Philippine court invalidates 2005 oil exploration agreement with China and Vietnam – The Diplomat

The Philippine Supreme Court has ruled that only the Philippines can oversee exploration of its natural resources, declaring unconstitutional a 2005 agreement between China, Vietnam and the Philippines to jointly drill for oil in the disputed South China Sea.

The decision of 12 of the court’s 15 justices overturned the Joint Marine Seismic Undertaking (JSMU) agreement, which was signed by state-owned companies from the three countries, and came nearly 15 years after the original petition was filed.

“The Court has ruled that JSMU is unconstitutional to allow wholly owned foreign companies to engage in exploration of the country’s natural resources without observing the safeguards provided in Section 2, Article 12 of the 1987 Constitution,” the Supreme Court said in a statement. yesterday.

This section of the constitution states that “the exploration, development and exploitation of natural resources shall be under the full control and supervision of the state.” It also states that Manila “may enter into joint production, joint venture, or production sharing agreements” for natural resources, as long as 60 percent of the capital is owned by Filipino nationals.

The 2005 trilateral pact was signed before China asserted its extremist claim to the “nine-point line” in nearly the entire South China Sea, which it formally submitted to a United Nations body in 2009, and is in some ways a relic of a quieter era, when conflicts The region’s unresolved maritime and territorial is mostly dormant. At the time, Manila’s relationship with Beijing was in a flourishing state under the administration of President Gloria Macapagal-Arroyo, who in 2005 hailed the “golden age” of bilateral relations.

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However, the agreement was highly controversial in the Philippines, and building domestic political pressure, along with deteriorating relations between China and Vietnam, prevented renewal and extension of the agreement, which expired in 2008.

Around this time, in May 2008, lawmakers from the left-wing McCabean bloc, with the support of the National Union of People’s Lawyers, petition Seeking to invalidate JMSU. The petition alleged that the tripartite agreement was unconstitutional because it allowed foreign companies—in this case, the state-owned China National Offshore Oil Corporation (CNOOC) and Vietnam Oil and Gas Corporation (PetroVietnam)—to participate in exploration for petroleum resources. Lying within Philippine waters.

According to the petitioners, about 80 percent of the 142,886 square kilometers covered by the agreement is within the Philippines’ 200-nautical-mile exclusive economic zone. Critics also claimed that JMSU was “shrouded in secrecy”, and that CNOOC was the dominant partner in the agreement, taking charge of seismic exploration for hydrocarbon resources in areas where the states’ claims overlap.

As detailed in a report by Rappler, the Arroyo administration responded at the time that the agreement covered pre-exploration activities rather than “exploration, development and use of petroleum resources” as stipulated in the Constitution. However, the Supreme Court, in its ruling yesterday, has rejected this line of argument, stating that “exploration” relates to “the search for or discovery of something in its ordinary or technical sense.”

The Supreme Court ruling casts doubt on the feasibility of future joint oil and gas exploration between China and the Philippines. During his state visit to China last week, President Ferdinand Marcos Jr. and Chinese leader Xi Jinping expressed their willingness to revive negotiations for joint oil exploration in the undisputed — that is, controlled by the Philippines — parts of the South China Sea.

Such agreements appear to have been greatly complicated by the ruling, not to mention any possible joint development agreement between China and the Philippines in waters that remain in dispute. (This also potentially violates the 2016 arbitration award of a court in The Hague, which ruled that China’s “nine comma line” had no legal validity.)

As a result, the already small possibility that joint exploration resources It could serve as a precursor to some kind of settlement between Beijing and Manila, or at least a cessation of tensions, which seem to have narrowed further.

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