The Supreme Court of the Philippines has rejected the three-way deal with China and Vietnam signed in 2005 as unconstitutional.
The joint marine seismic undertaking (JMSU) involved China National Offshore Oil Corp. (CNOOC), Petrovietnam, and Philippine National Oil Co. (PNOC). The are involved 142,886 square km in the South China Sea.
The court ruling follows on from a decision in January 10 this year.
The JMSU is “unconstitutional as it involves the exploration of natural resources”, the statement said. It allowed foreign owned corporations to explore the Philippines natural resources without observing safeguards from the constitution.
The Supreme Court also found it had no “full control and supervision under the JMSU”. The deal meant “PNOC illegally allowed joint ownership of information about our natural resources in the Agreement Area with CNOOC and Petrovietnam”.
For PNOC to provide information to the state on the area, it would require approval from CNOOC and Petrovietnam. This, the Supreme Court said, was unacceptable.
The case was Bayan Muna Party-List Representatives Satur C. Ocampo and Teodoro A. Casiño, et al. [Petitioners] v. President Gloria Macapagal-Arroyo, et al. [Respondents] (G.R. No. 182734).
There have been problems in the JMSU area in recent years. Chinese vessels have rammed Filipino fishing boats in the zone.
The JMSU includes an area known as Reed Bank, which may hold oil and gas resources. Reed Bank is within the Philippines’ exclusive economic zone (EEZ), but also lies within China’s claimed territory, under its famous “nine-dash line”.
A report on the JMSU from the Center for Strategic and International Studies (CSIS) in 2010 said the JMSU came about following a rift between the US and Philippines. China seized an opportunity and made a number of loan commitments.
“It may never be known whether the JMSU was presented as a quid pro quo for China’s other support in the Philippines, but the timing of the agreement – March 2005 – suggests it was signed at a time when Chinese influence was peaking in Manila,” the CSIS report said.
As the Filipino president’s approval rating sank, though, the JMSU was in danger. In 2010, the Philippines passed a law restricting future agreements like the JMSU.