AFFIRMATIVE NEGATIVE

NECESSITY
In the same vein, if there exists no actual There is no actual agreement. Any allegation of
agreement, what then is the basis of the unconstitutionality is premature. Actual
negative in arguing that the agreement between agreement may not reflect MOU or Framework
China and Philippines would be Agreement.
Constitutional?

Most especially that the previous,

contemporaneous, and subsequent agreements
between China and the Philippine have shown
a consistency in the intent of China to share
beneficial ownership over the WSP.

Indeed, there is no agreement yet. What we

have are documents showing the intention of
Philippines and China to enter into joint
venture for exploration and development. This
can be traced from the Joint Statement that
they have issued in 2016, the draft framework
denominated as “Joint Maritime Agreement for
Oil and Gas Exploration”, and the
Memorandum of Understanding recently
issued in November 2018. All of these legal
documents have one thing in common – they
provide provisions indicating “mutual benefit,
mutual respect, and outcome-sharing”.
First, according to AO 21, the areas of the Joint is descriptive of the fact that there are two
West Philippines Sea (2) states involved in the activity exploring and
developing identified “working areas.” (China
As a matter of fact, the pertinent documents in areas beyond Philippine EEZ)
between China and the Philippines contain the
provisions, “mutual benefit” and “outcome
sharing”.
First, the exploration and development which Joint exploration and development is
retains full control with the Philippines is constitutional for as long as the Philippines
inconsistent with the intent of China as evinced retains full control.
by the (1) agreements, and (2) conduct of
China in the WPS.

Second, an arrangement which retains full

control with the Philippines is not analogous to
joint exploration and development, but rather a
financial or technical assistance agreement.
First, it is the contention of the negative that Natural resources in the West Philippine Sea
there are contracts involving our natural (Philippines, EEZ) is not governed by ART 12;
resources which are not covered by the only “consent” of Philippines is needed.
Constitution.

Second, the factual predicates surrounding the

agreement would show otherwise.

Under Sec. 2 of RA 7942, “Philippine Mining

Act,” the law states, and I quote, “all mineral
resources in public and private lands within the
territory and exclusive economic zone of the
Republic of the Philippines are owned by the
State.”
That is inconsistent with the nature of the Not all types of joint explorations and
Convention, naa diay activity relating to development would be unconstitutional.
natural resources na unregulated. Where “joint” is descriptive of the activity
undertaken by two States; however, it is still
Strict interpretation of the 1987 Constitution. subject to the control of the Philippines,
To avoid circumvention, every intent is really because the Philippines will decide.
for the exclusivity of the natural resources.

Where there is a grey area, as the negative

would try to tell this Court or tribunal, then
there is all the more reason that we should
interpret it restrictively; it should be interpreted
in favour of sovereignty over its natural
resources, rather than permitting an
interpretation where the Philippines is to share.

Commissioner Nolledo also remarked that

“entering into service contracts is an exception
to the rule on protection of natural resources
for the interest of the nation, and therefore,
being an exception, it should be subject,
whenever possible, to stringent rules.” (III
Record of the Constitutional Commission 354)
The word “joint exploration and development” Joint exploration and development as used in
partakes the nature of “joint venture”. Notice the motion expresses a general, and not a
must also be given to the Memorandum of specific intent, of the China and the
Understanding and the available draft Philippines. Therefore, when we speak of
framework entitled as “Joint Maritime “joint”, we simply mean with the participation
Agreement for Oil and Gas exploration” where of China and the Philippines through means
it provides for provisions on “mutual benefit, which are considered as constitutional.
mutual respect, and outcome-sharing”.
Therefore, what is contemplated really by the
Philippines and China is a “joint venture”,
which may only be done by the state with a
domestic corporation, at least 60% of whose
capital is owned by Filipino Citizens.
Precisely, these advisers and consultants will China and Philippines, with all their advisers and
know that with reference to our Constitution, consultants, cannot be expected to enter into an
the only way a foreign-owned corporation may agreement that will be considered as
participate in the exploration, development, unconstitutional later on.
and utilization of our resources is through
financial or technical assistance agreement.
The only way for China, or for a Chinese- China has the intention to make its agreement
owned corporation to participate within the with the Philippines constitutional and
metes and bounds of our constitution is therefore, would not violate the Philippine
through financial or technical assistance constitution.
agreement. In an FTAA, the foreign-owned
corporation merely extends financial or
technical expertise to the Philippines. As a
‘contractor’ they are merely paid by the
services that they have rendered. They do not
exercise control in the operations, and does not
have beneficial ownership. This is clearly not
China wants. They want to be have a share in
whatever is extracted, and shall have effective
control in the operations.
Exploration, development, or utilization, need ART 12(2) will not apply to the proposition
not all be present to make Sec. 2 applicable; because the contemplated joint undertaking in
otherwise, it would be easy to circumvent the the proposition is simply “exploration and
strict constitutional provision founded on development.” ART 12(2) will apply on if
public policy and matter of public interest. there is “exploration, development, and
utilization” of natural resources.
This provision involves natural resources. It is
a vital public concern. With more reason that In “exploration” Filipinos are not denied of
we should apply the strict interpretation natural resources. In “development” (which
requirement. only involves ‘work undertaken to explore and
prepare an ore body or a mineral deposit...’),
In any case, joint exploration and development, Filipinos will not also be denied natural
partakes of the nature of joint venture. resources. It will only be in Utilization.

