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04:58 PM July 19th, 2011

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By: Ted Laguatan, July 19th, 2011 04:58 PM

The Spratly Islands is an archipelago of 750 small islands, islets, cays, reefs and atolls widely scattered off the coasts of Malaysia, the Philippines and Vietnam. It has a total land area of only about four square kilometers where hardly anything grows that’s of significant value.

While these real estate may appear worthless, beneath are vast deposits of gold — black gold — oil. Natural gas is also present in huge quantities as evidenced by the Malampaya example.

The Philippines, Vietnam, Malaysia and Brunei are claiming those portions of the Spratlys — which are within what is referred to by the 1982 United Nations Convention Law of the Sea (UNCLOS) as their Exclusive Economic Zone — an area within a 200 mile radius from a country’s baseline.

On the other hand, China is claiming everything — those inside other countries’ territories as well as those outside.

While China is a signatory to this 1982 agreement among nations, its energy needs are recklessly driving the dragon into seeking to grab oil and natural gas that belong to other countries — the Philippines included.

Seventy percent of China’s present oil needs is imported, mainly from Russia and the rest from other sources. The reality of being hostage to the demands of suppliers or the risk of disruption of continuous supply threatens China’s astounding growth as an economic powerhouse.

Industries and manufacturers throughout the world have found it more advantageous and practical to farm out their production needs to China. Not only does this result in lower production costs, absence of labor problems and no management issues — it enables companies to focus on marketing operations which results in more profits.

The Chinese deserve much credit for coming out with quality products that sell cheaper. Great for consumers everywhere. The new prosperity is also good for the Chinese people — notwithstanding that much of the new wealth has yet to trickle down to the masses — which hopefully will happen over time.

The Chinese people deserve a better life after years of poverty and suffering from the excesses of the Cultural Revolution.

China’s owes much of its booming economy to former Premier Deng Xiaoping who ditched rigid closed communist policies in favor of free market reforms.

The future looks very bright for the Chinese people. The planet’s fastest growing economy has now surpassed Japan as the second largest economy in the world. As more companies look to farming out their production needs to China and Chinese companies expand their operations — expectedly its need for oil and energy resources will continue to increase.

However, this need does not justify grabbing the oil and natural resources belonging to smaller countries in the region and using brute force — which China appears ready to do. If China proceeds with its gorilla tactics, it will be viewed as a bully and as a thief by the global community. Its government will lose the respect of other nations, cause unrest and instability in the region and foment much continued resentment among the victim nations.

These negatives for China will have serious consequences including the threat of war against several countries — including even possibly against the United States whose interest is stability in the region as well as non disruption of its commercial regional activities here. If China’s  image of being  untrustworthy and a bully escalates — not only will it deprive itself of  valuable international goodwill — other countries might also ally themselves into a united front against Chinese abuse of power and for self defense.

On June 26, 2011, aware of the repeated forced intrusions into Philippine, Vietnamese and other countries’ maritime territories, the US Senate unanimously passed a resolution condemning China’s use of force to intimidate it’s smaller neighbors as well as affirming the US resolve to use military force if need be to contain China.

China is a goliath with a population of around 1.3 billion people. It has the world’s largest military force with 2.3 million soldiers. It also has nuclear capabilities, a formidable navy and air force. It can easily carry out a successful grab of the oil and natural gas resources of Vietnam, Malaysia, the Philippines and other countries.

These countries do not have the military capabilities to face up to China. In 1988, a contingent of Vietnamese sailors who tore down Chinese flags and buoy markers in part of the Spratlys which were within Vietnam’s Exclusive Economic Zone — were slaughtered by Chinese gunboats using 37 mm cannons. Video records of this episode may be seen on YouTube. The Vietnamese were not fighting when deadly firepower was used on them. Some 66 Vietnamese sailors were killed.

The US stepping into the picture to preserve the balance of power and maintain geopolitical stability is much welcomed by countries in the region. Only the American eagle can neutralize the Chinese dragon.

For the Philippines, why are the Spratlys worth dying for?

China’s official state news agency Xinhua reported a few weeks ago that around $30 billion will be invested in building modern oil drill platforms. An ultra advanced platform costing almost a billion dollars has just been completed and ready for transport to the drilling site this July. It is suspected that this site is in Philippine UNCLOS territory as the Philippines’ previous president allowed the Chinese to freely explore these waters for oil searches during her term.

In talks with Foreign Affairs Secretary Albert Del Rosario, China insists that all of the Spratlys are theirs including those clearly within Philippine territory — and that their claim is non-negotiable. This bold assertion means that they put a very high value on those parts of Spratlys inside Philippine territory and appears from their actuations that they are willing to use force if need be.

Xinhua confirms that the target is to drill in 800 locations  in the South China Sea (renamed by the Philippines as West Philippine Sea) — but does not specify where. The projected production is equivalent to $50 billion annually.

