<![CDATA[Duterte's South China Sea U-turn: illegal climbdown, or clever gambit for oil?]>

Climbdown or clever gambit? The jury is out on Philippine President Rodrigo Duterte's decision to ignore a landmark ruling by an international court and plough ahead with joint oil and gas exploration with Beijing in the South China Sea.

Duterte raised the eyebrows of many analysts " and the ire of critics " when he announced on Tuesday that Manila would ignore the Permanent Court of Arbitration's 2016 ruling, which backed Manila's claims to a 12 nautical mile exclusive economic zone (EEZ) in the sea, in order to continue with a joint oil exploration venture near the Reed Bank.

Maritime experts have previously cautioned the Philippine president against downplaying the ruling, saying that to do so would only strengthen China's resolve in pursuing its territorial claims in the sea. The court in The Hague had refused to recognise the "nine-dash line" that Beijing uses to claim most of the sea " including the Reed Bank, an undersea feature within the Philippine's EEZ " as its sovereign territory. Beijing has never accepted the ruling.

Many observers characterised Duterte's latest move as a U-turn, noting that just weeks ago he had been making political capital out of his vow to raise the ruling with Chinese President Xi Jinping during his recently concluded trip to Beijing.

But on Tuesday, just days after returning from that visit, Duterte said the "exclusive economic zone is part of the arbitral ruling which we will ignore to [pursue] economic activity [with China]". He told a press conference that Chinese officials had told him they would be "gracious enough" to grant the Philippines a 60 per cent share of any deal on joint exploration.

"They would only get 40," said Duterte, "that is the promise of Xi Jinping."

His remarks prompted opposition from some quarters, as some experts " including the former congressman Neri Colmentares, chairman of the left-leaning Bayan Muna Party " say that the Philippine constitution explicitly rules out joint exploration efforts within the EEZ, requiring the country instead to "fully control any exploration or utilisation of our natural resources".

However, Duterte's foreign secretary Teodoro Locsin Jnr, gave such arguments short shrift when he took to Twitter on Wednesday.

"Oh, for heaven's sake, it is just [Neri Colmenares]; the guy's an idiot and a mental disgrace to the highly intellectual communist cause," Locsin tweeted.

"China has never made setting aside the arbitral award a prerequisite to anything but, on the contrary, China agrees with the Philippines to disagree on their respective claims."

Even so, other analysts shared the congressman's concerns regarding the constitution.

Maritime expert Jay Batongbacal said on Facebook that Duterte appeared to be contemplating "co-ownership" with China.

Duterte's arrangement with China would require "joint control, joint decision-making, joint management, and joint benefits", said Batongbacal, director of the University of the Philippines Institute for Maritime Affairs and Law of the Sea.

A Filipino activist protests against Chinese actions in the South China Sea. Photo: EPA alt=A Filipino activist protests against Chinese actions in the South China Sea. Photo: EPA

"This is simply not contemplated by either the 1987 constitution or existing petroleum legislation, which assumes the Philippines would have petroleum exploration and development undertaken by fully private corporations completely subject to its sovereignty and control."

He added that the arrangement was also unlikely to be acceptable to the "China National Offshore Oil Company (CNOOC), a fully state-owned and controlled corporation operating under Beijing's direction and oversight".

However, Batongbacal stopped short of saying joint exploration would be illegal. Instead, he said it would "require additional legal interpretation of the constitution, additional supporting legislation, and a separate sui generis contractual arrangement in order to be legally feasible under Philippine law."

Duterte's former political science professor, Communist Party of the Philippines founder Jose Maria Sison, told the South China Morning Post that with this proposal, Duterte had "continued on his path of betraying the sovereign rights and interests of the Filipino people".

Sison continued: "He went to China as a beggar for high interest loans for overpriced infrastructure projects and he was pushed further by China to nullify Philippine sovereign rights in connection with a joint exploration and exploitation agreement allowing in fact full Chinese control of the oil and gas exploration and exploitation in the exclusive economic zone of the Philippines. Indeed, Duterte accomplished much as a traitor and apparent bribe-taker from China."

Competing exclusive economic zones in the South China Sea. alt=Competing exclusive economic zones in the South China Sea.

Other analysts were more upbeat about the move. Lucio Pitlo III, a research fellow at the Asia-Pacific Pathways to Progress Foundation, said that depending on how it was framed, the arrangement could be legally feasible. The arbitral ruling "did not preclude practical resource cooperation," Pitlo noted.

"If Chinese companies can take part in Philippine offshore energy exploration and development [within the EEZ] as service contractors and Beijing describes [the arrangement] to its domestic public as energy cooperation or joint development ... I think that will be a win-win scenario."

Pitlo admitted there was "a risk that [joint development] may weaken our position [regarding maritime boundaries], but we can undertake safeguards. If the Chinese companies would come in as investors in our service contract system, there is nothing to worry about."

Added Pitlo: "Duterte may argue that he is giving China a graceful and face-saving way out by offering it a joint development deal or partnership under Philippine law and with this expect Beijing to refrain from curbing Philippine oil and gas activities [within its EEZ]."

Philippine Foreign Secretary Teodoro Locsin with his Chinese counterpart Wang Yi. Photo: Xinhua alt=Philippine Foreign Secretary Teodoro Locsin with his Chinese counterpart Wang Yi. Photo: Xinhua

The debate comes amid claims by Foreign Secretary Locsin that China is "mellowing" in its position on the South China Sea.

Locsin claimed on Wednesday that China, which is negotiating a nonagression pact with Association of Southeast Asian (Asean) countries regarding the South China Sea, had wanted to restrict the presence of foreign military vessels in the area as well as foreign involvement in oil and gas projects, but had since dropped those demands.

He claimed his Chinese counterpart Wang Yi had told him last year to give Beijing "a kick" whenever it felt China was "dawdling on or delaying" the drafting of a Code of Conduct for the sea " something Locsin said both leaders hoped to draft by 2021.

"The president when he met Xi Jinping here in Manila told him, 'This sea code is taking forever. Can we rush this so we can avoid all of these tensions and we know who's right and who's wrong when something happens?,'" Locsin told ANC TV.

"Xi Jinping said 'why not' and then he turned to his foreign minister. Then Wang Yi comes to me and says, 'Is he serious?' Yeah he's very serious," Locsin said he told Wang.

"The result of that is China is mellowing, no longer insisting on the exclusion of foreign powers ... In other words there is a prospect of a fair, just and objective code of conduct in the South China Sea," Locsin said.

This article originally appeared on the South China Morning Post (SCMP).

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