Joint exploration with China only in disputed areas – Locsin

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Metro Manila (CNN Philippines, September 11) — The joint oil and gas exploration between the Philippines and China will be conducted only in disputed areas, Foreign Affairs Secretary Teodoro "Teddy Boy" Locsin said.

Locsin in a tweet on Wednesday said the memorandum of understanding which he and Chinese Foreign Minister Wang Yi drafted "applies only in disputed areas—not in areas everyone including China admits belongs to [the Philippines]."

The MOU, signed during Chinese President Xi Jinping's state visit to Manila in November last year, states that all negotiations and projects done under the agreement "will be without prejudice to the respective legal positions of both governments." Locsin on Wednesday explained these "mutual reservations on sovereignty" do not apply to areas owned by the Philippines and not contested by China.

This confirms that disputed maritime areas would be the site of the joint exploration – a question government officials, as well as the MOU and recently signed terms of reference had not directly answered.

Locsin made the statement when asked about President Rodrigo Duterte's pronouncement that the Philippines will ignore its arbitral victory in the South China Sea dispute to ensure a 60 percent share of the revenues in a joint exploration. Locsin said, "China has never made setting aside the arbitral award a prerequisite to anything but on the contrary that China agrees with the Philippines to disagree on their respective claims."

Duterte in a speech on Tuesday night said Xi asked him to "set aside the arbitral ruling." When asked if the 60-40 arrangement would appy to areas within the Philippines' exclusive economic zone, where the country should have sovereign rights, Duterte said it would not matter whether the site is part of this area or not.

"Kasi ‘yang (Because that) exclusive economic zone is part of the arbitral ruling which we will ignore to come up with an economic activity," Duterte said.

The EEZ is the 200-nautical mile sea zone from the coastline where a country has exclusive rights to explore and use natural resources, according to the United Nations Convention on the Law of the Sea. That treaty was signed by the Philippines in 1982, and by China in 1994.

An international arbitral tribunal constituted under UNCLOS and backed by the Permanent Court of Arbitration in The Hague in 2016 invalidated China's sweeping claim to almost the entire South China Sea. It also recognized the Philippines’ sovereign rights in some areas within its EEZ that are being claimed by China. The East Asian giant continues to reject this landmark decision, even though Duterte brought it up with Xi in a bilateral meeting in August.

READ: What you need to know about the arbitral tribunal's ruling

The Recto Bank, also known as Reed Bank, was also ruled as part of the Philippines' continental shelf and exclusive economic zone. This is an area that the Philippines had earlier offered for oil exploration.

The Recto Bank exploration was put on hold following a 2012 presidential order freezing all exploration activities in disputed areas. It was issued by then President Benigno Aquino III amid rising tensions with China. Duterte has said he might lift the moratorium to make way for the joint exploration.

Senior Associate Justice Antonio Carpio earlier said that if the joint exploration in the Recto Bank would push through under a 60-40 sharing agreement in favor of the Philippines, "then China impliedly admits Philippine sovereign rights" in the area. The MOU, however, maintained that any joint exploration project will be without prejudice to the two countries' overlapping claims.