Montero, Cherith Inna D.

Law 111

2009-24021 Section III-D

Essay on the Ph-China Memorandum of Understanding

A Memorandum of Understanding (MoU) was signed by the representatives of the

Government of China and Philippines on November 20, 2018, namely, Department of
Foreign Affairs Secretary Teodoro Locsin Jr. in behalf of Philippines, and Foreign Minister
Wang Yi in behalf of China. The MoU is an agreement to negotiate and facilitate
exploration and exploitation of oil and gas of an unspecified area, pertained to in the MoU
as “relevant maritime areas”1.

This paper endeavours to dissect the provisions of the Memorandum and to discuss
issues that have arisen as a consequence to the signing of the said document.

One of the main issues that arose, is whether or not the Memorandum of
Understanding is an Executive Agreement. However, before we delve further into this
discussion, we should first define the phrase “Memorandum of Understanding”. Black’s
Law Dictionary 2nd edition, defines MoU as “A document that sets forth the terms of
agreement between parties on an issue and is usually an informal understanding that will
later be included in a formalized and more comprehensive writing.”; “A non-binding legal
document that reduces the agreement between the parties to paper and states a desire to
entire into a formal agreement upon the stated terms”. To summarize, a MoU is an
instrument that contains the “commitments” of the parties to it.

1
Memorandum of Understanding on Cooperation on Oil and Gas Development between the Government of the
Republic of the Philippines and the Government of People’s Republic of China:
xxx
“II. Basic Principle. In accordance with the basic principles of “mutual respect, fainess and mutual benefit,
flexibility, pragmatism and consensus”, through equal and friendly consultation, the two governments
have decided to negotiate on an accelerated basis arrangement to facilitate oil and gas exploration and
exploitation in relevant maritime areas consistent with applicable rules of international law.”
xxx
 The main difference between a Memorandum of Understanding and a
Memorandum of Agreement is that the latter is enforceable in the court of law as it creates
rights and obligations, while the former does not.

Article 2, (1)(a) of the Vienna Convention of the Law of Treaties defines a treaty as
“… an international agreement concluded between States in written form and governed by
international law, whether embodied in a single instrument or in two or more related
instruments and whatever its particular designation;…” from the foregoing definition, we
can infer that the designation of the written document is not determinative of its nature.
Therefore, even if an international agreement is not labelled as a “Treaty”, it does not mean
to say that it is not. The International agreement may be connoted as an agreement,
protocol, accord, et cetera, it may even be presented as an MoU, and still qualify as a treaty.
It is of import to note that in the case of the Ph-China MoU, the term Executive Agreement
might be more appropriate to use instead of “treaty” as Article XVIII Section 21 of the
1987 Philippine Constitution provides that for a “treaty” to be valid, it must be concurred
in by at least 2/3 vote of all members of the Senate.

The Supreme Court of the Philippines held, in Bayan Muna vs. Romulo2, that while
there is no difference between the terms “treaty” and “executive agreement” in
international law, there is such a distinction when it comes to the domestic sphere. In the
Philippines, treaties are international agreements that require legislative concurrence after
executive ratification, while Executive Agreements partake the same nature as treaties but
it does not require legislative concurrence3. The writer of this paper is of the position that
the Memorandum of Understanding between China and the Philippines partakes of the
nature of an Executive Agreement.

2
G.R. No. 159618, February 1, 2011.
3
B.A. Boczek, INTERNATIONAL LAW: A DICTIONARY 346 (2005)
 Anent the issue of the constitutionality of the Memorandum, the writer is of the
position that it is not constitutional as it contravenes with the provisions of the 1987
Constitution, specifically, the preamble and Article XII Section 2.

The Memorandum of Understanding is the precursor to a joint exploration and

exploitation gas and oil. Although the MoU does not specifically state the location of the
maritime area, however, should it fall under the territorial jurisdiction of the Philippines,
such agreement shall be void.

“II. Basic Principle. In accordance with the basic principles of

“mutual respect, fainess and mutual benefit, flexibility, pragmatism
and consensus”, through equal and friendly consultation, the two
governments have decided to negotiate on an accelerated basis
arrangement to facilitate oil and gas exploration and exploitation in
relevant maritime areas consistent with applicable rules of
international law.”4 (emphasis supplied)

A reading of Clause II “Basic Principles” that the Chinese and Philippine

Government is set to arrange the facilitation of oil and gas exploration and exploitation.
This would, in effect allow china, to develop, explore and utilize the maritime wealth or
natural resources that is exclusively reserved for the enjoyment and use of the Filipino
people.

