The Supreme Court (SC) on Tuesday declared as unconstitutional the tripartite agreement for Joint Marine Seismic Undertaking (JMSU) entered into by the Philippine government with China and Vietnam during the term of President Gloria Macapagal-Arroyo in 2005.
Under the JMSU, which expired in 2008, the Philippines, China and Vietnam through their respective national oil corporations agreed to conduct joint explorations of the disputed South China Sea covering 142,886 square kilometers (agreement area).
However, up to 80 percent of the JMSU site is within the Philippines’s 200-mile exclusive economic zone, prompting the filing of petitions seeking to declare the agreement as unconstitutional.
Voting 12-2-1, the Court en banc ruled that the JMSU is 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 said provision mandates that the exploration, development, and utilization (EDU) of natural resources shall be under the full control and supervision of the State.
Then Bayan Muna Party-List Representatives Satur C. Ocampo and Teodoro A. Casiño, et al. along with former Senator Teofisto Guingona III filed the petition before the SC in 2008 assailing the constitutionality of the agreement.
Petitioners argued that the JMSU was illegal as it allowed foreign corporations wholly-owned by China and Vietnam to undertake large-scale exploration of the country’s petroleum resources, in violation of the of the Constitutional provision which reserves the EDU of natural resources to Filipino citizens, or corporations or associations at least 60 percent of whose capital is owned by such citizens.
They added that even if the agreement is merely for a pre-exploration activity, it is clear that all the data and information acquired in the implementation of the agreement shall be jointly owned by the parties, which is a clear proof that the Philippines has conceded or forfeited its ownership over the country’s petroleum and other mineral oils.
Furthermore, the petitioners said the respondents compromise its claim over the disputed Spratly Group of Islands by allowing the implementation of the said tripartite agreement.
The agreement covers 6 islands claimed and occupied by the Philippines in Spratly such as Pag-asa Island, Likas Island, Lawak Island, Kota Island, Patag Island and Panata Island.
Named respondents in the petition were then president Gloria Macapagal-Arroyo, her executive secretary Eduardo Ermita, her Foreign and Energy secretaries as well as the Philippine National Oil Co. (PNOC) and the PNOC-Exploration Corp.
The Court, noting that the term “exploration” pertains to a search or discovery of something in both its ordinary or technical sense, ruled that the JMSU involves the exploration of the country’s natural resources, particularly petroleum.
Citing the text of the fifth whereas clause of the JMSU, which states the 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,” the Court said that 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,” the Court said in a decision penned by Associate Justice Samuel H. Gaerlan
“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 added.
The Court further held that as the JMSU involves the exploration of the country’s petroleum resources, it falls within the ambit of Section 2, Article XII of the 1987 Constitution.
Chief Justice Alexander G. Gesmundo and 10 other Associate Justices concurred with the ruling. Associate Justice Amy C. Lazaro-Javier and Associate Justice Rodil V. Zalameda dissented, while Associate Justice Ramon Paul L. Hernando was on leave and did not take part.