Palace eyes U-turn
on Spratly Deal 2
Binay: Review an admission
of agreement's infirmities

BY REGINA BENGCO

A MALACAÑANG legal team is studying whether to push through with the 2005 Joint Marine Seismic Undertaking (JMSU) agreement with China and Vietnam on the disputed South China Sea.

Chief presidential legal counsel Sergio Apostol said the study was prompted by the "political noise" that President Arroyo might have committed treason by allowing the joint exploration of the disputed islands in exchange for loan agreements worth billions of dollars from China.

"That is what the political noise tends to do, tie the hands of the government. This is the crab mentality working. The economy of this country is very progressive but some people are pulling us down," he added.

The legal team includes Apostol, Justice Secretary Raul Gonzalez, Solicitor General Agnes Devanadera and government corporate counsel Alberto Agra.

Apostol said the Exploration Corp. of the Philippine National Oil Co. (PNOC-EC) asked for the review, which started last week.

He said the first phase of the JMSU, which would cover around 11,000 square kilometers, expires June 30 and government is mulling whether to go on to the second phase, which is in another area of the Spratly islands.

He insisted that "there is no legal problem" with the JMSU because the agreement only provided for seismic study and data gathering.

Executive Secretary Eduardo Ermita said the Energy department has not given any position or assessment on the JMSU.

Ermita said aside from the Philippines, China and Vietnam are also reviewing the JMSU.

The JMSU, which was signed in 2005, involves the PNOC, the China National Offshore Oil Co. (CNOOC) and Vietnam Oil and Gas Corp. (PetroVietnam).

Of the total 142,886 kilometers targeted for seismic study, around 24,000 square kilometers belongs to the Philippines and falls outside the areas in the Spratlys which are claimed either in whole or in part by the Philippines, China, Vietnam, Taiwan, Indonesia and Brunei.

The area also swallows almost 80 percent of the Kalayaan Group which the Philippines claims.

Makati Mayor Jejomar Binay said the reported plan to scrap the JMSU is a tacit admission that there are infirmities in the agreement, which could impact politically on the administration.

"The reported plan to scrap the so-called Spratly deal came amidst mounting calls for a Senate investigation, and warnings from the opposition that Mrs. Arroyo may have committed treason by entering into an agreement that allows China to explore Philippine waters for oil and gas," he said.

Binay said media reports are now unraveling the extent of the "excessive and treasonous concessions" given by the Arroyo administration to China. These include six islands occupied by the Philippines in the Spratlys, and an area that is clearly inside Philippine territory.

"With each day, the description of the Spratly deal as an act of treason gains further credibility," he said.

Malaya publisher Amado Macasaet, in an article, has said President Arroyo could be liable for treason, a ground for impeachment, for signing the tripartite agreement in exchange "for loans attended by bribery and corruption."

Because of the political consequences, Binay said the Arroyo administration apparently intends to use the same exit strategy it employed at the height of the controversy over the ZTE-NBN broadband deal. The ZTE project is funded by a loan from China.

Binay described the Spratly deal as a "kickbacks for oil" deal, which surrenders Philippine sovereignty.

"Scrapping the deal will not absolve the Arroyo administration of possible criminal liabilities, including treason," he said.

Binay said former PNOC president Eduardo Mañalac should be asked to confirm reports that presidential spouse Mike Arroyo had a hand in his departure from PNOC.

"Did he really displease Mike Arroyo because he stepped on the toes of cronies? Mr. Mañalac should be given the opportunity to answer this question," he said.

COMPROMISED

Rep. Roilo Golez (Ind., Parañaque) twitted Malacañang for saying it had nothing to do with the signing of the Spratly deal "because the agreement was signed by the Philippine National Oil Co. "under the authorization of the Philippine Government."

"It is not correct for chief presidential legal counsel Sergio Apostol to say that Malacañang had nothing to do with the agreement. The questions now are: Who signed the Philippine government authorization? How was the authorization worded? Where is that document?" said Golez, the principal sponsor of the House inquiry on the tripartite agreement.

He also asked: "Why was 24,000 square kilometers of undisputed Philippine territory included? That is an assault on our territorial integrity."

Golez also said if it is true that an affiliate of the China National Offshore Oil Co. won the survey contract, "China now controls the gathering, analysis and storage of strategic data on possible natural resources in the area, most of which are claimed or undisputedly owned by the Philippines."

"I doubt whether the Philippines has full access to such strategic information. Our country's national security has no doubt been compromised," he said.

Golez said the government should disclose what Annex A of the tripartite agreement says about the location of the survey area and why the survey area is only in the vicinity of the Philippines and not in the vicinity of Vietnam in the east and vicinity of China in the north.

