Common use of Nationalization Clause in Contracts

Nationalization. is the transfer of firms, enterprises or a major branch of industry or commerce from private to state own- ership or control. These are generally 100 percent state-owned but in certain cases may have a minority private stake of up to a maximum of 40 percent such as when private capital, technol- ogy, expertise, and other contributions to national development are needed. Filipino citizens will be given preference in the private stake but if this goes to foreign capital then additional safeguards will be instituted such as additional requirements in management, profit-sharing, technology transfer, eventual buy-out by the state or Filipino citizens, and others as deemed necessary.