The Philippine Supreme Court has permanently struck down a tripartite agreement with China and Vietnam for a joint “investigation” of oil in the South China Sea, saying it violates the constitution.
The court upheld its decision in January to reject the 2005 Tripartite Agreement for the Joint Marine Seismic Undertaking (JMSU) between Philippine National Oil Co, China National Offshore Oil Corp and Vietnam Oil and Gas Corp, denying the motion of reconsideration of the government.
“The assailed decision declared JMSU unconstitutional for allowing wholly owned foreign corporations to engage in the exploration of the country’s natural resources without observing the safeguards provided in Section 2, Article XII of the 1987 Constitution,” he said on Wednesday in a press release. The text of the decision has not yet been made public.
The court was referring to a provision that specifies that the exploitation of the nation’s natural resources must be done “under the full control and supervision of the State.” Section 2 of Article 10 specifies that the participation of foreign companies 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 that the pact with 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 Consideration Clause, is to ‘participate in a joint investigation of the potential for petroleum resources’ in the Agreement area, the ‘agreement clearly involved exploration’.
The treaty, signed under then-President Gloria Macapagal-Arroyo’s administration, would have allowed what the three countries called “seismic work” on 55,168.59 square miles of the South China Sea, where Brunei, China, Malaysia, the Philippines, Taiwan and Vietnam have conflicting claims.
For oil exploration under the agreement to be valid, it must be done in one of the following ways: “(1) directly by the State; (2) through co-production, joint venture, or shared production arrangements with Filipino citizens or qualified corporations; (3) through the 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 the exploration, development, and large-scale utilization of minerals, petroleum, and other mineral oils”.
However, after the court’s initial decision, made on January 10, the Marcos administration announced the resumption of negotiations between Manila and Beijing on potential offshore oil and gas development. The Philippine Ministry of Foreign Affairs said in a brief statement on April 4 that “in light of the joint statement issued during the President’s state visit to Beijing last January 5, on the agreement” to resume oil and gas development discussions at an early date.” The Philippines and China will meet for preparatory talks in Beijing sometime in May.”
“Parameters and terms of reference will be discussed at the meeting,” he added.
In the visit of President Ferdinand Marcos Jr., China and the Philippines “agreed to keep in mind the spirit of the Memorandum of Understanding on Cooperation in Oil and Gas Development between the Government of the People’s Republic of China and the government of the Republic of the Philippines signed in 2018,” a joint statement said.
The 2018 Memorandum of Understanding (MOU) stated that the two countries “decided to negotiate agreements on an expedited basis to facilitate the exploration and exploitation of oil and gas in the relevant maritime areas in accordance with the applicable rules of international law “.
The MOU was signed under the administration of President Rodrigo Duterte, who sought warmer relations with China. It came two years after the government of Duterte’s predecessor, Benigno Aquino III, won against China at the Permanent Court of Arbitration over disputed areas in the South China Sea.
The July 2016 ruling invalidated Beijing’s “nine-dash line” and historic claims over the sea. Both are “of no lawful effect to the extent that they exceed the geographic and substantive limits of China’s maritime rights under the Convention,” the ruling said, referring to the 1982 United Nations Convention on the Law of the Sea .
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