Can the Philippines pursue joint venture with China in the West Philippine Sea?

MANILA, Philippines — Joint oil and gas exploration in the West Philippine Sea may be brought up in the next bilateral consultation mechanism between the Philippines and China next month.

When the first meeting was held in China's Guizhou province in May 2017, Chinese Vice Foreign Minister Liu Zhenmin said that Beijing is hoping that there would be some joint development in gas and oil before the maritime disputes are finally settled.

During his visit to the Philippines in November 2017, Chinese Premier Li Keqiang said that China is open to actively explore joint development to make the disputed South China Sea "a sea of cooperation and friendship."

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A joint exploration, however, would entail lifting the moratorium on all exploration and drilling work in the area that the Aquino administration issued due to rising tension with China.

President Rodrigo Duterte earlier said that he is open to lifting the moratorium as long as the "highest interest of the country" is served.

A joint development is an arrangement between states with overlapping maritime claims to develop and share resources within the disputed area.

For the disputed area in the West Philippine Sea or South China Sea, pursuing a joint development would strengthen China's claim and weaken that of the Philippines following the July 2016 ruling of the United Nations-backed tribunal on the disputed waters.

The arbitral ruling invalidated China's nine-dash line claim and ruled that Beijing violated its commitment under the UNCLOS by exploiting resources within the Philippines' exclusive economic zone (EEZ).

Hence, a joint development cannot be pursued between the Philippines and China due to the lack of the element of "disputed areas," according to the Asia Pacific Pathways to Progress Foundation, Inc. (APPFI).

In a commentary published in December 2017, APPFI program assistant Philip Vincent Alegre said that pursuing a joint development with China would disregard the arbitral ruling as this would make the area within the country's EEZ disputed.

"This would mean that claimant countries are willing to freeze their sovereignty claims in the disputed area in order to both benefit from the lying resources. Because JD, by its very nature, does not prejudice future boundary delimitation initiatives, it makes it easier to shelve other aspects of a dispute" Alegre said.

Meanwhile, the Department of Foreign Affairs and Department of Energy have been working to lift the moratorium on joint exploration in the West Philippine Sea.

Duterte is yet to approve a joint venture among state-run Philippine National Oil Corporation, Jadestone Energy Inc. and China's state-owned China National Offshore Oil Co. This joint venture, which has been pending since 2008, involves exploration in the country's oil fields in the northwest Palawan block.

The deal, however, is in a non-disputed area and is projected to be a good confidence-building measure between state-owned companies from the two countries.

"In the meantime, both sides can help build mutual confidence of their respective stakeholders by making sure that all deals are done through the right processes, upholding transparency," Alegre said.

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