The Spratly agenda
By Perry Diaz
Three days before President Benigno “P-Noy” Aquino III embarked on a four-day state visit to China, it was reported in the news that the Philippine government had agreed to allow the Chinese government-owned China Petroleum and Chemical Corporation (Sinopec) to conduct oil exploration in the Spratly Islands in the West Philippine Sea (South China Sea).
According to Department of Trade and Industry (DTI) Undersecretary Cristino Panlilio, Sinopec would invest $1 billion for joint oil exploration, which is a part of the $7-billion investment package that is expected to be signed during P-Noy’s state visit. Panlilio said that they didn’t expect any problem with the “deal” because Sinopec had already agreed to conduct the oil exploration – conveniently — “under Philippine law.”
They were optimistic of the deal pushing through that Sinopec didn’t waste any time looking for a local partner. The deal was scheduled to be signed on the first full day of P-Noy’s state visit. But on the eve of P-Noy’s departure, the deal fell through because Sinopec failed to secure the permission of the Chinese government.
What is strange was the speed of which the deal was put together. But what is strangely contradictory was the fact that from the get-go, P-Noy declared unequivocally that the Spratly dispute would not be brought to the table in Beijing. The official Malacañang line was: “The trip would focus primarily on boosting trade, economic cooperation and tourism between the two countries.”
But what P-Noy didn’t publicly declare was that his administration had already worked out a deal with Sinopec. Should I presume that P-Noy didn’t know what Panlilio and his boss, DTI Secretary Gregory L. Domingo, were doing under his nose? Or, should I say that P-Noy was privy to the deal, which seems to have been “pre-cooked” — or as we say it in Pilipino, “lutong macau” – behind closed doors? If so, then he was not being forthright with his “bosses” – the people.
Although the oil exploration deal had gone sour, the Spratlys and the South China Sea are still very much at the top of China’s political and economic agenda. Why not? According to the Chinese Ministry of Geology and Mineral Resources, the area around the Recto Bank — which is within the 200-mile Exclusive Economic Zone (EEZ) off the island of Palawan — is estimated to have oil reserves of 17.7 billion tons or approximately 126 billion barrels. China estimates that $50 billion worth of oil could be extracted annually.
China is aware that the United Nations Convention on the Law of the Sea (UNCLOS) established the 200-mile EEZ on December 10, 1982. Part V Article 57 of UNCLOS clearly and unequivocally states: “The exclusive economic zone shall not extend beyond 200 nautical miles from the baselines from which the breadth of the territorial sea is measured.”
China’s foreign oil dependency
With the turmoil in the Middle East and North Africa heading towards the removal of authoritarian regimes – Tunisia, Egypt, and Libya were already liberated from dictators and Syria and Yemen coming next – it’s very likely that the new governments in these countries would align with the United States and her NATO allies. And that would be bad news for China who had spent years developing strong ties with the likes of Muammar Ghadaffi of Libya. The new government of Libya — a major oil supplier to China under Ghadaffi — would most likely redirect its oil exports to NATO countries that helped the Libyan rebels bring down the Ghadaffi dictatorship.
With at least 60% of China’s oil consumption coming from foreign sources — 80% of which are from the Middle East and North Africa — China’s leaders are jittery about losing a good amount of its foreign oil supply. With the Spratlys much closer to home, drilling for oil in the Spratlys would be a major geopolitical victory for China.
It is interesting to note that former president Gloria Macapagal Arroyo signed the Joint Marine Seismic Undertaking (JMSU) with China and Vietnam in 2005-2008 in which 80% of the area covered by the JMSU was within the Philippines’ undisputed territory. It didn’t take too long for the situation to spiral into a territorial dispute between the Philippines and China.
Soon after the JMSU was signed, China started claiming the Recto Bank and other parts of Philippine territory as part of her “core national interests,” which means that it is non-negotiable. The Recto Bank is just 80 nautical miles from the province of Palawan — within the 200-mile EEZ – and 575 nautical miles far away from Hainan Island in China.
The fact that China ignored the provisions of UNCLOS of which she was a signatory, reinforces the notion that China is desperate for oil; therefore, she would do everything in her power – including military — to take over the entire South China Sea. As Mao Zedong once said, “Power comes from the barrel of a gun.” It worked during the Chinese communist revolution; it should still work today in China’s quest – and thirst — for oil.
Had the Sinopec oil exploration deal gone through, it would have been an extension of the JMSU agreement with China… with Vietnam out of the picture. And to think that P-Noy allowed the behind-the-scene negotiation with Sinopec to progress while he publicly stated that the Spratly issue would not be brought to the table in Beijing, makes one wonder what P-Noy’s real Spratly agenda is? When Gloria signed the JMSU in 2005, she was accused of selling out the Spratlys to China. Had the Sinopec deal gone through, would it have been perceived as a sell-out, too?
There’s absolutely no reason why we should jointly explore with China what is rightfully ours. As the old Filipino adage says, “Lulutuin tayo sa sarili nating mantika” (They’ll cook us with our own oil), the Sinopec deal would have done exactly that.
On August 31, the bilateral meeting between P-Noy and Chinese President Hu Jintao produced no concrete agreement on the Spratly dispute other than “to agree to disagree.” P-Noy told Hu the position of the Philippine side that “this is a regional problem, and it requires a regional solution.” Hu, on the other hand, was steadfast on China’s position that “the issue should be resolved peacefully, and that Beijing would encourage the development of the South China Sea.”
It’s interesting to know, however, that China has been unwavering in its position that the territorial dispute should be settled bilaterally with each of the claimant-nations as opposed to the Philippines’ position that all the six claimant-nations should all come to the table to settle the territorial dispute.
Other than the aberrant Sinopec “misdeal,” I hope that P-Noy would bring home the bacon, not a Peking duck marinated in Spratly oil.