If a big part of such wealth goes to its rightful owners, the Filipino people — mass poverty can likely be eliminated. New industries and enterprises will proliferate from the infusion of so much national capital providing well paying jobs for our people. No longer will we be a nation of slaves where millions of our people have to work in lonely far away foreign lands separated from their families.

The superior education, nutrition, health care and housing these discovered riches will provide to millions of Filipino children will enable them to flower to their fullest potential.

China’s intrusion into Philippine territory to take this promise of a brighter future from the Filipino people should be resisted with everything that we can muster — with blood if necessary. China’s use of force to take away our oil for free must be condemned in no uncertain terms and brought to the attention of the world. If  they want our oil, they should pay fair prices for it — not steal it.

The Philippines’ claim is based on existing law agreed upon even by China and the other countries in the region — the UNCLOS. The target sites for oil well drillings are also roughly about 100 miles more or less from Philippine shores whereas these are around a thousand miles from Chinese shores.

China’s claim is based on an absurdity. Supposedly, an ancient map from the Han Dynasty about 2000 years old — defined the limits of the Chinese kingdom which includes all of the West Philippine Sea and surrounding lands. This self proclaimed right to distant other country owned territories has neither rhyme nor reason — legally speaking.

Assuming such a genuine map existed, that claim is about as valid as the Italian government claiming ownership of most of Europe, parts of Africa and parts of Asia because these were once all part of the Roman empire. The Roman empire ceased to exist hundreds of years  ago — and so did the Han dynasty. Country boundaries keep changing over time because of various factors that I need not go into.

We must also be aware that China is not limiting its options to using force in seeking to acquire our energy resources. We should face up to the gruesome reality that many of our leaders and politicians are thieves and are so corrupt and willing to give all kinds of concessions to China (as well as to other private investors) for personal gain.

In 2004, then President Gloria Macapagal Arroyo signed a tripartite agreement with China and Vietnam known as the Joint Marine Seismic Undertaking (JMSU) involving seismic exploration of 142,866 square kilometers west of Palawan. More specifically, it is an agreement  between the Philippine National Oil – Exploration Corporation (PNOC-EC), China National Oil Offshore Corporation (CNOOC) and Vietnam Oil and Gas Corporation (PetroVietnam).

The problem with this agreement is that all of the area to be explored is within the Philippines’ 200 mile Exclusive Economic Zone under UNCLOS including areas not even claimed by China or Vietnam. It hardly makes sense to expose one’s wealth to countries that may be aiming to get it without respecting the Philippines’ ownership rights. It’s like showing the fox where the chickens are hidden. It does not include explorations outside Philippine waters.

Under this JMSU agreement, Chinese vessels would conduct the exploration, Vietnam would process the data gathered and the  Philippines’ PNOC would interpret the results. The explorations were supposed to end in January 2008 but there is no confirmation that it did.

What Barry Wain confirms about the JMSU is that “it was largely a sellout on the part of the Philippines”. Wain is a respected Singapore based researcher for the Institute of Southeast Asian Studies. In an article he wrote for the widely read Hong Kong journal Far Eastern Economic Review, he said:

“The Philippines has made breathtaking concessions in agreeing to the areas of study including parts of its continental shelf not even claimed by China and Vietnam.”

It appears from some accounts that Vietnam was hesitant to join the agreement but may have been included later on after Arroyo gave a 100 percent ok to China’s exploration — probably to make the China-Philippine deal look more palatable and legitimate.

Arroyo critics suspect she entered into secret deals with the Chinese in return for $2 billion in loans for Philippine projects including the ZTE Broadband deal and others in which she and her husband are alleged to have received millions in equivalent US dollars of kickback. This would be a clearcut case of treason if such were the case.

The Malampaya Natural Gas project is also another blatant example of how our leaders sell out our precious natural resources. The share of the Philippines for the profits is only 10 percent whereas Chevron and Shell will split the rest of the 90 percent. There is not even an agreement for a transfer of technology later. Any fool can see that this is hardly a fair agreement.

The same anomalies and distortions have happened in providing mining rights to foreigners and local investors.

Perhaps in a very real way, President Benigno Aquino III may be a real blessing to the country. He may have some weak points but I strongly believe that he is not greedy, dishonest or corrupt — unless proven otherwise. I do not think he will betray the legacy of his martyred father and sincere mother who tried their best to serve the people.

If he is able to successfully defend the vast oil and natural gas resources of the country against military forces from the outside and from the corrupt elements within — and use this tremendous wealth to drastically improve the lives of so many of our people — he might  become truly a really great president.

[Note: The California State Bar honors Atty. Ted Laguatan as one of the best lawyers in the US. He is one of only 29 lawyers officially certified as an Expert Specialist continuously for more than 20 years. He also does accident injuries, wrongful death and complex litigation. For communications: (San Francisco area): 455 Hickey Blvd. Suite 516, Daly City,Ca 94015 Tel 650-991-1154 Fax 650-991-1186.]

Email laguatanlaw@gmail.com

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