Has our Supreme Court practically sealed the doom of the very idea of joint development with China of oil and gas in the South China Sea?
That scenario looms as 12 out of 15 justices of the High Tribunal recently voided the 2005 Joint Marine Seismic Undertaking agreement by state-owned companies in China, Vietnam and the Philippines: China National Offshore Oil Corporation, Vietnam Oil and Gas Corporation and Philippine National Oil Company.
The court ruled the 2005 agreement violated the 1987 Constitution by allowing the state-owned oil companies of China and Vietnam to undertake joint oil exploration in Philippine waters.
The charter specifies “the exploration, development and utilization of natural resources shall be under the full control and supervision of the state.”
The court said oil exploration in Philippine waters should be undertaken only by Filipino citizens or corporations and groups that are at least 60 per cent owned by Filipinos.
The Supreme Court justices also said the intent of the agreement was “to discover petroleum which is tantamount to ‘exploration,’” contrary to the claim that the agreement only involved pre-exploration activities which were not covered by the constitutional prohibition.
Former Chief Justice Artemio Panganiban, in a recent commentary, said these constitutional “safeguards are sacred and must be complied with strictly and faithfully.”
The agreement led to a joint oil search in 142,886 square km (55,168 square miles) of sea, including waters claimed by the Philippines as part of its territory and other areas it contests with China, Vietnam, Malaysia, Brunei and Taiwan.
Under the Duterte administration, the Philippines signed a 2018 agreement with China aimed at achieving consensus on terms for a possible joint oil and gas exploration in the disputed waters.
But years of negotiations failed, mainly due to disagreement over which side has sovereign rights over the stretch of sea to be covered by the joint search.
Duterte terminated the agreement shortly before his six-year term ended on June 30, 2022.
The recent Supreme Court ruling effectively also brings other proposed agreements under a cloud of doubt.
President Marcos Jr. had expressed willingness to revive failed negotiations for joint oil exploration with China in a meeting with his Chinese counterpart, Xi Jinping, in Beijing recently.
The Chinese government will still push for joint oil exploration in the disputed South China Sea with the Philippines despite the recent Supreme Court decision.
China’s Foreign Ministry spokesperson Wang Wenbin called the 2005 tripartite deal “an important step by the three countries” and “a useful experiment for maritime cooperation between parties to the South China Sea” as it “played an important role in promoting stability, cooperation and development in the region.”
“China remains committed to properly handle maritime disputes in the South China Sea with countries directly concerned, including the Philippines, through dialogue and consultation, and to actively explore ways for practical maritime cooperation including joint exploration,” Wang pointed out.
The Chinese official said in Marcos’ recent state visit to China, “the two sides agreed to bear in mind the spirit of the Memorandum of Understanding on Cooperation on Oil and Gas Development signed in 2018 and resume discussions on oil and gas development at an early date.”
We agree with Sen. Sherwin Gatchalian, who headed the Senate energy committee in the previous Congress, that the recent Supreme Court may have dimmed the prospect of a similar deal just between Manila and Beijing.
“It’s good that we are talking. It’s good that we are open to it, but when you go to the nitty-gritty of things, especially the governing law that should prevail, we hit a snag,” he said.
For his part, Senate President Juan Miguel Zubiri said the government should “very carefully” study the Supreme Court decision in relation to any resumption of oil exploration talks with China.
The Senate leader said the government could now be prohibited from allowing other countries with maritime claims in the South China Sea to join the Philippines in searching for oil and gas in any part of the country’s 370-kilometer exclusive economic zone.
What is clear at this point is that joint exploration of oil and gas with China in the South China Sea is an idea whose time has come – and gone – and there’s little we can do about it unless we change our Constitution.