The Supreme Court (SC) has declared final its Jan. 10, 2023 decision on the unconstitutionality of the 2005 Tripartite Agreement for Joint Marine Seismic Undertaking (JMSU) among China National Offshore Oil Corporation (CNOOC), Vietnam Oil and Gas Corporation (PETROVIETNAM), and Philippine National Oil Company (PNOC) on 142,886 square kilometers in the South China Sea.
In a press statement, the SC’s public information office (PIO) said the motion for reconsideration filed by the government, through the Office of the Solicitor General (OSG), was denied.
The copy of the SC resolution that denied the motion was not made available by the PIO. It has not been uploaded in the SC website as of posting.
In its Jan. 10, 2023 decision, the SC 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.”
The constitutionality of the JMSU was questioned before the SC in 2008 by a group of then Bayan Muna Party-List Reps. Neri Colmenares, Satur C. Ocampo and Teodoro A. Casino.
They told the SC the JMSU violated Section 2, Article XII of the 1987 Constitution which mandates that “the exploration, development, and utilization (EDU) of natural resources shall be under the full control and supervision of the State.”
They also pointed out that the tripartite agreement “was illegal as it allowed foreign corporations wholly-owned by China and Vietnam to undertake largescale exploration of the country’s petroleum resources, in violation of the Constitutional provision which reserves the EDU of natural resources to Filipino citizens, or corporations or associations at least sixty (60%) percent of whose capital is owned by such citizens.”
In declaring JSMU unconstitutional, the SC noted that the term “exploration” pertains to a search or discovery of something in both its ordinary or technical sense, but the JMSU “involves the exploration of the country’s natural resources, particularly petroleum.”
It cited the text of the fifth whereas clause of the JMSU, which states: “Parties expressed desire to engage in a joint research of petroleum resource potential of a certain area of the South China Sea as a pre-exploration activity.”
Thus, the SC said, “it is clear that the JMSU was executed for the purpose of determining if petroleum exists in the Agreement Area.”
“That the Parties designated the joint research as a ‘pre-exploration activity’ is of no moment. Such designation does not detract from the fact that the intent and aim of the agreement is to discover petroleum which is tantamount to exploration,” it said.
The full court decision was written by Justice Samuel H. Gaerlan. Chief Justice Alexander G. Gesmundo, and 10 other justices concurred in the decision. Justices Amy C. Lazaro-Javier and Rodil V. Zalameda dissented.
The PIO said the SC, in its resolution, “reiterated its pronouncement in its Jan. 10, 2023 decision that for the JMSU to be valid, it must be executed and implemented under any of the following modes under Section 2, Article XII of the Constitution: (1) directly by the State; (2) through coproduction, 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.”
The PIO said the SC also said in its resolution:
“The JMSU, the Court held, does not fall into the first three modes since it involves foreign-owned corporations. For an agreement/contract under the fourth mode to be valid, it must foremost be entered into by the President himself or herself.
“In the case at bar, the President is neither a party nor a signatory to the JMSU and the contracting party is PNOC.
“The Court further held that the State has no full control and supervision under the JMSU. Under Articles 11.2 and 11.4 of the JMSU, the PNOC illegally allowed joint ownership of information about our natural resources in the Agreement Area with CNOOC and PETROVIETNAM.
“The Court said that Respondents’ (government) claim that the State did not lose control and supervision over information about our natural resources crumbles in light of JMSU’s provision stating that the parties to the agreement shall have equal rights, interest, and obligations. It noted that under JMSU, the PNOC and/or the Government would even need the prior written consent of CNOOC and PETROVIETNAM before it could disclose any of the information acquired.
“Furthermore, the Court held that it correctly took cognizance of the petition; hence, there was no violation of the hierarchy of courts. It added that Petitioners have legal standing to assail the legality of the JMSU. As then-incumbent members of the House of Representatives, petitioners have standing to sue as legislators, more so as taxpayers and concerned citizens given the transcendental importance of the case.”