SC affirms decision: PH oil deal with China, Vietnam unconstitutional
MANILA, Philippines — The Supreme Court affirmed on Wednesday its decision last Jan. 10 to declare as void and unconstitutional the Philippines’ oil exploration deal with China and Vietnam, the court’s Public Information Office (PIO) said on Wednesday.
The oil exploration deal — called the Joint Marine Seismic Undertaking, or JMSU — was made in 2005 during the administration of then-President Gloria Macapagal Arroyo between the Philippine National Oil Company and the China National Offshore Oil Corp. and the Vietnam Oil and Gas Corp.
The court sitting en banc denied with finality due to lack of merit a motion for reconsideration of its Jan. 10 decision.
“The Court held that the motion for reconsideration merely repleaded the issues raised in the comment and memorandum, which the Court had already passed upon in the assailed Decision,” the PIO said.
“The assailed Decision 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,” it added.
Article continues after this advertisementAs in the original decision, the court stressed that JMSU is unconstitutional “as it involves the exploration of natural resources.” It noted that the JMSU itself stated in its objective was “to engage in a joint research of petroleum resource potential.”
Article continues after this advertisementCiting its previous pronouncement, the court noted 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:
- directly by the state through co-production, joint venture, or production-sharing agreements with Filipino citizens or qualified corporations
- through small-scale utilization of natural resources by Filipino citizens
- through agreements entered into by the president with foreign-owned corporations involving technical financial assistance for large-scale exploration, development, and utilization of minerals, petroleum and other mineral oils
The court said the JMSU “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,” it added.
Associate Justice Samuel Gaerlan wrote the resolution and was concurred with by 11 other associate justices.
Associate Justice Amy Lazaro-Javier and Associate Justice Rodil Zalameda maintained their dissent, while Chief Justice Alexander Gesmundo was not able to take part as he was on official leave.
In its Jan. 10 decision, the SC en banc also voted 12 for and two against declaring the deal void and unconstitutional, with one abstaining.
The Philippines has been in a long-running maritime dispute with China, which has been insisting that it owns the whole South China Sea — including portions of the West Philippine Sea.
In 2016, the Permanent Court of Arbitration validated the sovereign rights of the Philippines in the West Philippine Sea and invalidated China’s nine-dash line claim.
Still, China refused to recognize the decision and continued to ignore protests and demands made by the Philippine government for Chinese vessels to leave the West Philippine Sea.
