THE ROMULO – KOUMORA EXCHANGE OF NOTES: REAFFIRMING JPEPA

IN DEROGATION OF THE CONSTITUTION

By Prof. Merlin M. Magallona

UP College of Law

In an Exchange of Notes dated August 22 and 29, 2008, Philippine Secretary

of Foreign Affairs Alberto G. Romulo and Japanese Prime Minister of Foreign Affairs
Masahiko Koumora have formally expressed “the shared understanding…on the
interpretation of the Japan-Philippine Economic Partnership Agreement (JPEPA).”

This “shared understanding” came about on the request of the Philippines

purportedly to save JPEPA from rejection by the Senate, owing principally to its
provisions on investments which are in derogation of the Philippine Constitution.

The Romulo-Koumora Exchange therefore appears as response to the

condition set by the Senate that it may not act in concurrence on JPEPA unless the
issue of constitutionality is resolved. Apparently, authoritative Senate sources are of
the view that JPEPA contains investment provisions in serious conflict with the
citizenship requirements of the Constitution.

However, the Exchange of Notes reaffirms “the rights and obligations” of the
Parties under the provisions of the JPEPA” and, in the overall result, JPEPA remains at
war with the Constitution.

1. The entire Exchange of Notes is devoted to the interpretation of the

JPEPA. It does not
in any way seek to change the intent of the parties. Neither does it amend the text
of JPEPA.

The essence of a treaty in international law is that it creates legal relations

between the
state parties, and the core of such relations consists of rights and obligations
embodied in the meaning of the text of the treaty in question. For this reason,
instead, the Exchange of Notes appears as reaffirmation of the legal relations
between Japan and the Philippines in JPEPA and has the effect of reinforcing the
intent to adhere to the rights and obligations as provided in JPEPA. On this point,
the Exchange of Notes is emphatic, thus:

4. The present exchange serves only to confirm the interpretation of,

and does not
Modify the rights and duties of the Parties under the provisions of the
JPEPA.
 (Emphasis added.)

This paragraph is a component of what the Exchange of Notes describes

as the “shared understanding of the Republic of the Philippines and Japan on the
interpretation of the Japan-Philippine Economic Partnership Agreement (JPEPA).” It
stands to reason that it is their intention to interpret JPEPA in terms of the rights and
obligations stipulated in JPEPA as its text stands now, without any modification –
which are precisely in derogation of the Philippine Constitution.

2. In the international law of treaties, the task of interpretation, says Lord

McNair in his
Law of Treaties (1961, p.365), is “the duty of giving effect to the expressed intention
of the parties, that is, their intention as expressed in the words used by them in the
light of the surrounding circumstances.” (Emphasis by McNair.)

The “shared understanding” in the Exchange of Notes must necessarily

subserve the clear statement of rights and obligations as set forth in JPEPA. It cannot
pretend to modify that statement, which the Exchange of Notes itself asserts.

3. In reference to provisions of the Constitution requiring citizenship

requirements, which
JPEPA intends to eliminate by parity treatment of Japanese investors, the “shared
understanding” states that “Nothing in the JPEPA requires amendment of any
existing provisions of the [Philippine] Constitution”.

It is true that JPEPA does not intend to directly amend the Constitution. With
JPEPA, the Constitution will remain intact, but JPEPA will supersede or supplant it; in
application and in settlement of disputes over JPEPA’s interpretation, JPEPA will
prevail over the Constitution in the event that the Senate gives its imprimatur. In
case of incompatibility between JPEPA and the Constitution as an issue to be
decided by an arbitral tribunal that may be created by the parties pursuant to
JPEPA, that tribunal will apply JPEPA over and above the Constitution pursuant to
the fundamental principle of the pacta sunt servanda and in accordance with the
basic norm of international law that a party to a treaty cannot invoke its internal
law, including its Constitution, as a justification for failure to perform its obligation
under the treaty.

The choice before the Senate is clear: JPEPA or the Philippine Constitution.