Sec.2(2) deals with the State not directly doing

The definition of production-sharing, co-
the EDU or the State doing the EDU with a production and joint venture agreements under
partner-corporation. What was mentioned was the Philippine Mining Act includes an
co-production, joint venture, and production expectation of profit which necessitates
sharing agreements.. utilization. In this case, the motion only
involves exploration and development which
Sec.2(4) deals with the State doing the EDU does not involve profit sharing which means it
fully, but engaging foreign entity as salaried is permissible?
entity to render technical assistance, or for
foreign entity to render financial assistance.
In Labugal MR, SC said that if the undertaking
is an FTAA, then there is no beneficial
ownership.

Therefore, if what is involved is joint

development, with beneficial ownership, we
follow the ruling in Kilosbayan. Which is why
any joint development can only be with a
Filipino corporation.
What qualifies everything is the word “joint,” Joint exploration and development is a
as in joint venture. If it’s only a venture, there completely different specie of an activity from
will be no special and legal consequences. It is a joint venture, hence the elements of a joint
only when the venture is “joint” that mutual venture cited by the affirmative from
agency and community of interest will proceed Kilosbayan does not apply.
as a matter of law.

Furthermore, The Constitution seeks to

regulate all activities relating to our natural
resources. It is not the intent of the framers to
leave some aspects of natural resources
unregulated. It is, after all, a matter of vital
public interest. If it is a different species, then
that implies that there are other activities
relating to our natural resources which are left
unregulated. The negative side is engaging in
legislation.
BENEFICIALITY
Liberal interpretation is certainly not the intent Liberal interpretation of ART 12 to maintain
of the framers of the Constitution in the balance between the need to reserve that
application of the provisions of Article 12. resources to Filipinos and need to develop as a
developing State.
As a matter of law, the intent of the framers of
the Constitution, as expressed by
Commissioner Nolledo, under RCC 384
provides that the provisions under Article 12
must be applied strictly against acts involving
our natural resources.
That would even be more detrimental because If we don’t allow China to enter into contracts
the MOU would only legitimize already illegal with us, surely China would perpetrate their
act by China. Previous, subsequent, and illegal acts in the WPS. It they enter into JED
contemporaneous acts such as the construction with us, China’s actions will be properly
of artificial islands, the failure to obey the policed under an agreeable framework.
PCA’s ruling, and just recently, the barring of
Philippine media to access these areas show
that it has the intent to assert ownership and
control.

Any agreement for JED would NOT police

China’s actions; on the contrary, it would be a
waiver to our national sovereignty.
We have two responses. Affirmative only claims that the
unconstitutionality is based on the fact that
Firstly, it is not about the amount or the there is equal sharing of benefits under any
proportion of the sharing. What the affirmative possible agreement. Had the benefit of China
contests is NOT the equal sharing but the been less than what the Philippines would get,
MUTUAL sharing of resources involved in a then affirmative would be okay with it. Thus,
joint venture, which can only be constitutional fundamentally, the theory of the affirmative
when it is undertaken with a qualified coincides with the negative side.
corporation, NOT a foreign state, regardless of
the sharing and proportion involved.