The Preamble of the 1987 Philippine Constitution provides as follows:

“We, the sovereign Filipino people, imploring the aid of Almighty

God, in order to build a just and humane society and establish a
Government that shall embody our ideals and aspirations, promote
the common good, conserve and develop our patrimony, and secure
to ourselves and our posterity the blessings of independence and

44
Memorandum of Understanding on Cooperation on Oil and Gas Development between the Government of the
Republic of the Philippines and the Government of People’s Republic of China
 democracy under the rule of law and a regime of truth, justice,
freedom, love, equality, and peace, do ordain and promulgate this
Constitution.”5

Patrimony pertains to the long term heritage of the Filipino people. When the
Constitution speaks of national patrimony, it refers to the cultural heritage of the Filipino
people and the natural resources of the Philippines6 provided in Article XII Section 2 Par.
1. The 1986 Constitutional Commission further explains7:

“The patrimony of the Nation that should be conserved and

developed refers not only to our rich natural resources but also to the
cultural heritage of our race. It also refers to our intelligence in arts,
sciences and letters. Therefore, we should develop not only our lands,
forests, mines and other natural resources but also the mental ability
or faculty of our people.”

The 1987 Preamble should be interpreted to mean that all the natural resources
within the territorial jurisdiction of the Philippines, which includes the marine riches of the
aboriginal waters of the Exclusive Economic Zone of the Philippines, shall be preserved
for the exclusive welfare of the Filipino people. To allow China to benefit from the natural
resources that rightfully belongs to the Philippines, is in contravention of this principle.

The 1987 constitution further prohibits the development, utilization, exploration

and exploitation of the country’s natural resources in Article XII Section 2, which provides:

SECTION 2. All lands of the public domain, waters, minerals, coal,

petroleum, and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna, and other natural
resources are owned by the State. With the exception of agricultural

5
Preamble of the 1987 Constitution.
6
Manila Prince Hotel vs. GSIS, G.R. No. 122156, February 3,1997.
7
Nolledo, Jose N., The New Constitution of the Philippines Annotated, 1990 ed., p. 72
lands, all other natural resources shall not be alienated. The
exploration, development, and utilization of natural resources shall be
under the full control and supervision of the State. The State may
directly undertake such activities, or it may enter into co-production,
joint venture, or production-sharing agreements with Filipino
citizens, or corporations or associations at least sixty per centum of
whose capital is owned by such citizens. Such agreements may be for
a period not exceeding twenty-five years, renewable for not more than
twenty-five years, and under such terms and conditions as may be
provided by law. In cases of water rights for irrigation, water supply,
fisheries, or industrial uses other than the development of water
power, beneficial use may be the measure and limit of the grant.

The State shall protect the nation’s marine wealth in its archipelagic
waters, territorial sea, and exclusive economic zone, and reserve its
use and enjoyment exclusively to Filipino citizens.

The Congress may, by law, allow small-scale utilization of natural

resources by Filipino citizens, as well as cooperative fish farming, with
priority to subsistence fishermen and fishworkers in rivers, lakes, bays,
and lagoons.

The President may enter into agreements with foreign-owned

corporations involving either technical or financial assistance for
large-scale exploration, development, and utilization of minerals,
petroleum, and other mineral oils according to the general terms and
conditions provided by law, based on real contributions to the
economic growth and general welfare of the country. In such
 agreements, the State shall promote the development and use of local
scientific and technical resources. (emphasis supplied)

It should be stressed that the use and enjoyment of marine wealth in the archipelagic
waters, territorial sea and Exclusive Economic Zone is reserved exclusively in favour of
the Filipino people. In fact, it should also logically include, although absent from the text,
marine wealth found in the Continental Shelf8 as it is 200 nautical miles from the baseline
from which the breadth of the territorial sea is measured, same with the Exclusive
Economic Zone9.

It should further be noted that in Article XII Section 1 of the 1935 constitution,
there is no provision on the exclusive use and enjoyment of marine wealth. The fact that
the marine wealth provision is included in the more recent 1987 constitution testifies to its
importance. To wit:

1935 National Patrimony: ARTICLE XII.—CONSERVATION

AND UTILIZATION OF NATURAL RESOURCES SECTION 1.
All agricultural, timber, and mineral lands of the public domain,
waters, minerals, coal, petroleum, and other mineral oils, all forces or
potential energy, and other natural resources of the Philippines belong
to the State, and their disposition, exploitation, development, or
utilization shall be limited to citizens of the Philippines, or to
corporations or associations at least sixty per centum of the capital of
which is owned by such citizens, subject to any existing right, grant,

