The Philippine Supreme Court has nullified with finality a tripartite deal with China and Vietnam for joint petroleum “research” in the South China Sea, saying it violates the constitution.
The court affirmed its decision January junking the 2005 Tripartite Agreement for Joint Marine Seismic Undertaking (JMSU) between Philippine National Oil Co, China National Offshore Oil Corp and Vietnam Oil and Gas Corp, denying the government’s motion for reconsideration.
“The assailed Decision declared the JMSU unconstitutional for allowing wholly-owned foreign corporations to participate in the exploration of the country’s natural resources without observing the safeguards provided in Section 2, Article XII of the 1987 Constitution”, it said in a press release Wednesday. The text of the decision has yet to be released.
The court was referring to a provision specifying that the exploitation of the nation’s natural resources shall be “under the full control and supervision of the State”. Section 2 of Article 10 specifies that foreign companies’ involvement in the exploration, development and utilization of the nation’s natural resources, including oil and minerals, is limited to technical or financial assistance.
The government has argued the pact with the Chinese and Vietnamese state-owned companies is not for exploration. But the court insisted “since the objective of the JMSU as stated in its Fifth Whereas Clause is ‘to engage in a joint research of petroleum resource potential’ in the Agreement Area, the agreement clearly involved exploration”.
The treaty, signed under the administration of then president Gloria Macapagal-Arroyo would have allowed what the three countries termed as “seismic work” in 55,168.59 square miles of the South China Sea, where Brunei, China, Malaysia, the Philippines, Taiwan and Vietnam have competing claims.
The court said for petroleum exploration under the deal to be valid, it must be done under any of the following ways: “(1) directly by the State; (2) through co-production, joint venture or production-sharing agreements with Filipino citizens or qualified corporations; (3) through small-scale utilization of natural resources by Filipino citizens; and (4) through agreements entered into by the President with foreign-owned corporations involving technical or financial assistance for large-scale exploration, development, and utilization of minerals, petroleum, and other mineral oils”.
However, after the court’s initial decision, made January 10, the Marcos administration announced the resumption of negotiations between Manila and Beijing about potential oil and gas development in the sea. The Philippine foreign affairs ministry said April 4 in a brief statement that “in light of the Joint Statement issued during the President’s state visit to Beijing last January 5, on the agreement ‘to resume discussions on oil and gas development at an early date’ the Philippines and China will meet for preparatory talks in Beijing sometime in May.”
“The meeting will discuss parameters and terms of reference”, it added.
In President Ferdinand Marcos Jr’s visit China and the Philippines “agreed to bear in mind the spirit of the Memorandum of Understanding on Cooperation on Oil and Gas Development between the Government of the People’s Republic of China and the Government of the Republic of Philippines signed in 2018”, a joint statement said.
The 2018 memorandum of understanding (MOU) stated the two countries “decided to negotiate on an accelerated basis arrangements to facilitate oil and gas exploration and exploitation in relevant maritime areas consistent with applicable rules of international law”.
The MOU was inked under the government of President Rodrigo Duterte, who sought warmer relations with China. It came two years after the government of Duterte predecessor Benigno Aquino III won against China before the Permanent Court of Arbitration over disputed areas in the South China Sea.
The July 2016 ruling invalidated Beijing’s “nine-dash line” and historical claims to the sea. Both are “without lawful effect to the extent that they exceed the geographic and substantive limits of China’s maritime entitlements under the Convention”, the judgment read, referring to the 1982 United Nations Convention on the Law of the Sea.