How China-PH contract over West PH Sea exploration can be key in enforcing arbitral ruling

Mike Navallo, ABS-CBN News

Posted at Dec 10 2020 11:53 PM

Carpio suggests PH push for enforcement mechanism in UNCLOS

MANILA — Despite all the criticisms hurled against President Rodrigo Duterte over his position on the enforcement of the arbitral ruling on the West Philippine Sea, retired Senior Associate Justice Antonio Carpio believes there is still a way for the President to make it his “greatest achievement.”

“One of the greatest achievements of former President Benigno Aquino III was the filing of the arbitration case against China, which legally secured our EEZ (Exclusive Economic Zone) in the West Philippine Sea,” Carpio said.

“If the MOU and TOR arrangement with China pushes through, one of the greatest achievements of President Duterte will be the enforcement of arbitral award and the application to the wider South China Sea dispute of this formula, bringing much-needed peace and stability in the region.”

Carpio made these remarks Thursday at a ceremony at the University of the Philippines (UP) College of Law, where the university conferred upon him an honorary doctor of laws degree for his contribution to the judiciary and in advancing the Philippines’ sovereign rights over the West Philippine Sea.

He was referring to a service contract agreement between China and the Philippines for the joint exploration of the oil and gas reserves in the West Philippine Sea by the Philippines and China.

Both countries have signed a memorandum of agreement in November 2018 and the terms of reference (TOR) in August 2019.

Both sides were supposed to meet in March this year for the final meeting to vet the partnership between the state-owned China National Offshore Oil Co. and Forum Energy, a London-based firm that has a service contract with the Philippines over the area covering the Reed Bank, but that meeting was canceled due to the pandemic.

Carpio had earlier said that under the service contract, Beijing will recognize Manila’s sovereign rights over the West Philippine Sea.

That’s because, under the service contract, the Philippines is recognized as the owner of the oil and gas while another provision provides that Philippine law governs the contract. 

The Chinese service contractor will receive 40 percent of the net proceeds as payment for the capital, services, and technology that it will provide in extracting oil and gas and the Philippine government will receive 60 percent of the net proceeds as the owner of the oil and gas, the retired magistrate explained.

“As long as the structure in the MOU and TOR is not changed, I can vouch to the Filipino people that Philippine sovereign rights in the West Philippines Sea are preserved,” he said.

But Carpio recognizes that China may “walk back” on its commitment under the MOU and TOR.

“That is why we must address the serious weakness in UNCLOS (United Nations Convention for the Law of the Sea), and that weakness is the absence of a mechanism to enforce decisions of an arbitral tribunal under UNCLOS,” he said.

“There is no world policeman who can enforce arbitral rulings of UNCLOS tribunals. Each state party to UNCLOS is treaty-bound to comply in good faith with decisions of arbitral tribunals organized under UNCLOS. However, a losing state party can go rogue, and there is no enforcement mechanism to stop a losing party from going rogue.”

Duterte frequently cited as reason for not invoking the arbitral ruling with China the problem of enforcing the arbitral award, warning the Philippines risks provoking a lopsided war between the 2 countries, although he did raise it in his speech before the United Nations General Assembly in September.

Carpio had sought to offer alternatives and allay concerns about the “false dichotomy.”

Another suggestion Carpio raised Thursday is to push for enforcement mechanisms once UNCLOS will be amended, similar to the setup at the World Trade Organization where the winning party can impose additional tariffs on the exports of the losing party — a built-in mechanism to enforce decisions of the arbitral panels under the WTO. 

“In the next round of negotiations to update UNCLOS, the Philippines can propose a similar built-in enforcement mechanism. The privileges of the losing party, losing state, under UNCLOS will automatically be suspended for failure to comply to a ruling within a given period. Thus the losing state can have its deep sea mining permits suspended, its voting rights suspended, and its representation in UNCLOS committees – including the international tribunal for the law of the sea – suspended until it complies with the arbitral ruling,” he said.

BRIDGE LAW AND JUSTICE

In his lecture, Carpio urged members of the legal profession to always strive to bridge law and justice.

“As life-long students of the law, we must find ways to bridge the gap between a final arbitral ruling and its enforcement, between law and justice,” he said.

“The arbitral ruling is the law between the parties, but unless enforced, there is no justice. As every lawyer worth his attache case knows, enforcement or execution of the judgment or award is the fruit and end of the suit, and the life of the law.”

The conferment of the honorary doctor of laws degree came more than a year after Carpio stepped down from the Supreme Court after 18 years in office with more than 900 decisions and no backlog.

Present during the conferment ceremony were Associate Justices Marvic Leonen and Rosmari Carandang, former Foreign Affairs Secretary Albert del Rosario, former SC Associate Justice and Ombudsman Conchita Carpio-Morales, as well as UP President Danilo Concepcion and UP Diliman Chancellor Fidel Nemenzo.

Despite his retirement, Carpio continued his advocacy for the West Philippine Sea through various engagements.

Described as a “militant,” he was introduced by UP Law Dean Fides Cordero-Tan as “the best Chief Justice we never had.”

But those who have worked with him, like corporate lawyer Stephanie Gomez-Somera who authored a 2-volume collection of Carpio’s decisions and dissents on the Constitution, admitted he could also be “a bit of a tyrant.”

“His excellence is a form of coercion, but by all means, Dr. Carpio, intimidate us, bully us into being better versions of ourselves, if only to approximate the excellence of your work,” she said. 

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