"The devil is the details," he said. "That makes the area a Zone of Concession to the prejudice of Philippine interests."

At its farthermost eastern edge, the survey area is around 25 kilometers from the southern tip of Palawan while the northern boundary is alongside the Malampaya oil field and includes an area the Philippines had long awarded to a British company for oil exploration.

The company, Forum Energy plc (Forum), reportedly bought a counterpart Filipino company, Basic Petroleum and Minerals Inc. (BPMI) which was renamed to Basic Petroleum Corp. (BPC).

Reports said businessman Jose "Joey" de Venecia and his uncle Oscar de Venecia were elected to the board of BPC.

ABOVEBOARD

Mañalac, in a press conference, confirmed that then chief presidential legal counsel and now Ombudsman Ma. Merceditas Gutierrez had reservations about the tripartite agreement.

Mañalac disclosed that it had something to do with the word "exploration."

He said Gutierrez' concern was resolved "when we limited it (agreement) to just seismic work."

Mañalac effectively confirmed the earlier statement of former Justice Secretary Franklin Drilon that Gutierrez sought his help in justifying the tripartite agreement as its approval could be a ground for the impeachment of President Arroyo.

Mañalac said the JSMU is "aboveboard and technically sound."

He said as a co-signatory to the agreement, he is in a position to know that it would not affect the country's claim to the disputed Spratly islands.

As to the claim that the areas to be covered by the seismic study would overlap that of the country's 200-mile Exclusive Economic Zone (EEZ), all Mañalac could say was it is still a disputed area.

He added that it is still not clear where the country's EEZ started.

Mañalac said the agreement would not infringe on the country's sovereignty as it was only a joint seismic study and for exploration purposes.

RESEARCH STUDY

Mañalac said that after the data is gathered and interpreted, the Philippines, China, and Vietnam would have to sign a new agreement.

"That is the agreement which must be constitutional, legal. Because that is when we will drill for oil, how we will share and divide it, who will pay taxes," he said.

"We have different laws in each of these nations. So we have to have one agreement that will conform to each and every government's laws," Mañalac said.

Mañalac said the agreement does not take up the conflicting territorial claims of the Philippines, China, and Vietnam.

Mañalac said the JMSU is a "confidence-building measure" which could lead to a major oil or gas find.

He said it was better for the three countries to share in the oil or gas finds than to just let these energy resources stay untapped.

Mañalac said the Philippines does not have he money for oil exploration.

If oil or gas is found, he said, the Philippine government only has to ensure the 60 percent government share in royalties from the income of the project.

He said Philippine law allows 100 percent foreign ownership in oil exploration, but it must be 60-40 percent sharing in favor of government in the royalties.

VERY ENCOURAGING

Mañalac said it would be good if the JMSU is taken to its next step - drilling for oil or gas - since the money invested in the seismic survey would be put to waste if the project is not pursued.

Mañalac said the initial results of the seismic survey were "very encouraging." They showed "potential prospects" for oil or gas drilling.

At the same time, Mañalac acknowledged that the public disclosure of the map would help determine if the JMSU between the three countries violated the Philippine Constitution or any law.

"I, for one, encouraged the Department of Energy Philippine National Oil Corporation to release the map," he said.

The PNOC refused to disclose the map, citing a confidentiality agreement among the three countries.

Lawyer Harry Roque, an expert on maritime laws, said under international laws," colonial boundaries are conclusive."

Under Philippine boundaries set by the Treaty of Paris in 1898, the JMSU intrudes into the country's Exclusive Economic Zone extending up to 200 miles offshore whereby the coastal state would have sovereign rights over the natural resources such as fish and minerals and all other economic activities and also jurisdiction with regard to scientific research and environmental preservation.

RIDICULOUS

The House committee on foreign affairs chaired by Antonio Cuenco (Lakas, Cebu) is set to start the hearing on the Spratly deal Thursday as requested by Golez.

Kampi Rep. Luis Villafuerte of Camarines Sur said Golez should clarify whether the investigation is aimed toward allegations of treason against the President.

"Nobody is declaring war on anybody and giving aid and comfort to enemy," he said, quoting the Constitution and the Revised Penal Code.

"It is ridiculous, sowing any implication of treason," Villafuerte said.

Rep. Teodoro Locsin Jr. (PDP-Laban, Makati) said the crime of treason can refer to the common law crime of "high treason" which he said means "dishonesty to the republic."

"Yes, treason is a proper subject of inquiry," he said, noting this could be a subject of an impeachable offense against the President.