Secondly, even taking the negative’s

arguments to its highest, sharing of benefits is
only half of the problem. A joint venture
would grant the foreign state mutual control
over our own natural resources. This is
detrimental because it would give them the
power to direct, regulate and restrain.
Regardless, anything unconstitutional We stand to lose more if we don’t enter into
CANNOT be agreeable. The constitutionality JED with China. Our fishermen won’t be able
of a measure cannot be dependent on its to fish in the disputed waters and our people
beneficiality. would surely benefit with an agreeable
framework between countries.
In fact, in Record No. 56 of the Records of the
Constitutional Commission, the drafters
themselves acknowledged we are a State that is
unable to shelf out the necessary capital for
such undertakings, yet notwithstanding they
still proceeded to impose all these limitations
under the Constitution because the direction of
the Constitution, was intended to be geared
towards creating an economy that is self-
directed, self-sustaining, and self-reliant. In
fact, the deliberations stated, and I quote, “the
sooner we explicate that the Philippine
economy belongs first and foremost to
Filipinos, then the better so as to reduce
gradually our dependence on foreign capital for
our development efforts.”
The situation contemplated in La Bugal-B’laan Exploration by foreigners is not
is an FTAA. Indeed there would be no problem unconstitutional.
if that were the case.
However, previous and subsequent acts of the
parties show otherwise. This is evidenced by
the 2016 Joint Statement between the
Philippines and China, and the 2017 Joint
Statement between the Philippines and China,
which they carried over into the Draft
Framework on Oil and Gas Exploration, and
the Memorandum of Agreement on Joint Oil
and Gas Exploration. All these statements and
agreements contemplate, “mutual respect,
mutual benefit, and outcome sharing.”
in La Bugal-Blaan, par. 2 was construed with
par. 4., that while FTAAs grants legitimate
exercise of management prerogatives to the
foreign contractor, it is not however to
prejudice the primacy, and supremacy of the
state sovereignty and State control and
supervision over all aspects of exploration,
development, and utilization of the country’s The government also has a big say in the
natural resources.
Control, was defined by the Court, as the that the government has absolutely NO
power to direct, restrain, and regulate, or contribution to the exploration expenditures or
establish policies to restrain activities deemed work activities and yet is given veto power
not desirable or beneficial.
This is the scenario of the FTAA.
As held by the Court in La Bugal-Blaan,
“While the Constitution mandates the State to
exercise full control and supervision over the
exploitation of mineral resources, nowhere
does it require the government to hold all
exploration permits and similar
authorizations.
An exploration permit merely grants to a
qualified person the right to conduct
exploration for all minerals in specified areas
and such a permit does NOT amount to an
authorization to extract and carry off the
mineral resources that may be discovered.
This phase involves nothing but expenditures
for exploring the contract area and locating
mineral bodies. As no extraction is involved,
there are no revenues or income to speak of.
The State risks nothing and loses nothing by
granting these permits to local or foreign firms;
in fact it stands to gain in the form of data
generated by the exploration of activities.
Thus, the danger of beneficial ownership
alleged by the affirmative is NOT well-
founded. There is no such benefit
contemplated under a joint exploration.
Concerned government officials will be
informed beforehand of the proposed
exploration activities and expenditures of the
contractor, with the right to
approve/disapprove them or require changes or
adjustments.
exploration phase of the project. That fact is
not something to be taken lightly, considering
over such a critical aspect of the project. This
is a very significant degree of CONTROL. So
many millions of dollars worth of
investments—courtesy of the contractor—are
But the scenario of this debate, on joint made to depend on the State’s consideration
exploration is different. In Aurbach v. and action.
Sanitary Wares Manufacturing Corporation,
the court held that joint exploration involves
mutual control.

In effect, Your Excellencies, joint exploration

means giving China the mutual right to direct,
restrain, and regulate, and establish policies
deemed not desirable or beneficial to ITS
OWN INTERESTS. This is tantamount to
giving China coercive, and restraining power
over our economic agenda and stagnate our
own development.
We are not stating that we complete forego The government must be trusted, must be
with any foreign aid. What the affirmative is accorded the liberty and the utmost flexibility
saying that any negotiation and transaction to deal, negotiate, and transact with contractors
must be within the bounds of the Constitution. and third parties as it sees fit; and upon terms
Of course, the President, as the chief architect that it ascertains to be most favourable or most
of our foreign policy is given the leeway to acceptable under the circumstances.
decide and act, but this is not an absolute
power. He is still bound to act within the The inflexibility of the affirmative may spell
bounds of our constitution. In fact, as the the end of the mining venture, scare away
Chief Executive, he has the duty to enforce the potential investors, and further worsen the
law. IN this case, the Constitution is clear andalready dismal economic scenario. Moreover,
needs no further interpretation. Joint venture such an unbending and unyielding policy
can only be undertaken with a Filipino prevents the government from responding
corporation, NOT with a foreign state. appropriately to changing economic conditions
and shifting market forces. This inflexibility
further renders our country less attractive as an
investment option compared with other
countries.
PRACTICABILITY
First, the government has NOT yet released the If it enters into an MOU, China would make
MOU despite request from various camps, sure the contracts it enters into our
including the affirmative bench. Constitutional. Otherwise, people will accuse
it of not being able.
Second, the MOU is NOT the subject of debate
tonight. The subject of debate is a joint Unfair on the affirmative’s side to characterize
exploration and development between PH and this as joint exploration and development when
CHINA. In fact, we are not accusing the in fact the affirmative submits that there is no
government of violating the Constitution. We agreement. The fact that there is no agreement
are stating that the government should take yet, shows that the Executive is really careful.
guidance from the fact that the Constitution
does NOT allow joint development, and
therefore, the government should not enter into
such kind of arrangement.

