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SC affirms unconstitutionality of 2005 oil exploration deal among PH, China, Vietnam
SC affirms unconstitutionality of 2005 oil exploration deal among PH, China, Vietnam
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 resolution made public last Feb. 15, the SC denied the motion for reconsideration filed by the Department of Foreign Affairs, Department of Energy, Philippine National Oil Company, and PNOC Exploration Corporation.
The full court resolution was written by Associate Justice Samuel H. Gaerlan, also the writer of the 2023 decision.
The petition against the JSMU was filed on May 21, 2008 by Bayan Muna Party-List Reps. Satur C. Ocampo and Teodoro A. Casino, Anakpawis Rep. Crispin B. Beltran, Gabriela Women's Party Reps. Liza L. Maza and Luzviminda C. Ilagan, and Reps. Lorenzo R. Tafiada III and Teofisto L. Guingona III.
In its 2023 decision, the SC dropped the now former President Gloria Macapagal Arroyo as one of the respondents since she was the incumbent President when the petition was filed in 2008.
In denying with finality the motion for reconsideration, the SC said:
“We reiterate Our pronouncement in Our Assailed Decision that for JMSU to be valid, it must be executed and implemented under any of the following modes under Section 2, Article XII of the Constitution: (l) directly by the State; (2) through co-production, joint venture or production-sharing agreements with Filipino citizens or qualified corporations; (3) through smalls-cale 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.
“For obvious reasons, JMSU does not fall into the first three modes since it involves foreign-owned corporations.
“We now focus on the fourth mode, which is an exception to the general rule that the exploration, development and utilization (EDU) of natural resources is reserved to Filipino citizens and corporations at least 60 percent owned by such citizens.
“The fourth mode is found in the fourth paragraph of Section 2, Article XII of the Constitution to wit: Section 2. The President may enter into agreements with foreign-owned corporations involving either technical or financial assistance for largescale exploration, development, and utilization of minerals, petroleum, and other mineral oils according to the general terms and conditions provided by law, based on real contributions to the economic growth and general welfare of the country.
“In such agreements, the State shall promote the development and use of local scientific and technical resources. The President shall notify the Congress of every contract entered into in accordance with this provision, within thirty days from its execution.
“Based on the foregoing, for an agreement/contract under the fourth mode to be valid, it must foremost be entered into by the President himself/ herself. The text of the provision is clear. Here, the President is neither a party nor a signatory to the JMSU. The contracting party is PNOC represented by its President and Chief Executive Officer.
“As eloquently stated by Chief Justice Alexander G. Gesmundo in his Separate Concurring Opinion to the Assailed Decision, neither the PNOC nor the DOE is authorized to enter into agreements pertaining to large-scale exploration of natural resources in the exclusive economic zone. Only the President is given such authority.
“For this reason alone, JMSU should be held unconstitutional. Additionally, We stated in Our Assailed Decision that the fourth mode is not restricted to Financial and Technical Assistance Agreements (FTAAs) but also pertains to service contracts albeit with safeguards to avoid the abuses prevalent under the 1973 Constitution. We then noted that JMSU does not qualify as an FTAA or a service contract.
“Even if JMSU is a service contract, it would be invalid since it was not signed by the President and was not reported to Congress within 30 days from its execution.
“All told, We affirm Our Assailed Decision declaring 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 Constitution.
“Wherefore, the motion is denied with finality. The Decision dated Jan. 10, 2023 declaring the Tripartite Agreement for Joint Marine Seismic Undertaking in the Agreement Area in the South China Sea by and among China National Offshore Oil Corporation and Vietnam Oil and Gas Corporation and Philippine National Oil Company unconstitutional and void is affirmed. So ordered.”