The Supreme Court has denied with finality a tripartite partnership to explore a portion of the West Philippine Sea for oil and gas first approved during the Arroyo administration.
The High Court struck down due to lack of merit the appeal of its January 10, 2023 decision declaring as unconstitutional the Tripartite Agreement for Joint Marine Seismic Undertaking (JMSU) by China National Offshore Oil Corp. (CNOOC), Vietnam Oil and Gas Corp. (PetroVietnam), and the Philippine National Oil Company (PNOC).
The decision penned by Associate Justice Samuel H. Gaerlan was concurred in by 11 other magistrates. Associate Justice Amy C. Lazaro-Javier and Associate Justice Rodil V. Zalameda maintained their dissent, while Chief Justice Alexander G. Gesmundo was on official leave and did not take part.
In 2008, the parties had agreed to search an area in the South China Sea covering 142,886 square kilometers for possible petroleum and gas resources.
But in an en banc resolution, the SC junked the oil firms’ motion for reconsideration seeking to reverse its decision to void the JMSU since the issues raised have already been passed upon in its ruling in January.
Earlier, the High Court declared the joint search unconstitutional for allowing wholly-owned foreign corporations to participate in the exploration of the Philippines’ natural resources without observing the safeguards provided in Section 2, Article XII of the 1987 Constitution. Rey E. Requejo
In denying the appeal made by the government through PNOC, the SC reiterated that the JMSU is unconstitutional as it involves the exploration of natural resources.
It noted that since the objective of the JMSU as stated in its Fifth Whereas Clause is “to engage in a joint research of petroleum resource potential” in the Agreement Area, the agreement clearly involved exploration.
The tribunal also dismissed the government’s assertion that the JMSU does not involve exploration by attacking the definition of the term “exploration” under R.A. No. 387, arguing that it was already repealed by Presidential Decree (PD) No. 87 or the Oil and Exploration and Development Act of 1972, among others.
The SC held that PD No. 87 does not provide a contrary definition for the term “exploration” and does not at all define “exploration.”
The High Court reiterated its pronouncement in its January 10, 2023 decision 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:
(1) directly by the State; (2) through co- production, joint venture or production-sharing agreements with Filipino citizens or qualified corporations; (3) through small-scale 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.
It also held that 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 SC said, in a statement released by the Court’s Public Information Office.
The SC further held that the State has no full control and supervision under the JMSU.
It noted that under Articles 11.2 and 11.4 of the JMSU, the PNOC illegally allowed joint ownership of information about our natural resources in the Agreement Area with CNOOC and PetroVietnam.
According to the tribunal, the respondents’ claim that the State did not lose control and supervision over information about our natural resources crumbles in light of JMSU’s provision stating that the parties to the agreement shall have equal rights, interest, and obligations.
The SC stressed that under JMSU, the PNOC or the government would even need the prior written consent of CNOOC and PetroVietnam before it could disclose any of the information acquired.
The SC also held that it correctly took cognizance of the petition; hence, there was no violation of the hierarchy of courts. It added that Petitioners have legal standing to assail the legality of the JMSU.
As then-incumbent members of the House of Representatives, petitioners have standing to sue as legislators, more so as taxpayers and concerned citizens given the transcendental importance of the case.
The SC PIO will upload in the SC website a copy of the resolution once it receives the same from the Office of the Clerk of Court En Banc. Rey E. Requejo