Thinking Out of The Box Saves Our 60-40 Oil Deal with China


by Adolfo Paglinawan, Part 2


We have shown how oligarchies conspired with the government of Noynoy Aquino in squeezing juicy deals from the government in order to feed their own unmitigated greed.


To pursue lawfare, the village idiot spent over one billion pesos to file an arbitral case against China, including $7 million dollars to hire American lawyers, and got nothing but a paper tiger of a ruling that has no prospect of enforcement whatsoever.


The election of President Rodrigo Roa Duterte provided a breath of fresh air providing commonsensical solutions to the problems created by his two predecessors. Not only did he set the arbitral ruling aside. The former mayor began friendly relations with our neighboring superpower.


On November 20, 2018, a Memorandum of Understanding was signed by the Philippines and China creating the framework for future talks on joint oil and gas exploration, “in accordance with the principles of mutual respect, fairness and mutual benefit, flexibility and pragmatism and consensus, through equal and friendly consultation.”


 It also stipulated the two governments have decided to negotiate on an accelerated-basis arrangements, consistent with applicable rules of international law.” Further, all negotiations under the MOU “will be without prejudice to the respective legal positions of both governments.” It also does not “create rights or obligations under international or domestic law.”


With this language, Teddy Boy Locsin was undoubtedly, way off-key in his allegations that Constitutional bar was preventing the fruition of the contract onto finality. Are we to say that Locsin’s brains is so frail and small, it cannot anticipate that if negotiations under the MOU will be with prejudice to the respective legal positions of both governments, the next condition will be a deadlock?


Why will China to accept an onerous service contract that makes her submit to an arrangement where that the project would be owned by the Philippines and subjected to Philippine laws, when the MOU already states that it cannot create rights or obligations under international or domestic law?


No wonder the Chinese objected. They smelled a rat.


The thinking the MOU requires is outside of the box of both countries’ domains.


In contrast, Locsin cannot think beyond Philippine jurisprudence. So eventually, he became a major part of the problem.


His role became that of a bull in a China shop, to strike an idiom. All of a sudden, he loaded the room with legalisms that would shutter all windows and doors instead of moving forward.


Locsin false-flagged the talks as “violative” of the Constitution, and former associate justice Antonio Carpio agreed, using only a portion of the Constitution that says “the exploration, development and utilization of natural resources shall be under the full control and supervision of the State, and that the State may directly undertake such activities…” 


But the rest of Section 2 of Article XII of the 1987 Constitution provides “… or may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least sixty percentum (60%) of whose capital is owned by such citizens…” Note the operative word “or”.


Only legal hacks like Locsin and Carpio would find it convenient to think within the confines of jurisprudence if it will not suit their clients’ favor – a condition reflex true to the canid family of the subspecies called Canis lupus familiaris.


But as they say it ain’t over until it’s over.


Noynoy Aquino’s Foreign Affairs Secretary Albert del Rosario, prods President Ferdinand Marcos Jr. to proceed with the oil and gas exploration and development in the West Philippine Sea, “without having to wait to restart joint exploration talks with China”.


In a not-so-subtle intrigue, Del Rosario said the country can take inspiration from Malaysia and Indonesia which sent drilling ships last year in their respective waters which, like the Philippines’ waters in the West Philippine Sea, are also contested by China. “Despite warnings and harassment from China, our neighbors proceeded with and completed their drilling,” he noted.


“Thus, Malaysia and Indonesia were able to assert their sovereign rights, without the benefit of an UNCLOS award and a mutual defense treaty with the US, like the Philippines,” Del Rosario added.


This insatiable greedy old sinophobe will say and do everything to spite China and provoke a conflict. So a few clarifications are necessary:


First, the United States cannot come into this picture because the Philippines would be the one initiating dissonance – the Mutual Defense Treaty only activates in case of an attack by a foreign power. We cannot use it as an instrument of offense; it does not operate when we seed the war.


Second, Malaysia and Indonesia are far from the so-called soft belly of mainland China which are the coastal areas fronting the East China Seas. That is why the dragon is a bit more tolerant of their recalcitrant behavior.


Third, where will you get cooperation that will give the people of the Philippines 60% share of the proceeds from a partnering State that fully funds the exploration?


Del Rosario’s parting divisive cabal parrots Locsin and Carpio: “The “legitimate pathway” for China’s participation in oil and gas exploration is “for China to acknowledge that the natural resources of the West Philippine Sea belong to Filipinos [to] allow Chinese companies to submit to Philippine laws in the exploration and development of [those] resources….”


With the conspiracy among the three stooges highlighted, their unabashed treason is exposed!  