8
UN Convention on the Law of the Sea, Part VI. Article 76.
“Definition of the continental shelf 1. The continental shelf of a coastal State comprises the seabed and
subsoil of the submarine areas that extend beyond its territorial sea throughout the natural prolongation
of its land territory to the outer edge of the continental margin, or to a distance of 200 nautical miles from
the baselines from which the breadth of the territorial sea is measured where the outer edge of the
continental margin does not extend up to that distance.”
9
UN Convention on the Law of the Sea, Part V. Article 57
Breadth of the exclusive economic zone The exclusive economic zone shall not extend beyond 200 nautical
miles from the baselines from which the breadth of the territorial sea is measured
 lease, or concession at the time of the inauguration of the
Government established under this Constitution. Natural resources,
with the exception of public agricultural land, shall not be alienated,
and no license, concession, or lease for the exploitation, development,
or utilization of any of the natural resources shall be granted for a
period exceeding twenty-five years, except as to water rights for
irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which cases beneficial use may be the
measure and the limit of the grant.

The President shall notify the Congress of every contract entered into
in accordance with this provision, within thirty days from its
execution.

The 1987 constitution in its protection and reservation of the right to use and enjoy
the maritime wealth found within its archipelagic seas, territorial seas, Exclusive economic
Zones and Continental Shelf is in continuity with the United Nations Convention on the
Law of the Seas, specifically, Part V Article 56 and Part VI Article 77. To wit:

Part V Article 56: “Rights, jurisdiction and duties of the coastal State in the
exclusive economic zone
1. In the exclusive economic zone, the coastal State has:
(a) sovereign rights for the purpose of exploring and exploiting, conserving
and managing the natural resources, whether living or non-living, of the
waters superjacent to the seabed and of the seabed and its subsoil, and with
regard to other activities for the economic exploitation and exploration of
the zone, such as the production of energy from the water, currents and
winds;
(b) Jurisdiction as provided for in the relevant provisions of this Convention
with regard to: (i) the establishment and use of artificial islands, installations
 and structures; (ii) marine scientific research; (iii) the protection and
preservation of the marine environment;
(c) Other rights and duties provided for in this Convention.
xxx
3. The rights set out in this article with respect to the seabed and subsoil
shall be exercised in accordance with Part VI.”

Part VI Article 77 “Rights of the coastal State over the continental shelf:
1. The coastal State exercises over the continental shelf sovereign rights for
the purpose of exploring it and exploiting its natural resources.
2. The rights referred to in paragraph 1 are exclusive in the sense that if the
coastal State does not explore the continental shelf or exploit its natural
resources, no one may undertake these activities without the express consent
of the coastal State.
3. The rights of the coastal State over the continental shelf do not depend on
occupation, effective or notional, or on any express proclamation.
4. The natural resources referred to in this Part consist of the mineral and
other non-living resources of the seabed and subsoil together with living
organisms belonging to sedentary species, that is to say, organisms which, at
the harvestable stage, either are immobile on or under the seabed or are
unable to move except in constant physical contact with the seabed or the
subsoil.”

To summarize, the Philippines has the sovereign right and jurisdiction within the
Exclusive Economic Zone and Continental Shelf, to engage in the following activities: (1)
Exploration, exploitation, conservation, and management of non-living resources of the
seabed and subsoil and of the water superjacent to the seabed and subsoil. (such as gas and
oil); (2) Exploration, exploitation, and management of living, “sedentary species”; (3)
Marine scientific research and (4)Construction, operation and use of artificial islands,
installations and structures

In Conclusion, the Memorandum of Understanding between China and Philippines

is an Executive Agreement within the purview of a treaty as defined in Article 2 of the
Vienna Convention on the Law of Treaties, regardless of its designation since it is an
international agreement (1) between states, (2) made in writing and (3) governed by
international law10. Such Executive agreement is void for being in contravention of the
Preamble and Article XVII Section 2 of the 1987 Constitution of the Philippines, pursuant
to Article 7 of the Civil Code which states that “Administrative or executive acts, orders
and regulations shall be valid only when they are not contrary to the laws or the
Constitution.”.

10
Memorandum of Understanding on Cooperation on Oil and Gas Development between the Government of the
Republic of the Philippines and the Government of People’s Republic of China.
I. Context. Recalling the charter of the United Nations, the 1982 United Nations Convention on the Law
of the Sea, and the 2002 Declaration of the Conduct of the Parties in the South China Sea xxx
II. Basic Principles. xxx consistent with the applicable rules of international law. xxx