Carpio cites PH-China oil exploration deal

Published November 25, 2018, 11:20 AM

by Patrick Garcia

By Rey Panaligan

Acting Chief Justice Antonio T. Carpio said on Sunday the Memorandum of Understanding (MOU) signed between the Philippines and China on joint exploration of natural resources in the West Philippine Sea (WPS) “has safeguards to protect Philippine sovereignty.”

Acting Chief Justice Antonio T. Carpio

“I think we’re pretty safe. The government has included service contractors, so if we cooperate, if the cooperation with China on oil and gas activities will be through service contractors, we’re very safe,” Carpio said.

Carpio — the most senior Supreme Court (SC) justice and a nominee to the top post in the judiciary, and a member of the Philippines’ arbitration team in the Permanent Court of Arbitration (PCA) — has been vocal against China’s claims in the WPS.

He said a service contract for the joint exploration of gas and oil with China “could actually boost our rights over our exclusive economic zones in the WPS.”

The MOU was forged between the two countries during the state visit last week of President Xi Jinping of China. It is entitled “Memorandum of Understanding on Cooperation on Oil and Gas Development between the Government of the Republic of the Philippines and Government of the People’s Republic of China.”

Among other things, the MOU acknowledged that “through positive dialogue and practical cooperation,” the Philippines and China “have made substantial progress and meaningful gains in exploring opportunities and means to cooperate with each other in maritime activities, which has made significant contributions to peace, stability, and development in the region.”

It called for the setting up of an inter-governmental joint steering committee and a working group which would be led by both countries’ ministries of foreign affairs and energy.

China identified its China National Offshore Oil Corporation as its representative for the working group while the Philippines designated the Philippine National Oil Company – Exploration Corporation.

The timeline to forge a mutually acceptable cooperation was 12 months.

The MOU, however, stated that “this Memorandum of Understanding does not create rights or obligations under international or domestic law.”

PXP Energy Corporation of businessman Manuel V. Pangilinan, through its London-listed unit, Forum Energy, has an exploration permit covering the Recto Bank or the Reed Bank in the WPS.

Carpio said that Forum Energy could tap a Chinese firm as a sub-contractor. “China can come in as a subcontractor of Forum Energy or it can buy into equity of Forum Energy, or it could do both,” he said.

“That’s okay because they (Chinese) are coming in through our service contractors,” he stressed.

“I don’t have any objection with that kind of arrangement because if China comes in through our service contractors, those service contracts expressly recognize that the area falls within Philippine sovereignty or sovereign rights,” he said.

On the proposed 60-40 sharing scheme with China, Carpio said “that can be pursued for as long as the government can again make sure that the country’s sovereignty would not be compromised.”

“As long as the joint development complies with the Philippine Constitution and there is no waiver of our sovereign rights under the arbitral ruling, I have no objection,” he pointed out.

Earlier, the PCA declared that China’s nine-dash line was contrary to United Nations Convention on the Laws of the Seas (UNCLOS) and has no basis in law.

It also declared the Mischief Reef, Second Thomas Shoal and Reed Bank as “part of the exclusive economic zone and continental shelf of the Philippines and are not overlapped by any possible entitlement of China.”

At the same time, the PCA’s ruling held that China violated its obligations under UNCLOS to protect and preserve maritime environment when it built artificial islands in Mischief Reef without the necessary permission from the Philippines government.

More flights
In a bid to boost tourism growth, the Philippines and China are interested in mounting more flights between two countries and cooperating on tourism infrastructure development.

Enhancing tourism cooperation was among the issues discussed by President Duterte and Chinese President Xi Jinping during their meeting in Malacañang last week.

“Both sides recognize that the growing Chinese tourist arrivals in the Philippines over the past years have contributed to the economic growth of the Philippines,” a joint statement read.

“Both sides will encourage their citizens to travel to each other’s country, strengthen cooperation in tourism infrastructure development and encourage airlines to open more direct flights between cities of the two countries in order to further facilitate people-to-people exchanges,” it added.

At present, China is the second biggest source of international tourists in the Philippines. More than 700,000 Chinese tourists reportedly visited the country in the first seven months of the year. The Chinese travelers’ preferred destinations are Cebu, Bohol, Boracay, and Palawan.

South Koreans remained the top market of foreign tourists in the country. Other sources of international tourists are the United States, Japan, and Australia.

The Department of Tourism is targeting 7.4 million tourist arrivals this year from 6.6 million last year. (With a report from Genalyn Kabiling)