As we speak, President Ferdinand Romualdez Marcos Jr. has already given the go-signal for the Philippines to “open new talks on oil and gas exploration.” Secretary Enrique Manalo validated this during the recent Commission on Appointments’ foreign affairs committee hearing.


On the side of China, Liu Jianchao, Minister of the International Department of the Communist Party of China and former Chinese ambassador to the Philippines earlier expressed hope that joint exploration talks would continue under the Marcos administration.


So let us proceed where Locsin, Carpio and Del Rosario sold us out.


Brilliant minds thinking out of a box must now intervene to find the light at the end of the tunnel of negativity. The legal framework here must be harnessed to find a solution to where the natural resource can serve the good of mankind, in this case for the benefit of our people.


This brings us therefore to the realm of “joint sovereignty” where rules are to be dictated precisely by bilateral negotiations, including whatever conflicts that may arise in the future.


There are what in international law are called “condominiums” – a political territory in or over which two or more sovereign powers formally agree to share equally dominium (in the sense of sovereignty) and exercise their rights jointly, without succumbing or dividing it up into ‘national’ zones.


Let us deal with some historical applications that I literally lifted from the work of Aditi Agar of the National University of Advance Legal Studies of Kochi, India:


1.) Sudan, for example, was under the condominium of Great Britain and Egypt from 1898 to 1955.


The Anglo–Egyptian agreement on Sudan was signed on 19th January 1899, by Lord Cromer, the British counsel-general in Egypt, and Boutros Ghali Pasha, the Egyptian minister of foreign affairs. Since Egypt itself was occupied by the British, the agreement legalized British control of Sudan and framed it as an Anglo-Egyptian rule and administration.


This condominium ended when the Sudanese Parliament voted a Declaration establishing Sudan as a fully sovereign republic in 1955 which was formally agreed to by Egypt and UK on 31st December.


2.) In some cases, one state exercises sovereignty which is, in law, vested elsewhere: as where territory is administered by a foreign power, with the consent of the owner state.


An example of this is when the Turkish island of Cyprus was under British administration from 1878 to 1914. Basically, in these instances there is a cession of territories for all practical purposes however under the law the territory still belongs to the former owner-state.


3.) Another exception is when the territory is leased or pledged by the owner-state to another foreign power. A state may lease part of its territory to another state on certain terms and conditions of the lease or pledge it to another foreign power for a loan.


The most famous example of this is “Chinese leases”. Hong Kong was leased to Great Britain by China for a period of about 99 years.


4.) The fourth case is when the use, occupation, and control of territory are granted by the owner-state to another state perpetually, to the exclusion of exercise of any sovereign rights over that territory by the grantor.


Literally speaking even federal states can be brought under this exception. In federal states different territories of single member states are collectively also the territory of the federal state and sovereignty is divided between a federal state and its member states.


5.) Lastly, there is the case of mandated and trusteeship territory. Here also the trustee state exercises most of the attributes of sovereignty over states that are not its own.


The Philippines and China need not copy an exact model of what it wants to achieve in the particular joint venture they want to perfect. Application may vary based on individuating notes coming from facts on the ground, uniquely translated into language that the party States can agree on.


I even suggest the name the “Philippines-China Reed Bank Condominium”!


Even before the inking of the Memorandum of Understanding, this matter was for all intents and purposes, already a done deal. The most difficult issue of profit-sharing has already been solved when China offered the Philippine to take the higher share of 60% of all proceeds of the project.


And best of all, the MOU does not specify the maritime areas to be covered. This means the deal is not limited to the Reed Bank and could cover anywhere the two countries have overlapping claims but common interests, and maybe even beyond.


Over this vital foundation, the overarching challenge left for the two treaty actors is to construct the suitable structure to finish this first condominium.


(To be continued)

<strong>Adolfo Quizon Paglinawan</strong>
Adolfo Quizon Paglinawan

is the anchor of Ang Maestro – the Unfinished Revolution at Radyo Pilipinas1, co-host of Opinyon Ngayon at Golden Nation Network Television, a political analyst, and author of books.

His third book, The Poverty of Power will soon be off-the-press. It is a historiography of controversial issues of spanning 36 years leading to the Demise of the Edsa Revolution and the Rise of the Philippine Phoenix. Paglinawan’s past best sellers have been A Problem for Every Solution (2015), a characterization of factors affecting Philippine-China relations, and No Vaccine for a Virus called Racism (2020) a survey of international news attempting to tracing its origins. These important achievements earned for him to be named one of the 2021 international laureates for the Awards for the Promotion of Philippine-China Understanding. Ado, as he called for short, was a former press attaché and spokesman of the Philippine Embassy in Washington DC and the Philippines’ Permanent Mission to the United Nations in New York. Facebook




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