Under service contract, China will recognize Manila's sovereignty: Carpio


Posted at Oct 31 2019 11:32 AM

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MANILA – There is no need to require China to recognize Philippine ownership and sovereignty over the West Philippine Sea before a joint oil and gas exploration, retired Associate Justice Antonio Carpio said.

"There is really no need to demand that from China because if it's a service contract the first whereas clause of the service contract is 'the resources belong to the Philippines'. In every service contract we state that's the premise," Carpio explained on ANC’s Headstart.

On Monday, Vice President Leni Robredo said the Philippine should not enter an agreement with China until Beijing recognizes Manila’s ownership and sovereignty over the West Philippine Sea.

The Philippines and China in August agreed to form working groups to explore commercial oil and gas agreements in the West Philippine Sea, which falls inside Manila’s exclusive economic zone.

National Security Adviser Hermogenes Esperon earlier said a 60-40 sharing scheme to explore new energy sources in the West Philippine Sea was “more than fair” for Manila.

Under the Constitution, Carpio said it should be the government that directly conducts oil exploration, the utilization and development. But the government can hire contractors to do it under a service contract.

“What we are saying in the MOU now with China and the TOR, that's exactly the structure. China will come in as a service contractor or through a service contractor. When you are a service contractor like Shell now in Malampaya, they never claim that they own the gas. They are just a service contractor and a service contractor admits it doesn’t own it that's why it’s a service contractor,” he explained.

Carpio said the deal with China can work in favor of the Philippines. He said China would implicitly recognize the Philippines' sovereign rights over the West Philippine Sea when it signs an oil and gas service contract with Manila. 

In fact, Carpio believes the deal is a face saving solution for China.

"But of course, China has more to give because in addition to being a service contractor, China will in effect not press anything with respect to sovereign rights. They impliedly accept we have sovereign rights and that's why this is actually the face saving solution for China," he said.

Meanwhile, spreading service contracts for the possibility of joint oil and gas exploration to other countries other than China is also a good idea. This after President Rodrigo Duterte invited Roseneft Oil, Russia's top oil producer, to invest in the Philippines earlier this month.

"I think it’s a good idea because we should spread out our service contracts. We should not limit it to China alone. We should spread it to European countries, the US, to Russia," said Carpio.