Duterte can lower target in China talks

With China saying in advance that President Xi Jinping will not recognize the 2016 arbitral ruling at The Hague invalidating its nine-dash line claim over much of South China Sea, President Duterte can still reach for low-hanging fruits in their talks this month.

One Duterte option is to move forward on a deal for the joint exploration of mineral resources in the Philippines’ exclusive economic zone for which China reportedly has proposed a 60-40 percent sharing of the fruits of their common enterprise.

Insisting on the arbitral ruling as if to warn that Philippine maritime areas are verboten to Chinese (or any other alien) developer will be non-productive and could sour relations, so why insist on it? Better to come home from Beijing with something tangible.

Duterte could also refine his “verbal” (oral?) fishing deal with Xi by their clarifying the more sensitive terms for the opening of Philippine pelagic waters to Chinese fishing fleets without jeopardizing food security and the interests of Filipino fishermen.

The award by the Permanent Court of Arbitration that favored the Philippines was never recognized by China after its refusing to participate in the proceedings despite being a signatory to the United Nations Convention on the Law of the Sea (UNCLOS).

For Duterte to invoke the PCA ruling as the bedrock of bilateral discussions on maritime resources, with his spokesman Salvador Panelo saying it was “about time” he did, would be like banging his head on the Great Wall.

China’s stand was reaffirmed this week by Chinese Ambassador Zhao Jianhua: “Our position has been clearly stated at the very beginning... That position has not changed, and will not be changed.”

But if the President is willing to risk impeachment by accommodating China on fishing rights and oil-gas exploration (and even exploitation), he could just go for it this time.

Since Duterte controls the supermajority in the House of Representatives (where impeachment complaints are initiated) and the Senate (which sits as a collegial judge in an impeachment trial), the risk of conviction and removal from office is minimal.

With only three years left on his term, however, it is time Duterte clarified the timeline of Xi’s extravagant promises of investments, aid and loans, especially for his signature Build! Build! Build! infrastructure program.

There seems to be a clogging in the pipeline. Is China – with its overarching Belt and Road Initiative designed like a silken sash binding continents to Beijing with development funds – having some kind of cash-flow problems?

A recent Rappler report by JC Punongbayan said that about 42 percent of the new loans for BBB infra projects will be from China wholly or partially. Two projects, the Binondo-Intramuros bridge and the Estrella-Pantaleon bridge, are funded by Chinese grants.

Noting that halfway through Duterte’s term, China has yet to commit to finance some of his pet plans, such as the Mindanao Railway Project, Punongbayan asked: “Why the hesitation?”

• Which to follow: UNCLOS or Constitution?

To enrich discussion of maritime issues in the context of the PCA award and UNCLOS, we share some notes from Mario E. Valderrama, an authority on international arbitration who we have often quoted here. He is founder and first president (now president emeritus) of the Philippine Institute of Arbitrators.

Valderrama described as “off tangent” the explanation given about the oral contract (“verbal” was how Duterte characterized it) for the President’s opening of Philippine waters to Chinese fishermen.

He said: “Reference was made to an UNCLOS provision requiring a coastal state (Philippines in this case) to determine its maximum allowable catch and allocate the excess to other states, with preference given to ‘needy’ states. China will not qualify.

“Notably, the UNCLOS provision is in conflict with Article XII of the Constitution. There are other provisions allowing a coastal state to enter into contracts with other states re sharing of marine resources. Which, again, are in conflict with the Constitution. 

“Re exploitation of mineral resources, particularly oil and gas, there are several hints that an agreement is already in place.

“Again, there is an UNCLOS provision allowing a coastal state to enter into an agreement with another state to exploit those resources. The agreement, assuming that one already exists, would most likely be in conflict with the Constitution.

“In any event, the President talks in riddles. That is understandable. As the President, he can neither overtly undermine our Constitution nor our territorial claims. But he is nevertheless conveying the idea that he would be relying more on UNCLOS and less on our Constitution.”

Earlier, Valderrama also told us: “Aside from the ‘oral agreement’ re fishing in the West Philippine Sea, I believe that the Philippines also already has an agreement with China re exploitation of mineral resources in Recto (Reed) Bank. 

“One side says the Philippine Constitution does not allow it. The other side says UNCLOS allows it. So, the issue is: Which will prevail, the Philippine Constitution or UNCLOS?

“I’ve previously sent my answer to you, with reasons, and you published them. I said: UNCLOS.

“Additionally, when the Philippines adhered to UNCLOS, the Philippines agreed that UNCLOS issues are to be governed by UNCLOS provisions and principles of international law that are not incompatible with UNCLOS. 

“Some other opinions: Would those agreements need legislative approval? My answer: No, they are merely economic agreements.

“Would the agreements be binding on the Philippines? My answer: Yes.

“What if the Supreme Court were to invalidate the agreements? My answer: It will not matter. The Philippines will still be bound.

“What if the legislature were to reject the agreements? Same answer.

“Would the President be impeached given that the agreements would likely be in violation of the Constitution? There may be attempts to impeach him, and maybe a couple or so congressmen may endorse the attempt.

“At the end of the day, however, impeachment is both a political and a numbers game. So, as things stand, I doubt if the attempt would have a chance of success.”

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Nota bene: Postscripts are archived at manilamail.com. Author is on Twitter as @FDPascual. Email feedback to [email protected]