Facts
The Tripartite Agreement for Joint Marine Seismic Undertaking (JMSU) was executed by the Philippine National Oil Company (PNOC), China National Offshore Oil Corporation (CNOOC), and Vietnam Oil and Gas Corporation (PETROVIETNAM).
The purpose of the JMSU was to conduct a seismic survey to determine the “petroleum resource potential” of a designated Agreement Area in the South China Sea, which the Philippines claims as part of its territory. The agreement was executed by PNOC’s President and CEO, and respondents claimed it was exclusively a corporate act, not a foreign relations instrument signed by the President. Petitioners, acting as legislators, taxpayers, and citizens, directly filed a petition before the Supreme Court challenging the JMSU’s constitutionality.
Issues
- Whether the Supreme Court correctly took cognizance of the petition despite challenges regarding the hierarchy of courts, mootness (due to the JMSU’s expiration), and petitioners’ legal standing.
- Substantively, whether the JMSU is constitutional, specifically whether the agreement’s activities amounted to “exploration” under the Constitution, and whether the State lost full control and supervision by agreeing to the joint ownership of data with foreign corporations.
Ruling
The Motion is DENIED with FINALITY.
The Decision dated January 10, 2023 declaring the Tripartite Agreement for Joint Marine Seismic Undertaking in the Agreement Area in the South China Sea By and Among China National Offshore Oil Corporation and Vietnam Oil and Gas Corporation and Philippine National Oil Company unconstitutional and void is AFFIRMED.
Essential Elements of Jurisprudence
The controlling doctrine is that the exploration, development, and utilization (EDU) of natural resources must be conducted under the full control and supervision of the State, as mandated by Section 2, Article XII of the Constitution.
The following legal principles were established and reaffirmed:
- Definition of “Exploration”: “Exploration” under Section 2, Article XII of the Constitution is defined as the search or discovery of the existence of natural resources. Since the JMSU’s objective was “to engage in a joint research of petroleum resource potential,” the agreement clearly involved exploration.
- Constitutional Modes: The JMSU, involving foreign-owned corporations, must comply with one of the four modes for the EDU of natural resources under Section 2, Article XII.
- Requirement of Presidential Authority: For agreements under the fourth mode (technical or financial assistance for large-scale EDU of minerals, petroleum, and other mineral oils), the contract must foremost be entered into by the President himself/herself. The JMSU failed this requirement as it was signed only by the PNOC President and CEO.
- Full Control Extends to Information: The State’s full control and supervision over natural resources includes information regarding the existence/non-existence of petroleum which is a product of exploration and is as valuable as the resource itself.
- Violation of Full Control: The JMSU violated the State’s full control because it stipulated that all data and information acquired and their interpretation “shall be jointly owned by the Parties” and required prior written consent from CNOOC and PETROVIETNAM for disclosure or sale after the confidentiality term. This arrangement illegally bargained away the State’s full control.
- Judicial Power: The Court retains the duty to resolve novel issues, formulate controlling constitutional principles, and declare executive acts void if violative of the Constitution, regardless of claims of judicial restraint concerning foreign relations.
Sample Q&A
Question: A government-owned corporation (GOC) executes an agreement with two foreign, wholly-owned corporations to conduct seismic surveys in the Exclusive Economic Zone (EEZ) of the Philippines to determine the viability of oil extraction. The agreement, not signed by the President nor submitted to Congress, contains a clause stating that the GOC and the foreign parties shall have “equal rights, interests and obligations” and joint ownership of all resulting geological data. Is this agreement valid under the 1987 Constitution? Explain, citing relevant constitutional provisions.
Answer:
No, the agreement is unconstitutional and void.
- Violation of Authority (Art. XII, Sec. 2, par. 4): Since the activity constitutes “exploration” (the search or discovery of natural resources) and involves foreign-owned corporations for large-scale activity, the agreement must be entered into “by the President”. Since the contract was executed solely by the GOC and was not reported to Congress, it is invalid.
- Violation of Full Control (Art. XII, Sec. 2, par. 1): The Constitution mandates that the exploration, development, and utilization of natural resources “shall be under the full control and supervision of the State”. By providing for joint ownership and equal rights over the resulting exploration data, the State illegally bargained away its full control and supervision over information that is vital to the nation’s patrimony, rendering the agreement unconstitutional.
Note: The case acts as a reminder that constitutional provisions regarding national patrimony are like a sovereign firewall: even if international cooperation is the intended goal, any agreement involving the exploration of natural resources must strictly adhere to the specific constitutional modes and safeguards—particularly the requirements for Presidential authority and the absolute retention of State control over the resources and the vital information derived from them.
BayanMunaVArroyo #JMSU #ConstitutionalLawPH #NationalPatrimony #ArticleXIISection2 #WestPhilippineSea #NaturalResources #StateControlAndSupervision #PetroleumExploration #SovereigntyPH #UnconstitutionalAgreementPhilippineConstitution #PoliticalLaw #SupremeCourtDecisions #PhilippineJurisprudence #BarExamTopics #PublicLaw #LegalResearch #SupremeCourtPH #LawStudentPH #LegalPrecedentsCaseDigest #LegalUpdates #CurrentEventsPH #LawyerLife #StudyGramPH #DailyLegal #FutureLawyer #LawSchoolGrind #LegalNewsPH #KnowledgeIsPower
Leave a Reply