Carpio warns Philippines against oil deal with China

Former Supreme Court associate justice Antonio Carpio warned that the Philippines must reject any joint oil and gas exploration deal with China that recognizes Beijing’s ownership of resources in the West Philippine Sea, saying such an arrangement would violate the Constitution and undermine the country’s legal victory in international arbitration.

Carpio said China’s definition of “joint development” effectively requires other countries to acknowledge Chinese ownership of oil and gas resources before participating in exploration projects.

“For the Chinese, joint development means they own the oil and gas, but out of friendship they allow other countries to participate in developing the gas or oil field,” Carpio said in a television interview..

“That kind of joint development where we acknowledge that China owns the oil and gas is against the Constitution,” he added.

Carpio explained that areas such as the Reed Bank lie within the Philippines’ exclusive economic zone, where the Constitution reserves the use and enjoyment of marine resources exclusively for Filipinos.

“The Constitution says the state shall reserve the use and enjoyment of the marine resources in the exclusive economic zone exclusively to Filipino citizens,” he said.

“We cannot accept a condition of China that they own the oil and gas. That’s against our Constitution and against the arbitral award.”

The former magistrate recalled that earlier negotiations between Manila and Beijing on joint exploration collapsed during the Duterte administration after China sought changes in the agreement’s key provisions.

According to Carpio, Beijing demanded the removal of clauses stating that the oil and gas resources belong to the Philippines and that the contract would be governed by Philippine law.

“That is why former Foreign Affairs Secretary Teodoro Locsin Jr. terminated the memorandum of understanding,” Carpio said.

He said those provisions are standard under the Philippine service contract system, which allows foreign companies to participate in energy exploration without claiming ownership of the resources.

“If those elements remain — that the oil and gas belong to the Philippines and the contract is governed by Philippine law — then that will be okay,” Carpio said.

Carpio said recognizing China’s ownership of oil and gas resources would effectively negate the Philippines’ 2016 arbitral victory under the United Nations Convention on the Law of the Sea, which invalidated Beijing’s sweeping maritime claims in the South China Sea.

The ruling affirmed that the Reed Bank is within the Philippines’ exclusive economic zone because it is a fully submerged area.

“If we accept their terms, that means they’ve won already because we will be acknowledging that they own the oil and gas,” Carpio said.

“That will be committing suicide.”

Carpio also said the Philippines could explore energy resources within its own waters without China if the government shows political will.

He noted that other Southeast Asian countries have conducted drilling operations in their exclusive economic zones despite opposition from Beijing.

“Malaysia was able to survey and drill in their exclusive economic zone despite the threats of China. The same with Indonesia,” Carpio said.

“But we have not. It’s a matter of political will.”

The Philippines has been seeking alternative sources of energy as the Malampaya gas field, which supplies a significant portion of Luzon’s electricity, gradually runs out of reserves.

However, Carpio said developing new fields such as Reed Bank would take years and would not immediately address the country’s current energy needs.

“We will have to look for foreign countries to buy oil and gas from them,” he said.

“But any agreement with China must comply with the Constitution and the arbitral award.”

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