The Philippines and China will hammer out details of their “cooperation arrangement” on oil and gas exploration in the South China Sea by November next year, Philippine Foreign Secretary Teodoro Locsin Jnr said on Thursday.
He said he had personally inserted the deadline into a Memorandum of Understanding (MOU) signed by him and Chinese Foreign Minister Wang Yi on Tuesday, as Philippine President Rodrigo Duterte hosted Chinese President Xi Jinping for a two-day state visit.
The MOU says “the two governments will endeavour to agree on the cooperation arrangements within 12 months”, Locsin revealed, as he recited several passages from the two-page document during an interview with CNN Philippines on Thursday.
But he could not give out copies of the agreement just yet, he said.
“I’m going to ask [China’s] permission to release it. They trusted me enough to produce an MOU,” he said.
When pressed, he added: “As I said, I will release this when I get permission from China. Not that they are asking me to get permission but I think I owe it to China to have trusted me implicitly to write this as I wanted it.”
Locsin’s comments came after Philippine senators pressed Malacanang Palace to issue the signed document in the name of transparency. While both sides signed 29 agreements in total, the energy exploration arrangement has been the most controversial.
Maritime experts, legal scholars and fishermen were among those most concerned by Duterte’s willingness in recent months to accept Chinese Foreign Minister Wang Yi’s overtures and shelve the countries’ dispute over the South China Sea to focus on “joint development” of oil and gas resources.
Before Xi arrived, hundreds of protesters descended on the Chinese embassy in Manila to voice their opposition to the Duterte administration seeking closer ties with Beijing.
Acting Supreme Court Chief Justice Antonio Carpio told the South China Morning Post earlier that using the words “joint exploration and exploitation” in an agreement would be a violation of the Philippine Constitution.
“[The constitution] mandates that the state shall have ‘full control and supervision’ in the exploration and exploitation of natural resources.
Carpio, who helped build the Philippines’ case against Beijing over its claims in the South China Sea before the International Tribunal for the Law of the Sea, added: “‘Joint exploration and exploitation means China also has sovereign rights in the same maritime area”.
On Thursday, Locsin read out sentences that referred to “cooperation arrangements” with no mention of the word “joint” in reference to exploration. This was different from an earlier leaked draft, reportedly prepared by the Chinese side, that mentioned “joint exploration” seven times and “joint exploitation” once.
The signed MOU has a clause binding both parties to keep information, discussions and negotiations confidential.
CNN showed the first page of the document in a close-up shot and it begins by stating both countries will abide by the United Nations Convention on the Law of the Sea (UNCLOS) and the 2002 Declaration in the Code of Conduct of Parties in the South China Sea. It adds that the agreement “does not create rights or obligations under international or domestic law.”
This is in keeping with the joint statement that Duterte and Xi issued on Wednesday at the end of Xi’s state visit. Their statement said both sides were “committed to addressing disputes by peaceful means, without resorting to the threat or use of force, through friendly consultations and negotiations by sovereign states directly concerned, in accordance with universally recognised principles of international law, including the Charter of the United Nations and the 1982 UNCLOS”.
Locsin said “the heart” of the MOU was the creation of working groups that would involve government bodies and enterprises from each country. Their role was to recommend locations for oil and gas exploration and how profits should be shared.
Zhang Jie, an international relations researcher at the Chinese Academy of Social Sciences, said: “Regarding the share [each country takes] it should be possible to discuss it. We can infer this from the recent agreement between China and Myanmar on the Kyaukphyu port.”
China and Myanmar announced earlier this month that after more than two years of negotiations, the Myanmar government would reduce its stake in the US$1.3 billion deep-sea port project from 85 per cent to 70 per cent, giving China a larger share.
In the case of the Philippines, however, maritime expert Jay Batongbacal previously pointed out the Philippine Constitution stated the government could only enter into “production sharing agreements” with companies that were at least 60 per cent owned by Filipinos.
The only way to give China the bigger share was by amending the Constitution, he said.
Locsin hinted during his CNN interview that “domestic law could change…that is for our legislature [to decide].” Allies of President Duterte have been pushing for Congress to change the present Constitution and have it approved through a plebiscite, though senators insist the attempt would be “dead on arrival” at the Senate.
For its agreement with Manila, Beijing has nominated China National Offshore Oil Corporation as its enterprise representative in the working groups.
Li Guoqiang, director of the Institute of Chinese Borderland Studies at the Chinese Academy of Social Sciences, said the MOU meant the two countries had “confirmed their common intention”.
“The concrete details, I feel, are not political issues, and are issues for companies, and petroleum [related] departments, to discuss,” he said.
“This is an agreement between two governments, but the details are not for the governments to deal with, they are for companies to realise. This will require a process.”
Regarding a timeline for the projects, Li added: “The two political leaders have just made their agreement, and of course starting these projects is extremely important, so I believe [it] will not be long.”
With additional reporting by Keegan Elmer
Palace Com doesn't care if it is a Chinese draft? I fu*k*n* care! A framework or architecture for gas and oil in our part of the sea demands the draft be MINE…MIO…FILIPINO. But China pointed out I forgot to insert the name of the participants. I'm sparing of words. Accepted.— Teddy Locsin Jr. (@teddyboylocsin) November 20, 2018