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PH to have control over China in Service Contract 57

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By Argyll Cyrus Geducos

Malacañang said that China would have to comply with Philippine laws in case the joint exploration in Service Contract (SC) 57 pushes through, as the area is under the exclusive economic zone (EEZ) of the country.

Presidential Spokesperson Harry Roque issued the statement days after he announced that there are two areas that may be subjected to joint exploration by the Philippines and China, namely SC 57 and SC 72.

(REUTERS/Damir Sagolj / MANILA BULLETIN)

(REUTERS/Damir Sagolj / MANILA BULLETIN)

Roque, in a Palace press briefing Monday, said that since SC 57 is under the Philippine EZ, China would have to comply with domestic laws.

“As far as 57 is concerned, they will comply with the decision with La Bugal [ruling]. They can participate in exploration and exploitation provided, as the decision says, we have ultimate control over the exploration and the development,” Roque said.

The Palace official also confirmed that China would be under the control of the Philippines during the joint exploration on SC 57.

“They’re only a foreign entity engaged in exploration and development. But they have to do it under Philippine laws,” Roque said.

“They will absolutely be subject to Philippine laws if it is [SC] 57. It would have to be the mining code. The domestic law of the Philippines will prevail over [SC] 57,” he added.

According to Roque, the government will have to make sure that local mining laws are being complied with and that revenues earned from natural resources in SC 57 will be paid to the State.

According to the Philippine National Oil Company (PNOC), SC 57 was awarded to PNOC Exploration Corporation (EC) on September 15, 2005. It covers a total area of 7,120 sq. km. in offshore Northwest Palawan and is situated around 50 kilometers northwest from the north-westernmost tip of Busuanga Island.

However, Roque said the same does not apply to SC 72 as there is an ongoing dispute in the said area between the Philippines and China.

SC 72 was awarded to Sterling Energy Ltd in June 2002. It is located in the West Philippine Sea, west of Palawan Island and southwest of the Shell-operated Malampaya Gas Field. SC 72 covers 8,800 square kilometers.

“As to [SC] 72, the agreement on joint exploration will be governed by international law because there has to be a treaty to be signed between the Philippines and China first on the joint exploration before it can be implemented by juridical entities of the contracting states,” Roque said.

“That’s why if we enter into an agreement, we’ll have to spell out the respective rights and obligations of the parties by way of a compromise,” he added.

How will the joint exploration happen?

According to Roque, there must be a bilateral treaty first signed between the States that would enable its nationals to engage in joint explorations.

He added that once the treaty is signed, then the service contracts are awarded in favor of corporations of the contracting states.

“When you agree to a joint development, you enter into a treaty which under international law, is defined as a written contract between two states governed by international law,” he said.

“So they contract as sovereign equals. They observe the principle of equality under international law,” he added.

‘Joint exploration is normal’

Roque, meanwhile, addressed the concerns raised by critics that allowing a joint exploration between the Philippines and China would “open the floodgates” for the Asian giant to explore areas under the Philippines’ EEZ.

“You cannot be myopic about it. You cannot strangulate economic development because of myopic views. That’s the majority opinion. If that happens, so be it. It was decided by the Philippine Supreme Court,” he said.

According to Roque, many countries have engaged in joint explorations, namely Vietnam, India, China, Iceland, Norway, New Zealand, Kenya, Papua New Guinea, Indonesia, Malaysia, and Brunei.

“They’re wrong in saying it’s not allowed in our Constitution. And they’re also wrong in saying that we’re compromising sovereignty. Our point being, it’s being done. You know this is just few examples,” Roque said.

“So there’s actually so many of these kinds of agreements now. It’s actually a common accepted practice for sovereign states to enter into these treaties, allowing joint development and allowing different corporations to enter into service contracts,” he added.

President Duterte said last week that having a joint exploration with China in the disputed waters is better than antagonizing China and waging a war.

Malacañang earlier said that there would be no problem if the Philippines decides to allow China to jointly explore, exploit, and develop areas under the EEZ because the government holds the sovereign decision to do so.

“Exclusive economic zone refers to exclusive right to explore and exploit, but it is your sovereign decision kung gusto mong magkaroon ng joint exploration (if you want to have a joint exploration there),” Roque said last Friday.

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