MANILA - Retired Supreme Court Senior Associate Justice Antonio Carpio said Wednesday there could be hope in the maritime disputes in the South China Sea, with China reportedly stating that it would not stop exploration activities in Reed Bank.

Speaking in the online Pilipinas Conference organized by the Stratbase ADR Institute, Carpio said he sees the maritime dispute being resolved peacefully “to the satisfaction of all disputant states” if Beijing pursues and sticks to a similar memorandum of agreement and terms of reference it signed with Manila, describing it as a “soft admission” by China of the Philippines’ exclusive economic zone (EEZ) in the West Philippine Sea.

The West Philippine Sea is the country's EEZ in the South China Sea, which China claims in near entirety.

“While China in the past has refused to abide by the arbitral ruling, recent developments indicate that there may be light at the end of the tunnel,” Carpio said.

The Philippines and China in 2018 signed a memorandum of understanding (MOU) to cooperate in exploring oil and gas reserves in the West Philippine Sea under the Philippine service contract system, followed by the signing of the Terms of Reference (TOR) in August 2019.

Carpio said a third and final agreement, a commercial one, should have been signed last March 2020 in Manila between Chinese state-owned China National Offshore Oil Corporation (CNOOC) and Forum Energy, holder of service contract 72 from the Philippine government to extract gas in the Reed Bank in the West Philippine Sea.

“That commercial agreement would have been vetted by Philippine and Chinese officials. Unfortunately, the COVID-19 pandemic aborted the meeting in Manila and no new meeting has been scheduled to date,” he said.

The Philippines has lifted a moratorium on exploration activities in the Reed Bank.

“The Chinese response has been very encouraging. China stated that it would not stop the exploration activities of the Philippines in Reed Bank because China and the Philippines have arrived at a consensus on the matter, referring to the MOU and TOR. This is very unlike the Chinese reaction to Vietnamese and Malaysian exploration activities in the latter’s EEZ in the South China Sea,” Carpio said.

“The MOU and TOR arrangement will satisfy the objective of the Philippines to preserve its sovereign rights in the EEZ in the West Philippine Sea while allowing China through its state-owned enterprise CNOOC and CNOOC’s partners to get 40 percent of the net proceeds of the gas in Reed Bank. It will be a fair and just arrangement satisfying China’s objective of a win-win solution in the South China Sea dispute.”

He said the same MOU and TOR would expectedly be offered to other claimant states Malaysia, Vietnam, Brunei and Indonesia.

“If China pursues and sticks to the MOU and TOR arrangement, the maritime dispute in the entire South China Sea will be settled peacefully to the satisfaction of all disputant states,” he said.

Defense Secretary Delfin Lorenzana, in his keynote address, stressed the importance of ASEAN members uniting to exert influence in issues on the South China Sea. He said the “fear of miscalculation” remains with the US and China asserting themselves in the region.

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“While the US and China continue to assert that their actions are defensive, the fear of miscalculation is ever present like the near collision of 2 frigates belonging to the US and China 2 years ago. The recent decision of the Chinese government to arm its coast guard and patrolling vessels in the South China Sea has upped the ante even more. And if ever a shooting war happens, Philippines which is right smack in the middle of the conflict will be involved whether she likes it or not,” Lorenzana said.

“The ASEAN could exert considerable influence in the issues of the South China sea if only it could act as one. But this is not possible at the moment due to the conflicting interest. The 10 ASEAN nations could not even agree to a common communiqué several years ago. Complicating the matter is China’s preference for bilateral dialogue as against multilateral one,” he added.

Meantime, US-based company Simularity, using geospatial AI technology, flagged “suspicious activity” of a Chinese cargo ship from Padang and Polambato in the waters of Luzon in October and November, and the “suspicious activity” of a Chinese bulk carrier 7.726 nautical miles from Dinaran Island in February 2020.

Vietnam, Malaysia and Taiwan also have competing claims in the South China Sea, through which international trade worth trillions of dollars passes every year.

The 2016 ruling by the Hague-based Permanent Court of Arbitration invalidated Beijing’s 9-dash line claim, its basis for laying ownership to more than 80 percent of the South China Sea.

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