Duterte says EEZ, arbitral ruling will be ignored for joint exploration with China

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President Rodrigo Duterte (L) and Chinese leader Xi Jinping (R)

Metro Manila (CNN Philippines, September 11) — The government will ignore the Philippines' arbitral victory in the South China Sea dispute to make way for the joint oil and gas exploration with Beijing, President Rodrigo Duterte said.

In an interview with Malacañang reporters Tuesday night, Duterte said Chinese President Xi Jinping had promised to give the Philippines the bigger chunk – 60 percent – of the revenues from the planned joint exploration.

In exchange, China wants the Philippines to "set aside the arbitral ruling."

"Set aside your claim. Then allow everybody connected with the Chinese companies," Duterte said, quoting Xi. Beijing had appointed the state-owned China National Offshore Oil Corporation as its representative in all working groups for the joint projects.

"They want to explore and if there is something sabi nila (they said), 'We would be gracious enough to give you 60 percent.' Forty lang ang kanila (They will only get 40 percent) That is the promise of Xi Jinping," Duterte said.

When asked if this arrangement would apply 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.

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

READ: China rejects PH arbitral victory on South China Sea anew

It remains unclear if disputed areas would be part of the Philippines' planned joint exploration with China. The memorandum of understanding and terms of reference do not specify the areas to be covered, but the Philippines had earlier offered for oil exploration an area in the Recto Bank, also known as the Reed Bank, which China is contesting. The Hague tribunal has recognized Reed Bank as part of the Philippines' continental shelf and exclusive economic zone.

The Recto Bank exploration has been 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.