The Supreme Court of the Philippines on Tuesday declared the 2005 joint oil exploration agreement among state-owned oil companies of the Philippines, Vietnam, and China as "unconstitutional."
Voting 12-2-1, the SC en banc declared the 2005 Tripartite Agreement for Joint Marine Seismic Undertaking (JSMU) unconstitutional "for allowing wholly-owned foreign corporations to participate in the exploration of the country's natural resources without observing the safeguards provided in Section 2, Article XII of the 1987 Constitution."
The three state-owned firms are China National Offshore Oil Corporation (CNOOC), Vietnam Oil and Gas Corporation (PETROVIETNAM), and the Philippine National Oil Company (PNOC).
The constitutionality of the JMSU, which was signed on March 14, 2005 under the term of President Gloria Macapagal-Arroyo, was assailed on the ground that it violated Section 2, Article XII of the 1987 Constitution which mandates that "the exploration, development, and utilization (EDU) of natural resources shall be under the full control and supervision of the State."
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In a document shared with the public, the SC said the case stemmed from the original action for certiorari and prohibition assailing the constitutionality of the JMSU filed by petitioners Bayan Muna Party-List Representatives Satur C. Ocampo and Teodoro A. Casiño.
In 2008, Ocampo and Casiño challenged the JMSU before the High Court, noting that the agreement violates the Constitution that mandates reserving "the EDU of natural resources to Filipino citizens, or corporations or associations at least sixty (60%) percent of whose capital is owned by such citizens."
The respondents further argued that Section 2, Article XII of the Constitution is inapplicable as it covers the utilization of natural resources while the JSMU only involves pre-exploration activities.
The SC, however, stressed that the parties calling the joint research a "pre-exploration activity" is of "no moment."
"Such designation does not detract from the fact that the intent and aim of the agreement is to discover petroleum which is tantamount to 'exploration," the court said.
Associate Justice Samuel Gaerlan wrote the decision, which was concurred in by Chief Justice Alexander Gesmundo and 10 other Associate Justices.
