The Supreme Court affirmed for lack of merit two consolidated petitions assailing the constitutionality of the controversial Japan-Philippines Economic Partnership Agreement (JPEPA) during the term of former President Gloria Macapagal-Arroyo, which the Senate ratified in 2008
In a 93-page en banc decision dated June 13, 2023, but released to the public on Wednesday, Jan. 24, the SC magistrates, voting 14-0, upheld the constitutionality of the agreement and rejected the claim of the petitioners.
The consolidated petitions named senators of the 14th Congress, who approved the agreement as well as several Arroyo cabinet members, as respondents.
The Initiatives for Dialogue and Empowerment Through Alternative Legal Services, Inc. (IDEALS, Inc), Alliance of Progressive Labor (APL), Ecological Waste Coalition of the Philippines, Mother Earth Foundation, Concerned Citizens Against Pollution, Fisheries Reform, Kilusan Para sa Pagpapaunlad ng Industriya ng Pangisdaan, Philippine Workers Alliance filed the first petition.
The first petition claims, among others, that the JPEPA violates the people’s right to health and to a balanced ecology under the Constitution, along with other laws and international commitments, by allowing the indiscriminate importation of toxic and hazardous wastes into the Philippines.
The Fair Trade Alliance, Automotive Industry Workers Alliance and several lawmakers and former senators filed the second petition. They argued that the agreement defies constitutional provisions reserving certain sectors of economic activities to Filipino citizens and specific juridical entities.
The petition also claims that the Philippines’ commitments under the JPEPA, specifically to give Japanese investors national treatment, among others, violate the Constitution and numerous Philippine laws imposing nationality requirements.
The second petition also asserts there is a gross imbalance in the parties’ agreement on tariff concessions, making the JPEPA an inequitable agreement that grossly disadvantages the Philippines while greatly favors Japan.
The petitioners assailed the agreement one-sided, which violates Article 12, Section 13 of the Constitution, which mandates that the State shall pursue a trade policy that serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality and reciprocity.
They noted that the JPEPA liberalizes trade in goods in a one-sided way, as the Philippines opens its market for Japanese goods by reducing 98 percent of its tariff lines, while Japan will only eliminate tariff duties on 90 percent of its tariff lines.
The petitioners said the agreement “is grossly unfair and disadvantageous” to the Philippines because Japan as a developed country, with less economic vulnerabilities than the Philippines, would have a wider exclusion list.
They argued that the treaty is null and void as it encroaches on the power of the legislature to enact measures.
They claimed that Sections 401 and 402 of the Tariff and Customs Code, on which Arroyo had relied to reduce the tariffs on goods imported from Japan, are unconstitutional for being invalid delegations of legislative power.
In denying the petitions, the High Court ruled that the JPEPA does not facilitate the indiscriminate importation of hazardous and toxic wastes in the Philippines. The agreement acknowledges that the parties are entitled to adopt and implement policies necessary to protect the health of their people and their environment.
The JPEPA also reaffirms the Philippines’ and Japan’s rights and obligations under the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal. The SC, therefore, ruled that the petitions “have no merit.”
On the claim that the JPEPA violates Article 12, Section 2 of the Constitution for its failure to reserve the limitations on the use and exploitation of land and natural resources, as well as use and enjoyment of marine resources in Philippine waters, the SC said it agrees with the respondents that the limitation imposed by the said provision has been protected in the Philippine list of reservations.
“The same applies to petitioner’s claim that the JPEPA transgresses Article [12], Section 7 of the Constitution on private land ownership,” the SC said in a decision penned by Associate Justice Marvic Leonen.
The petitioners argued that the reservation on matters of private land ownership is inadequate as it only covers the manufacturing sector. They fear that foreign corporations engaged in businesses other than manufacturing may be allowed to own private lands in violation of the Constitution.
But the SC noted that the agreement provides for the reservation on matters relating to private land ownership.
“Granted that the reservation’s sector element only states ‘[m]anufacturing[,]’ the reservation should be read as a whole, with the measure element prevailing over the other elements. Akin to reservation no. 17, reservation no. 3 has for its measure element Article [12] of the Constitution, which embodies the mandate of ensuring the protection and conservation of our national economy and patrimony,” the High Court stressed.
“Accordingly, there is no merit in petitioners’ contentions that the JPEPA violates Article [12], Sections 2 and 7 of the Constitution,” it said.
On the contention that the constitutional limitation concerning the operation of public utilities was not included in the schedule of reservations, thus, enabling Japanese investors to own more than 40 percent of a public utility, the SC stressed that no liberalization commitment was made based on its review of the Trade in Services Chapter of the agreement.
On the supposed violation of Article 12, Section 14 of the Constitution, which reserves to Filipino citizens the practice of all professions in the country, the SC said that while the Constitution made such restriction “the rule is subject to exceptions introduced by law.”
“A perusal of the specific commitments made by the Philippines on the practice of these professions shows that adequate reservations have been made both for market access and national treatment,” the SC declared.
On the petitioners’ argument that the JPEPA violates Article [2], Sections 15 and 16 of the Constitution, which provide for the people’s rights to health and to a balanced and healthful ecology, the SC ruled that the agreement “does not facilitate the indiscriminate importation of hazardous and toxic wastes into the Philippines.”
“The JPEPA acknowledges that the parties are entitled to adopt and implement policies necessary to protect the health of their people and the environment,” the SC pointed out.
As to the petitioners’ claims that the government made insufficient consultations, and that the JPEPA failed to account for the position of various stakeholders, the SC said “these are questions of fact that require a formal trial.”
“This is especially since [the] respondents counter that numerous public hearings and meetings with different government agencies were conducted to ascertain the view of the general public. This Court is no trier of facts,” it ruled.
The High Court also said that the JPEPA, which includes an Annex listing the measures that Japan and the Philippines excluded from the coverage of their commitments, sufficiently protects the constitutional mandate on both ownership and exploration, development, and utilization of natural resources.
The same measures embody the mandate of ensuring the protection and conservation of our national economy and patrimony, the SC said.
The high tribunal also held that while the Philippines committed to grant market access through commercial presence to certain public utility sectors, this commitment is subject to the limitation on ownership of public utilities by foreign entities imposed under Article 12, Section 11 of the Constitution.
“Neither does the JPEPA violate the constitutional restriction to Filipino citizens of the practice of profession, as adequate reservations have been made in the Agreement, both for market access and national treatment,” the SC said.
With these limitations stated in the JPEPA, the SC noted that the Philippines and Japan are mandated to ensure that the constitutional restrictions on foreign equity participation shall always be followed, particularly when services are supplied through commercial presence.
As to the wisdom of the decision to reduce or eliminate tariff duties on some Philippine tariff lines, the Court ruled that this is a matter of foreign relations, over which the Constitution has given authority to the political branches.
The SC also emphasized that the authority to manage the country’s external affairs and shape foreign policy, which includes the power to negotiate and enter into treaties, is solely bestowed on the President, who represents the country in all external relations.
JPEPA is an economic partnership agreement between Japan and the Philippines concerning bilateral investment and free trade. It was signed in Helsinki, Finland on Sept. 9, 2006 by then Japanese Prime Minister Junichiro Koizumi and President Arroyo.