A POLICY OF BETRAYAL (First of three parts)


Posted at Mar 14 2008 11:13 AM | Updated as of Mar 14 2008 07:13 PM

A POLICY OF BETRAYAL (First of three parts) 1 Philippine President Arroyo weclomes representatives from CNOOC

Arroyo gov’t pleasing China since Day 1





Since coming to power in 2001, the Arroyo administration has committed a series of acts geared toward compromising Philippine territorial interests in favor of China.


This was made possible through the agreement for joint marine seismic undertaking (JMSU) that the Philippines signed with China through their national oil corporations on Sept. 1, 2004. (Vietnam was an afterthought. It protested, and was therefore accommodated through a tripartite JMSU pact signed on March 14, 2005.)


Our investigation shows that in exchange for conceding territorial waters,  the Arroyo administration, in the last seven years, agreed to receive padded loans from China. Critics say this is a betrayal of public trust.


Related StoriesRP knew Spratlys exploration ‘too close’ to Palawan
Palace officials defend Spratly's deal
Spratlys project put on hold as Chinese ODA mess rages
Analyst likens Spratlys deal to US bases treaty
RP may lose Kalayaan islands by default
Exploring The Spratlys
Making a Claim
As the controversy over the compromised Philippine territory rages, Malacañang is trying to extricate President Arroyo from any responsibility in the JMSU agreement. Palace spin doctors are saying that when it came to Chinese affairs, the Chief Executive relied too much on Speaker Jose de Venecia Jr., then her staunchest ally and known go-between of Chinese officials and businessmen.


Hers, at worst, would be “command responsibility,” says a Palace defender.


This Cabinet official failed to check with the Palace and the energy department. The President herself has been signing the authorization for foreign companies that want to survey Philippine areas for possible oil deposits. JMSU could not have gone without her approval.


The JMSU site is about 80 percent within the Philippines’ exclusive economic zone (EEZ), but the government, through the pact, acknowledged the area as disputed. The JMSU is outside the Spratly Islands in the South China Sea that six countries—including the Philippines, Vietnam, and China—are claiming. Its EEZ, however, makes the Philippines the claimant closest to the Spratlys.


Diplomatic blunder

For the questionable JMSU deal to hold together, President Arroyo and key officials created an intricate web of constitutional breach, diplomatic blunder, legislative conspiracy, and bribery, as abs-cbnNews.com/Newsbreak investigation showed.


At least nine of the legal, diplomatic, and scientific authorities we interviewed on the issue supported this analysis. These sources—some still in government and some already out of it—preferred that their identities be kept confidential due to the sensitivity of the issue, and so as not to put at risk their positions or the agencies or institutions they belong to.


Legal experts said the government effectively derogated the Philippines’ sovereignty over the marine resources around the province of Palawan. This is a step toward weakening our territorial claim on the militarily strategic and potentially oil-rich group of islands known internationally as the Spratlys, which sits next to the Philippines’ EEZ and which China is also claiming.


In return for allowing China (and later Vietnam) to operate within Philippine waters as an equal, Ms. Arroyo, compared to past presidents, clinched the most number of bilateral agreements with China in the two countries’ 30-year relationship. (Click here to see the list of RP-China Bilateral Agreements)


In seven years, the Arroyo government signed 65 bilateral agreements with China, way beyond Ferdinand Marcos’s eight agreements in almost 11 years. It was during Marcos’s time that the Philippines and China established diplomatic relations.


President Corazon Aquino’s administration signed only three agreements with China in six years; Fidel Ramos’s, three agreements in six years; and Joseph Estrada’s, an average of three agreements a year in his short-lived presidency (two and a half years). Arroyo averaged 9 to 10 agreements a year.


GMA and China exploration

Senior diplomats recall that when Ms. Arroyo was vice president, she made known to the Department of Foreign Affairs (DFA) her openness to China’s idea of jointly developing disputed areas in the South China Sea with other claimant countries.


Her interest could have been sparked by the Framework of Bilateral Cooperation in the Twenty-First Century that the Philippines and China signed on May 16, 2000. Through the document, signed by the foreign affairs chiefs, the two countries acknowledged “the similarities in their respective national development goals” and agreed “to optimize…cooperation” in eight sectors.


Less than a year later, Arroyo rose to the presidency and reportedly sent memoranda to the DFA again about the Chinese interest in development in the South China Sea.


In 2002, the Association of Southeast Asian Nations, of which the Philippines is a member, signed with China the Declaration on the Conduct of Parties in the South China Sea. Regional security experts interpreted it as a means to stop China from bullying the other Spratlys claimants and to force it to deal with ASEAN as an organization.


