Metro Manila (CNN Philippines, January 10) — The Supreme Court on Tuesday voided a 2005 agreement among state-owned oil companies of the Philippines, China and Vietnam to explore a 142,886-square kilometer area of the South China Sea.
Voting 12-2-1, the SC en banc declared the 2005 Tripartite Agreement for Joint Marine Seismic Undertaking (JSMU) 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 three state-owned firms are China National Offshore Oil Corporation (CNOOC), Vietnam Oil and Gas Corporation (PETROVIETNAM), and Philippine National Oil Company (PNOC).
Section 2, Article XII of the 1987 Constitution states that “the exploration, development, and utilization (EDU) of natural resources shall be under the full control and supervision of the State.”
In 2008, Bayan Muna Party List Representatives Satur Ocampo and Teodoro Casiño challenged the JMSU before the High Court, noting that the agreement violates the Constitution that mandates reserving “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.”
Signed in March 2005 in Manila under the term of President Gloria Macapagal-Arroyo, the three parties expressed through the tripartite agreement their desire to engage in joint petroleum research in a large area in the South China Sea as a “pre-exploration activity.”
Responding to the petition, the parties maintained that Section 2, Article XII of the 1987 Constitution was inapplicable as the JMSU only involves “pre-exploration activities.”
The SC, however, stressed that the parties calling the joint research 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,” the court said.
