resources of the Panama Canal watershed, encompassing the water from the lakes and their tributary currents, in coordination with the States’ entities established by Law. The construction plans, water usage, utilization, expansion, ports’ development and of any other work or construction on the riverside of the Panama Canal shall require the prior approval from the Panama Canal Authority.
The Panama Canal Authority shall not be subject to taxes, duties, assessments, charges, contributions or revenues of national or municipal nature, with the exception of the social security quotas, educational insurance, professional risks and the taxes for public services, except as provided in Article 321.
Article 317
The Panama Canal Authority and all those institutions and authorities of the Republic linked to the maritime sector shall be part of the national maritime strategy.
The Executive Branch shall submit to the Legislative Branch the Law coordinating all these institutions to promote the social-economical development of the country.
Article 318
The administration of the Panama Canal Authority shall be in charge of a Board of Directors constituted of eleven directors appointed as follows:
- A Director appointed by the President of the Republic who shall preside [over] the Board of Directors and shall have the status of States’ Minister for the Canal Affairs;
- A Director appointed by the Legislative Branch, who shall be of its free appointment and removal;
- New Directors appointed by the President of the Republic, of common consent of the Cabinet Council and ratified by the Legislative Branch, by absolute majority of their members.
The Law shall establish the requirements to occupy the office of Director, ensuring the gradual renewal of the Directors established at paragraph 3 of this Article, in groups of three and every three years. As of the first renewal, the term of all the Directors shall be of nine years.
Article 319
The Board of Directors shall have the following faculties and functions, without prejudices of others which the Constitution and the Law establish:
- To appoint and remove the Administrator and Assistant Administrator of the Canal and determine their functions in accordance with the law;
- Establish tolls, rates and fees for the use of the Canal and its related services, subject to the final approval of the Cabinet Council;
- To contract loans, prior approval of the Cabinet Council and within the limits established by Law;
- To grant concessions for the rendering of services to the Panama Canal Authority and to the transiting vessels;
- To propose the limits of the hydrographical watershed of the Canal for the approval of the Cabinet Council and the Legislature;
- To approve privately the regulations elaborating the general rules enacted by the Legislative Branch at proposal from the Executive Branch on the contracting regime, purchases and all the subjects necessary for the proper operation, maintenance, conservation and modernization of the Canal, within the national maritime strategy;
- To exercise all those established by this Constitution and the Law.
Article 320
The Panama Canal Authority shall adopt a planning and triennial financial administration system whereby it shall approve, by means of motivated resolution, its annual budget bill which shall not be part of the General State’s Budget.
The Panama Canal Authority shall submit the Bill of the Budget to the Cabinet Council, which in turn, shall submit it to the consideration of the Legislative Branch for its examination, approval or rejection, in accordance with the procedure contained in Chapter 2, Title IX of this Constitution.
In the Budget the contributions the Social Security and the payments of rates for public services rendered shall be established as well as the transfer of economic surpluses to the National Treasury, once the costs of operation, investment, operation, maintenance, modernization, broadening of the Canal have been covered and the necessary reserves for contingencies provided by the Law and its Administration.
The execution of the Budget shall be in charge of the Administrator of the Canal and shall be supervised by the Board of Directors or whoever it designates by it and only by means of subsequent control from the General Comptroller’s Office of the Republic.
Article 321
The Panama Canal Authority shall pay, annually, the National Treasury fees per net tonnage of the Panama Canal or its equivalent, collected to vessels subject to the payment of tolls transiting through the Panama Canal. These fees shall be established by the Panama Canal Authority and shall not be inferior to those which the Republic of Panama should receive for equal concept of the 31st of December, 1999.
Because of its transit through the Panama Canal, the vessels, their cargo or passengers, owners, shipbuilders or their operation, as well as the Panama Canal Authority shall not be subject to any other national or municipal encumbrance.
Article 322
The Panama Canal Authority shall be subject to a special labor regime based on a merit system and shall adopt a General Employment Plan which shall keep as minimum, the conditions and labor rights similar to those existing at the 31st of December 1999. The permanent workmen, and those which have to be covered by a special retirement during that year and whose positions are established as necessary pursuant to applicable rules, shall be guaranteed the contracting with benefits and conditions similar to those corresponding up to that date.
The Panama Canal Authority shall contract, preferentially, Panamanian citizens. The [corresponding] Organic Law shall regulate the employment of foreign workers in such a manner as to ensure that the working conditions or the livelihood of the Panamanian employees are not impaired. Taking into consideration the essential international public service rendered by the Canal, its operation shall not be interrupted for any reason.
Labor controversies between the workers of the Panama Canal and its Administration shall be resolved between the workers or the syndicates and the Administration, following the procedures of settlement established in the Law. Arbitration shall constitute the last administrative instance.
Article 323
The regime contained in this Title may only be developed by Laws establishing general norms. The Panama Canal Authority may regulate these subjects and will provide copy of all the regulations issued in the exercise of this faculty to the Legislative Branch in a term no later than fifteen calendar days.
