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Editorial
Tightening noose


Philippine Daily Inquirer
First Posted 23:21:00 03/11/2008

MANILA, Philippines—As the story evolves, what are the issues emerging over the administration’s Spratlys policy—or the lack of it? The central issue remains the lack of a clear definition, because of a lack of transparency, of what exactly President Gloria Macapagal-Arroyo set out to do concerning the Philippine claim to a portion of the Spratlys administratively considered part of Palawan province and which Filipinos call Kalayaan Islands.

The story, as it is unfolding, involves two contracts. The first was signed between two government-owned or controlled corporations, involving seismic mapping of the South China Sea. The bilateral contract between Chinese and Philippine government-owned firms was later replaced by a trilateral contract, involving state-owned firms from China, the Philippines, and Vietnam. The contracts specified secrecy, except for authorized entities of the three governments.

The secrecy clause of the contracts is understandable in single-party states like China and Vietnam but brings up problems in a democracy like ours. That questionable aspect aside, the next question is whether the contracts were phrased in such a way as to give the administration a way of avoiding constitutionally-mandated disclosure requirements. Our Constitution authorizes the President to enter into deals involving mineral and petroleum resources, so long as the contracts that make them possible are transmitted to Congress. The administration argues that it has not had to do so, because the contracts only involve pre-exploration, and not even actual exploration, which is widely understood to be not just a prelude to, but an essential part of, of the actual exploitation of resources.

However, it’s been pointed out by reporters investigating the story, particularly Ricky Carandang, that whether or not the administration calls seismic mapping a purely pre-exploratory activity and not part and parcel of the exploitation of resources, the reality is that as far as the oil and gas industry is concerned, seismic sounding is considered an integral part of the exploitation process. This is because the costs of seismic sounding is large enough to require some sort of a guarantee that those undertaking the activity are given first crack at exploiting whatever oil and gas reserves are identified by the seismic mapping. Simply put: seismic mapping is not pre-exploration, it is part of exploration, and exploration, in turn, is part of the exploitation of resources.

So the allegation is that a false distinction has been made, to evade the Constitution’s requirements of presidential disclosure. Reporters are also zeroing in on the case of a company called Forum Energy that was given a license to explore for oil in Palawan, and which expected that it would then receive, pro forma, a service contract from the government once it found significant reserves. Instead, it was denied permission to drill—supposedly because our government faced pressure from China, emboldened by the Spratlys seismic mapping deal, which covered the part of Palawan that Forum Energy had previously been given permission to explore. Up against China, Forum Energy sold its rights to Monte Oro Resources and Energy, to which, in turn, a prominent businessman close to the President has been linked.

In the end, as the story is unfolding, the Palace’s response has been true to form and damning: It has tried to escape the tightening noose by simply voiding, or at least postponing the deal, in the hope that cancellation prevents accountability. This evasiveness only raises the question of why the government said it was perfectly legal—and yet so easily abandoned it. Not to mention the emerging issues of missing maps, a Philippine territorial base line not clearly established, which only further suggests that the administration at the very least was mucking about with deals over areas our own government isn’t even sure is ours, or someone else’s, and the corresponding problem that in agreeing to certain things, it was wittingly or worse, unwittingly, harming our own economic interests.



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