SC: JMSU case has ‘transcendental’ value

Finally, describing the case as of “transcendental importance,” the Supreme Court affirmed its Jan. 10, 2023 decision declaring as unconstitutional and void a tripartite agreement for Joint Marine Seismic Undertaking (JMSU), signed in 2005 by the Philippine government with the governments of China and Vietnam.

For three years, in pursuance of the JMSU, the three countries’ respective oil firms carried out exploration for oil and gas in an “Agreed Area” in the West Philippine Sea, of which about 80 percent was within the Philippines’ 200-mile exclusive economic zone.

This week, after almost 15 years, the tribunal acted positively on the petition questioning the agreement’s legality, filed in 2008 by a group of legislators in the House of Representatives, led by Bayan Muna. The petition mainly argued that any agreement such as the JMSU must abide by the provisions of the 1987 Constitution’s Section 2 of Article XII (National Economy and Patrimony).

Section 2 unequivocally states: “The exploration, development and utilization of natural resources shall be under the full control of the State.” Furthermore, it states:

“The State may directly undertake such activities, or it may enter into co-production, joint venture or production-sharing agreements with Filipino citizens, or corporations or associations at least 60 per centum of which capital is owned by such citizens.”

The Supreme Court ruled that the JMSU didn’t comply with this provision, because it allowed fully-owned foreign corporations of China and Vietnam to undertake joint exploration with the Philippines’ own exploration firms.

In January, I wrote in this space that a motion for reconsideration may have difficulty succeeding, given an overwhelming 12 majority vote that included Chief Justice Alexander Gesmundo. Yet, the government proceeded to seek a reconsideration of the ruling.

True enough, this week the SC en banc denied – with finality for lack of merit – the government’s motion for reconsideration. Flatly, the tribunal said the latest motion merely “repleaded the issues raised in comments and memorandums which the Court had already passed upon.”

Pointedly, the SC upheld the petitioners’ 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.”

As elected party-list members of the House then for Bayan Muna, Teodoro A. Casiño and I stood as lead petitioners in this case. Our co-petitioners were three other party-list colleagues: Crispin Beltran of Anakpawis, with Liza Maza and Luz Ilagan for Gabriela Women’s Party. Two other progressive legislators joined us, Reps. Lorenzo “Erin” Tañada III and Teofisto “TG” Guingona III. Our legal counsel then was Neri Javier Colmenares (who subsequently served three terms as Bayan Muna representative), aided by two newly-sworn in lawyers.

The respondents to our petition were then president Gloria M. Arroyo, executive secretary Eduardo Ermita and the then secretaries of foreign affairs and energy, plus the Philippine National Oil Company and the PNOC Exploration Corporation.

Pending release to the public of the final SC ruling, the Court’s Public Information Office issued a briefer on July 5. Among the salient points in the briefer are the following points:

• The JMSU was unconstitutional as it involved the exploration of natural resources. Since the objective of the JMSU, as stated in the Fifth Whereas clause, is “to engage in joint research of petroleum resources potential” in the Agreed Areas, the agreement clearly involved exploration.

• The respondents had contended that the JMSU did not involve exploration by attacking the definition of the term “exploration” under RA 387, arguing that it was already repealed by Presidential Decree 87 or the Oil Exploration and Development Act of 1972, among others. The tribunal dismissed the argument, pointing out that PD 87 does not provide a contrary definition for the term “exploration” and does not at all define the term.

• Reiterating its pronouncement in its Jan. 10 ruling, the SC stated 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.

The JMSU, the Court held, does not fall into the first three modes since it involves fully foreign-owned companies. For an agreement or 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 was neither a party nor a signatory to the JMSU and the contracting party was the PNOC.

• Further, the Court declared, the State (Philippine government) does not have full control and supervision under the JMSU. Under the JMSU’s Article 11.2 and 11.4, the PNOC illegally allowed joint ownership of information about Philippine natural resources in the Agreed Areas with China’s CNOOC and PetroVietnam.

The tribunal noted that under the agreement, the PNOC and/or the Government would even need the prior written consent of CNOOC and PetroVietnam before it could disclose any of the information required. The respondents had justified this by claiming that under the agreement, China, Vietnam and the Philippines would have equal rights, interests and obligations.

Clearly, then, the Supreme Court has very strong basis to reaffirm its declaration of the Joint Maritime Seismic Undertaking as “unconstitutional and void.” We Filipinos have the exclusive right to enjoy and use our own natural resources and patrimony. We expect government to protect this, because as taxpayers and concerned citizens, this is an issue of, indeed, “transcendental importance.”