Assert it or lose it

The story is correct: Antonio Carpio thinks the Duterte administration did the right thing in signing a memorandum to work out an agreement with a Chinese state-run company to develop gas reserves in the West Philippine Sea.

The views of the senior associate justice of the Supreme Court matter not only because he is an expert on the issue, but also because he was part of the team that successfully argued the Philippines’ case against China before the Permanent Court of Arbitration in The Hague.

It has been clarified that what was signed by the two countries in Manila last month, witnessed by President Duterte and his Chinese counterpart Xi Jinping, was a memorandum of understanding to come up with an MOU that will pave the way for a service contract between state-owned China National Offshore Oil Corp. (CNOOC) and Filipino private firm Forum Energy to extract natural gas from Recto or Reed Bank.

The bank is one of three areas in the South China Sea that the United Nations-backed arbitral court declared under international rules to be within the Philippines’ 200-mile exclusive economic zone (EEZ), over which the country has sovereign rights and exclusive maritime entitlements.

The other two areas are Ayungin or Second Thomas Shoal, where the rusty, war-vintage Philippine Navy landing craft Sierra Madre sits like a beached whale, guarding the country’s EEZ since 1999, and Panganiban or Mischief Reef off Palawan, said to be the most heavily fortified of China’s artificial islands in the Spratlys.

Another area, Subi Reef, was declared part of the territory of Pag-asa Island, which the Philippines administers as a barangay of Palawan. Panatag or Scarborough Shoal off Zambales, whose occupation by China following a standoff in 2012 prompted the Philippines to turn to international arbitration, was declared a common fishing ground over which no country can exercise control.

And yet the Chinese are in control of the shoal, with their maritime militias driving away whenever they see fit Filipino fishermen and pesky journalists.

Carpio believes that with the billions China has poured into creating an artificial island on Panganiban, it would be unrealistic to expect Beijing to abandon the reef anytime soon, even during the presidency of China-friendly Rodrigo Duterte.

So it’s significant that China has signed an MOU to come up with an MOU on the gas project. 

A service contract – if CNOOC agrees to it – would entitle the company to 50 percent of the profits from the natural gas project. But it would constitute recognition of Philippine sovereign rights over Recto Bank.

*      *      *

Carpio, who was our final guest for the year on One News / Cignal TV’s “The Chiefs” last Friday, told us that in 2013, CNOOC and Forum Energy had already discussed the commercial aspect of the gas project. But the talks fell through after China asked if it could collect taxes from the venture. Taxation is a sovereign act.

A joint exploration means CNOOC would have part control of the project, which is unconstitutional, Carpio explained. A service contract, on the other hand, will be similar to the venture in Malampaya with Shell, which is 90 percent foreign-owned.

If China agrees to a service contract under the MOU that is still being worked out, “in effect it will be admitting that we have sovereign rights. That’s why I like this,” Carpio told us.

Because the admission could set a precedent for China’s claims in the South China Sea, however, Carpio is unsure if the service contract will push through: “China could still walk back.”

But he says “you can’t eat sovereign rights,” and getting 50 percent of the income from the project could be easier for Beijing to sell to its people.

Xi’s presence at the signing of the MOU – considered a stamp of approval – can also make it tricky for Beijing to reverse what looks like a softening of its stance on the maritime dispute.

*      *      *

The aptly named Mischief Reef is a different story. “China is there as a squatter,” Carpio said, but stressed that Filipinos have to be realistic about the situation. The Chinese, he noted, won’t easily abandon a reef where they have poured in billions to create a fortified artificial island.

He favors the proposal of American marine ecologist John McManus, which is to declare a 50-year moratorium on all maritime claims and create marine protected areas in the South China Sea, to be jointly managed by a multinational team. This will be similar to a protected “marine peace park” in the Red Sea jointly managed by Israel and Jordan.

This will allow fish to thrive, with China the biggest beneficiary, since its 1.4 billion people consume 50 percent of all the fish caught in the South China Sea. In time, the Chinese can be convinced that this can be in their long-term best interest, Carpio said.

Even if maritime claims are suspended, he explained, the arbitral ruling will remain valid, as long as the Philippines doesn’t waive its victory, whether formally or by accident through a public statement.

Carpio warns that loose lips can sink this victory. Under international rules, if the president or the foreign secretary announces that the country is “setting aside” the arbitral ruling and China announces that it is accepting this, it will constitute a waiver on the part of the Philippines. Even if the president says the next day that something got lost in translation or he was simply joking, China’s acceptance would seal the waiver. A withdrawal of the waiver would have to be validated by the arbitral court.

Each year, Carpio said, the country must also do something to fortify its sovereign rights and victory. 

Can war erupt over the dispute? Carpio said this goes against the Constitution and the United Nations Charter, which also binds China. He stressed that even a verbal threat of waging war to settle a dispute will violate the UN Charter.

“War is never an option,” Carpio said.

*      *      *

No Merry Christmas: President Duterte is known for taking good care of soldiers and cops. It isn’t going to be a merry Christmas, however, for several retired Philippine National Police officers. They have been waiting for the past three months, some of them in wheelchairs, to get their salary differentials from the PNP Retirees/Benefit Service at Camp Crame. The office is blaming the PNP resident auditor for the delay; the Commission on Audit is blaming the PNP Directorate for Comptrollership. Those affected fear that the money is being withheld so the funds can continue to earn interest in the bank.