JDV’s contacts

A POLICY OF BETRAYAL (First of three parts) 2 House Speaker Jose De Venecia poses with representatives from the three companiesChina by then had grown more aggressive in courting individual claimants through promises of economic benefits. President Arroyo, with the aid of Speaker Jose de Venecia Jr. who had the initial contacts in China, kept up with the Chinese pace.


That same year, and through 2004, the Philippines started negotiations for Chinese loans to finance major projects with Chinese companies and suppliers. President Arroyo in 2002 also appointed Eduardo Mañalac as undersecretary supervising upstream operations at the Department of Energy (DOE), right after his seven-year stint in China as oil explorer.


Two days before the JMSU deal with China was signed, Mañalac was appointed president and CEO of the Philippine National Oil Company. He signed the pact with the head of the China National Offshore Oil Corporation, the state-owned oil petroleum company.


Half a year later, they signed a similar pact with Vietnam through the latter’s national oil company, PetroVietnam.


Purely commercial?

In both bilateral and tripartite agreements—“purely commercial transactions,” as Mañalac put it—there was a provision that “the signing of the Agreement…shall not undermine the basic position held by the Government of each Party on the South China Sea issue.”


This indicated that the Philippines was conceding the JMSU site as part of the area in the South China Sea despite the fact that about 80 percent of the 142,886 square-kilometer targeted survey area is within Philippines waters. A regional map would show that even the 20 percent of the JMSU area, which is outside the Philippines’ 200-nautical-mile EEZ, is still far from the Spratlys area that is internationally acknowledged as contested.


The JMSU pact therefore violated local and international laws. The United Nations Convention on the Law of the Sea designated a 200-nautical-mile exclusive economic zone for the Philippines. The country then defined its boundaries to include the EEZ through Presidential Decree 1599.


From the bilateral to the tripartite pacts, the survey area was even moved farther from Palawan to acknowledge that the activity was going to encroach on Philippine territory. The new site, however, still falls within the Philippine waters. (Click here to read “RP knew exploration ‘too close’ to Palawan”)


According to official statements—made only now that the JMSU is being linked by various groups to the corruption-ridden Chinese loan-funded projects—the PNOC consulted with the Department of Affairs and the Department of Justice before signing the JMSU agreement.


Mañalac, who resigned from PNOC in 2006, said in a press conference this week that these agencies “didn’t find anything wrong” in the details of the agreement, including the map that showed the survey area. He said that Energy Secretary Vince Perez then authorized him to sign the JMSU pact.


Finding cover

RELATED DATA/DOWNLOADSList of RP-China Bilateral Agreements
Agreement for Joint Marine Seismic Undertaking in Certain Areas in the South China Sea between China National Offshore Oil Corporation and the PNOC
Tripartite Agreement for Joint Marine Seismic Undertaking in the Agreement Area in the South China Sea (JMSU)
Our sources said this wasn’t the case. These consultations, by various accounts, were meant not to get the opinion of the DFA on whether the proposal to be abandoned, but to find cover for the clearly illegal agreement that the Palace wanted by any means.


Those who can shed light on the concerns raised by the DFA before the signing did not reply to our email inquiries. The one present in most of the meetings with the PNOC and justice department representatives, Assistant Secretary for Asia and the Pacific Alicia Ramos, was murdered in an alleged robbery in April 2005, ironically two days before the state visit of Chinese President Hu Jintao.


A diplomat recalled to Newsbreak magazine in 2006 that the JMSU “looked like it was a done deal” before the DFA was consulted about it.


It looked like it was. Of the 65 bilateral pacts signed by the Arroyo government with China, from 2001 to 2007, only 18 were signed before or around the same time as the seismic survey agreement on Sept. 1, 2004.


A Malacañang press release on Sept 3, 2004, at the end of President Arroyo’s state visit to China, said that Chinese Central Military Commission chair Jiang Zemin cited the two countries’ “fruitful cooperation in sustaining stability and promoting joint development in the South China Sea.”


After this, the number of bilateral agreements almost tripled, and by then had included provisions for military aid and concessional loans from China, as well as the agreements for Chinese companies to lease more than a million hectares of Philippine agricultural lands under vague terms. (Click here to read “Gov’t Leases 1 Million Hectares to China Firm in Vague Contract”)


First country GMA visited

China was apparently pleased with President Arroyo that, in her 2004 state visit, the Chinese government news agency wrote about the “great importance” that the Philippines “attaches to its relations with China.”


Malacañang returned the compliment and called China “an important neighbor to the Philippines [that] has provided friendly support and assistance to her country’s economic and social development.”


The Palace press release continued: “It is the first country she visited since her election in May” that year.


In those years that it received a windfall from China, the Philippines not only compromised its territorial waters, it also neglected the responsibility to strengthen its claim on the Spratly Islands next to its exclusive economic zone.