The Supreme Court (SC) has affirmed the constitutionality of the Japan-Philippines Economic Partnership Agreement (JPEPA), a bilateral trade and investment accord that was signed by the heads of the two countries in 2006 and ratified by the Philippine Senate in 2008.

In a decision made public on Wednesday, Jan. 24, the SC dismissed for lack of merit two petitions challenging the constitutionality of JPEPA that was signed by then President Gloria Macapagal Arroyo and former Japanese Prime Minister Junichiro Koizumi.

Among other things, the JPEPA provides that the two countries agreed to give national treatment and most-favored-nation treatment to investors of each Party.

In its briefer issued in 2008 upon ratification, the Senate said that “Japanese investors in the Philippines would be accorded the same privileges and rights as Filipino investors in economic sectors where they are allowed and vice-versa.”

The first petition against JPEPA was filed by the Initiatives for Dialogue and Empowerment Through Alternative Legal Services, Inc. (IDEALS, Inc), Alliance of Progressive Labor (APL), Ecological Waste Coalition of the Philippines, Mother Earth Foundation, Concerned Citizens Against Pollution, Fisheries Reform, Kilusan Para sa Pagpapaunlad ng Industriya ng Pangisdaan, Philippine Workers Alliance.

The second petition was filed by the Fair Trade Alliance, Automotive Industry Workers Alliance and several lawmakers and former senators.

The SC consolidated the two petitions into one case which named as respondents the senators of 14th Congress that ratified the agreement and several members of the then Arroyo cabinet.

The petitioners claimed that JPEPA violates several provisions of the Constitution which guarantee people’s right to health and to a balanced healthful ecology; compel the government to protect and reserve the use of the nation’s marine wealth and its archipelagic waters and exclusive economic zone exclusively to Filipino citizens.

They also alleged that the agreement violates constitutional provisions that reserve certain sectors of economic activities to Filipinos and mandate the government to pursue trade policies that serve the general welfare.

Among other issues, the petitioners claimed that JPEPA is a one-sided agreement that violates Section 13, Article XII of the Constitution which mandates that “the State shall pursue a trade policy that serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality and reciprocity.”

They also alleged that the agreement “is grossly unfair and disadvantageous” to the Philippines because Japan as a developed country, with less economic vulnerabilities than the Philippines, would have a wider exclusion list.

Also, they claimed that the agreement is null and void as it encroaches on the power of the legislature to enact measures.

In a full court decision written by Senior Associate Justice Marvic M.V.F. Leonen, the SC ruled that the petitions “have no merit.”

Among the discussions in the 95-page decision, the SC said that on allegation that JPEPA violates Article XII, Section 2 of the Constitution for failure to reserve the limitations on the use and exploitation of land and natural resources, as well as use and enjoyment of marine resources in Philippine waters, the limitation imposed by the constitutional provision has been protected in the Philippine list of reservations.

“The same applies to petitioner's claim that the JPEPA transgresses Article XII, Section 7 of the Constitution on private land ownership,” it said. 

On petitioners’ claim that reservation on matters of private land ownership is inadequate as it only covers the manufacturing sector, and that foreign corporations engaged in businesses other than manufacturing may be allowed to own private lands, the SC said that JPEPA provides for the reservation on matters relating to private land ownership.

“Granted that the reservation's sector element only states ‘manufacturing,’ the reservation should be read as a whole, with the measure element prevailing over the other elements. Akin to Reservation No. 17, Reservation No. 3 has for its measure element Article XII of the Constitution, which embodies the mandate of ensuring the protection and conservation of our national economy and patrimony,” it stressed.

“Accordingly, there is no merit in petitioners' contentions that the JPEPA violates Article XII, Sections 2 and 7 of the Constitution,” it said.  

On the alleged violation of Article XII, Section 14 of the Constitution which reserves to Filipino citizens the practice of all professions in the country, the SC pointed out that while the Constitution made such restriction “the rule is subject to exceptions introduced by law.”

“A perusal of the specific commitments made by the Philippines on the practice of these professions shows that adequate reservations have been made both for market access and national treatment,” the SC said.

On the protection of the Filipinos rights to health and to a balanced and healthful ecology, the SC said that JPEPA “does not facilitate the indiscriminate importation of hazardous and toxic wastes into the Philippines.”

“The JPEPA acknowledges that the parties are entitled to adopt and implement policies necessary to protect the health of their people and the environment,” it said.

On the alleged insufficient consultations with stakeholders before the signing of JPEPA and its ratification, the SC said “these are questions of fact that require a formal trial” and “this is especially since respondents counter that numerous public hearings and meetings with different government agencies were conducted to ascertain the view of the general public.”

“Accordingly, the Petitions for Certiorari and Prohibition are dismissed for lack of merit,” the SC ruled.