Chapter I

LAW No. 19
(of June 11, 1997)

Chapter I - Character, Definitions, and General Rules

Article 1. The Panama Canal Authority is an autonomous, legal entity established and organized under the terms of the National Constitution and this Law.

Article 2. For the purposes of this Law and the Regulations, the following words and terms will be understood in accordance with the definitions established in this article, unless used in a different manner, or that in the respective context another meaning may result therefrom.

Authority: The legal entity defined in Article 1 of this Law.

The Canal: The Panama Canal, including the waterway itself, as well as its anchorages, berths, and entrances; lands and sea, river, and lake waters; locks; auxiliary dams; dikes and water control structures.

Directors: The members of the Board of Directors.

Canal Watershed: The geographic area whose surface and underground waters flow toward the Canal or are emptied into it, as well as into its reservoirs and lakes.

Officials: The Administrator, the Deputy Administrator, the Inspector General, the Chiefs of the main offices, and those to whom the Regulations assign this category and designation.

Workers in Positions of Trust: Those excluded from any bargaining unit whose work or position within the Authority could, in some way, create a conflict of interest for the Administration, the worker, and any bargaining unit. The Regulations shall determine the positions that will be so designated.

Workers: Except officials and workers in positions of trust, all other workers who are part of the labor force of the Authority.

Regulations: Rules of a general or specific nature approved by the Board of Directors of the Authority in the exercise of its constitutional and legal authority.

Employment conditions: Policies, practices, and personnel matters established by this Law, Regulations, collective bargaining agreements, or any other appropriate instrument, that affect working conditions, except those expressly excluded by this Law.

Canal Operation: Includes the management, operation, maintenance, preservation, and protection of the Canal.

Area of Compatibility with Canal Operations: The geographic area, including its lands and waters, described in Annex A, which, for all purposes, is a part of this Law, wherein only those activities compatible with Canal operations may be conducted.

Bargaining Unit: A group of workers recognized, in accordance with this Law and the Regulations, as having a community of clearly identifiable interests that promote the efficiency of Canal operations, as well as effective dealings with the management of the Authority, and which is constituted to the effect of being represented by a labor union.

Exclusive Representative: The labor organization that represents the workers of a bargaining unit duly certified by the Labor Relations Board in accordance with this Law and Regulations issued thereto.

Grievance: Any claim submitted by a worker in a bargaining unit or by an exclusive representative concerning job-related matters of that worker or submitted by any worker, exclusive representative, or the Authority for alleged violation, misinterpretation, or misapplication of this Law or of any rule, practice, regulation, or collective agreement that affects employment conditions.

Representational Time: The time authorized and allowed the worker designated by the exclusive representative to represent him in an activity authorized by this Law, the Regulations, or the Collective Bargaining Agreements.

Article 3. The Canal constitutes an inalienable patrimony of the Panamanian nation; therefore, it may not be sold, assigned, mortgaged, or otherwise encumbered or transferred.

Article 4. The Authority shall have the exclusive charge of the operation, administration, management, preservation, maintenance, improvement, and modernization of the Canal, as well as its activities and related services, pursuant to legal and constitutional regulations in force, so that the Canal may operate in a safe, uninterrupted, efficient, and profitable manner. The Authority may delegate to third parties, either totally or partially, the implementation and performance of certain projects, works, or services according to this Law and the Regulations.

Article 5. The fundamental objective of the functions attributable to the Authority is that the Canal always remain open to the peaceful and uninterrupted transit of vessels from all nations of the world, without discrimination, in accordance with the conditions and requirements established in the National Constitution, international treaties, this Law, and the Regulations. Because of the nature of the highly essential international public service provided by the Canal, its operation shall not be interrupted for any reason whatsoever.

Article 6. The Authority is responsible for the management, maintenance, use, and conservation of the water resources of the Canal watershed. To safeguard this resource, the Authority shall coordinate with the corresponding specialized governmental and non-governmental organizations which have responsibility for, and interests in, the natural resources of the Canal watershed, its management, preservation, and use of the natural resources of the watershed, and shall approve the strategies, policies, programs and projects, both public and private, that may affect the watershed.

The Board of Directors of the Authority shall appoint and regulate an Interinstitutional Commission on the Canal Watershed, which shall be coordinated and governed by the Authority to coordinate the activities of the Government and non-government organizations.

Article 7. The Authority has financial autonomy, its own patrimony, and the right to manage it. Consequently, the Authority shall exercise freely the right to receive, safeguard, and assign its financial resources, and it may deposit its funds in private or official banks.

Article 8. The Authority shall appoint, promote, discipline, remove, and assign duties to its officials, its workers in positions of trust, and its workers in accordance with this Law and the Regulations.

Article 9. The Authority shall set the tolls to be charged for use of the Canal, fees, and rates for services rendered, as well as the rules for the admeasurement of ships which will be in force in the Canal, in accordance with the National Constitution, this Law, and the Regulations.

Article 10. By reason of their transit through the Canal, the vessels, their cargo, passengers, owners, and operators shall not be subject to any national or municipal tax, fee, rate, charge, lien, levy, or payment, except as established in the preceding article.

Article 11. The Authority has the primary responsibility to provide what is necessary to ensure the adequate protection and surveillance of the installations of the Canal, as well as guarantee safe, unimpeded navigation, and will, therefore, coordinate with police organizations in charge of safeguarding the integrity of public and private property.

The Authority shall issue rules on the access to Canal installations, its waters, and its banks; it will establish restrictions on the use of lands and waters as may be suitable for its operation or administration, and, in general, will provide for the security of workers, vessels, property, and assets under its responsibility.

In the case of police or criminal charges for crimes and offenses incurred against the Canal and ships, any report from the Authority shall be considered to be carrying the weight of evidence concerning the facts under investigation.

Chapter II Character, Definitions, and General Rules