Palace orders Spratlys deal cut short

March 10, 2008

The controversial Joint Marine Seismic Undertaking (JMSU) agreement that the government signed with China and Vietnam for a survey of the oil-rich area off Palawan including the Spratly islands was ordered cut short by President Arroyo on the heels of allegations that the agreement was treasonous.

Chief Presidential Legal Counsel Sergio Apostol said a review is being undertaken on the current phase of the JMSU but the second phase has been abandoned because of the “political noise” the agreement had generated.

The review, which was requested by the Philippine National Oil Co. (PNOC), aims to determine whether there is a need to extend the agree-ment, since it will lapse on June 30.

“We are abandon-ing Phase 2 because of the political noise, but Phase 2 is the same as Phase 1, it is cons-titutional. There is no violation of the constitutional provision. It is clear that nobody is waiving his right of claim over the area. This is merely for seismic study. This is not for exploitation,” Apostol said.

Makati Mayor and United Opposition (UNO) president Jejomar Binay said cutting short the JMSU is a tacit admission that there are infirmities in

the agreement which could spell grave political consequences for the Arroyo administration.

The opposition leader 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 Spratly Islands, and an area that is clearly inside Philippine territory.

Former Philippine National Oil Co. (PNOC) president Eduardo Manalac, a signatory to the JMSU, said President Arroyo should make public the map on the coverage of the agreement to dispel suspicions of irregularities in the agreement.

The map allegedly included areas that are uncontested Philippine territories included in the survey that sparked charges that the agreement was a sell off of patrimony.

“All actions taken under my watch were aboveboard, technically sound, thoroughly investigated as to its legality, and approved unconditionally by the governments of the three countries involved,” Mañalac told reporters yesterday.

Mañalac said he is willing to testify before the Senate inquiry on the Spratlys deal.

“My work with government, first as Undersecretary of the Department of Energy, and then as President of the PNOC was focused on one thing, and one thing alone, the exploration, discovery, and development of indigenous sources of energy to reduce our country’s dependence on imported oil,” he said.

My personal and professional agenda was comprised of plans and activities to further this goal and to achieve for our country and its neighbors regional energy security.

My personal knowledge of the truth in this case is limited to the planning and execution of the JMSU, he said.

The Senate is set to investigate the alleged anomalous deal on April 28 when Congress resumes session after a Holy Week break.

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.

“The reported plan to scrap the so-called Spratlys Deal came amid 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, adding: “Scrapping the deal will not absolve the Arroyo administration of possible criminal liabilities, including treason,” he said.

The Arroyo administration is facing charges that it gave China the right to explore Philippine territory in exchange for loans to fund several projects that have been tainted with corruption involving Mike Arroyo and administration allies.

Phase 2 of the JMSU deal will be affected if the JMSU will not be extended, Apostol said.

The Philippine National Oil Co.-Exploration Corp. (PNOC-EC) together with the National Offshore Oil Co. (CNOOC) of China and Oil and Gas Corp. (PetroVietnam) of Vietnam has until June 30 to finish seismic work on the area covered by the JMSU but since October, 2007, it has been on hold because of controversies on Chinese-funded projects as an offshoot of the ZTE-National Broadband Network (NBN) deal controversy.

Apostol said the legal team doing the review on the agreement will submit their recommendation to President Arroyo as basis for any future actions.

Executive Secretary Eduardo Ermita said that there is no reason yet for the Philippine government to inform China and Vietnam of the on-going review of the JMSU because the legal team has not submitted any recommendation yet.

Ermita said it is premature to talk about scrapping the JMSU because the Department of Energy (DoE) has no position yet on the matter.

“The DoE has not yet given any position that’s why they are going to make a report, an assessment .. I cannot tell you anything about scrapping or not scrapping it, because we do not know yet the recommendation of the Department of Energy,” he said.

Meanwhile, Secretary to the Cabinet Ricardo Saludo assailed the Senate for trying to probe the Spratlys deal as he stressed that the constitutionality and validity of government agreements is a function of the Supreme Court.

The US Embassy said claimant states should be transparent in all its activities in the disputed Spratly islands in the South China Sea to maintain regional peace and stability.

At the same time, the embassy denied reports that the US government is opposing the JMSU entered into by the Philippines , China and Vietnam in 2005.

“As what our Ambassador (Kristie Kenney) have said all claimants to the Spratlys should work together on the issue in a transparent way to maintain regional stability,” Embassy spokesperson Rebecca Thompson said, adding that the issue “does not affect the US ” since it is not a claimant.

Thompson also assured that the JMSU, which is being scrutinized in the Senate and House of Representatives for alleged constitutional violations, will not affect bilateral ties between the Philippines and the US .

Former Senate President Franklin Drilon earlier disclosed that the US government is reportedly upset by the Spratlys deal.

There’s no need to press the upper chamber on the appearance of Drilon when their probe on the Spratlys issue starts as the former lawmaker is likely to stand as a witness, Minority Leader Aquilino Pimentel Jr. said this yesterday.

“We can invite Drilon. He knows already that when he spoke out. He’s probably in all likelihood be a witness. We do not have to summon him. If he will be invited, he will come,” he said.

Administration Sen. Juan Pomce Enrile explained that engaging in exploration for potential sources of oil in not a very uncommon event as there are other countries who have made such arrangements in the past.

Michaela P. del Callar, Angie M. Rosales

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