While we have no solid agreement, the conduct

of the parties prior and during the visit of Xi
Jin Ping, That’s more harm. All of those
already illegal acts will be violated. Placing
the Philippines under the mercy of China’s
faithful compliance, which has not and will not
happen. Which is why we strip these to its
essentials.

These two countries after the arbitral ruling

have decided to share. Previous,
contemporaneous, and subsequent acts. That’s
giving meat to our previous theory that this is a
joint venture. Parties are aware of the word
“joint,”. We cannot simply grant the benefit,
because they are our leaders, some of the most
well-advised. They do not commit
unintentional acts, consistently. A joint
undertaking has a specific, definition in law
which cannot just be defined by semantics.
Therefore, any violation they have deliberately
done.
Yes, it must be reviewed by the executive Affirmative cannot and should not be allowed
branch, and SHALL ensure that the agreement to compel us to take an unconstitutional route.
between the Philippines and China fits within Any agreement in the future will be reviewed
our Constitution by the executive branch, as what Locsin did,
and would surely be subject of Congressional
hearings and Supreme Court cases. Affirmative
must not be immature to think that the
Philippine government with all its resources
would enter into an unconstitutional contract.

Indeed, the Philippines does not have a history The Philippines does not have a history of
of entering into an ‘unconstitutional JED’ with entering into an unconstitutional JED with
other countries because the previous joint other countries. Certainly, there is no reason to
ventures entered were not with foreign worry.
entiiTties. The most recent that the Philippines
participated into was with China and Vietnam
in the JMSU. As expected, the JMSU was
heavily criticized and its legality was
questioned before the Supreme Court in 2008.
The case is still pending before the SC.
We are not saying that we totally close our It is practicable for China and the Philippines
doors from any foreign assistance. What we to enter into JED because China is already
are saying is that the acts of the State should
only be limited to assistance, and not where
they would exercise profit sharing or control.
The exercise of this sovereign rights by the
Philippines in entering of the contracts does
not hold presumption of regularity. This is
most especially because the intent of the
framers of the Constitution is to apply the
provisions under natural resources strictly.
The exercise of the State to enter into contracts
must still be within the framework of
municipal law. And the Constitution is clear in
the prohibition of joint venture agreements
with foreign corporations, especially foreign
States.
QUESTIONS
What is joint exploration and development?
What is joint venture?
reaching out to us. Both countries also have
good diplomatic relations. In Asia, China is
the strongest ally or partner that we can have.
The ruling by the ITLOS does not have to be
followed by the countries around the WPS.
Even if the ruling had to be followed,
Philippines is exercising its sovereignty when
it enters into contracts with China with respect
to the WPS.
ANSWERS
Joint exploration and development in the
context of this debate partakes of the nature of
joint venture.
As can be gleaned from par. 2 of the
Memorandum of Understanding on
Cooperation on Oil and Gas Development of
November 2018, and par. 2 of the Draft
Framework on Joint Oil and Gas Exploration,
the principles underlying this agreement with
China involves, ““mutual respect, mutual
benefit, and outcome sharing.”
This intent is further affirmed in par. 14 of the
Joint Statement in Manila on November 2017
In Kilosbayan v. Guingona, a joint venture is
defined as “an association of persons or
companies jointly undertaking some
commercial enterprise; generally all contribute
assets and share risks. It requires a community
of interest in the performance of the subject
matter, a right to direct and govern the policy
in connection therewith, and duty, which may
be altered by agreement to share both in profit
and losses.”
In Aurbach v. Sanitary Wares Manufacturing
 Corporation, the SC enumerated the following
elements in a joint venture: “community of
interests, sharing of benefits and losses, and
mutual right of control.”
Is there a prohibition to tap a foreign state in an Even so your honor, in an FTAA, it is not a
FTAA arrangement? Can we not take China to joint exploration and development. The spirit
encompass a foreign corporation? of this debate is on exploration and
development.

The nature of an FTAA, is that only a state

undertakes it. The participation of a foreign
corporation is only to the extent of financial
and technical assistance.
Would your answer be the same if in the final The answer will be the same. Full control is
agreement that will be implemented, there will only one aspect of the nature of a joint venture.
be a clause or phrase that will grant the There is also
Philippines full control.
But isn’t it also true that in a 60-40, there is That is a different scheme. That would be an
still, to some extent, a share in the profits? FTAA which would allow foreign-owned
corporation.