China’s joint ventures deals unsuccessful, says maritime expert

University of the Philippines Institute for Maritime Affairs and Law of the Sea Director Dr. Jay Batongbacal
INQUIRER FILE PHOTO/LYN RILLON

The joint development agreements (JDAs) China has with other countries have been “unsuccessful,” a maritime expert said on Wednesday as lawmakers warned the government against allowing itself to be taken in through Beijing’s “debt trap diplomacy.”

“The success rate, measured in both actual production of petroleum and improvement of relations between the parties in relation to their dispute, leaves very much to be desired,” lawyer Jay Batongbacal, director of the University of the Philippines (UP) Institute for Maritime Affairs and Law of the Sea, wrote in a post on Facebook.

Batongbacal said China had JDAs with Vietnam, North Korea, South Korea and Japan, with whom it also had longstanding maritime disputes.

China, he said, also had trilateral agreements with South Korea and Japan, and Vietnam and the Philippines.

Batongbacal discussed China’s JDAs with other countries in the second of a series of Facebook posts that he began on Monday in an effort to make the public understand better what the Duterte administration, and the country, would be getting into with a joint development with China in the West Philippine Sea.

West Philippine Sea refers to waters within the Philippines’ 370-kilometer exclusive economic zone (EEZ) in the South China Sea.

‘Co-ownership’

President Rodrigo Duterte has described the proposed joint exploration with China as like  “co-ownership.”

In his Facebook post, Batongbacal gave some examples of China’s failed JDAs with other countries.

The China-Vietnam agreement for joint development in the Gulf of Tonkin has not been implemented, he said.

The JDA appears in a clause in a 2002 agreement delimiting the maritime boundaries of the two countries in the gulf, which is located off the coast of northern Vietnam and southern China.

In 2008, South Korea and Japan entered into separate JDAs with China. Batongbacal said these were both described as “brief ‘consensus documents’ lacking the necessary technical and legal details.”

“They were more like political statements rather than contract provisions. Cooperative efforts did not go far beyond the initial announcements that the parties would establish the domestic procedures and arrangements for the JDA. Tensions [on] the Korean Peninsula and souring of relations between China and Japan after 2010 stalled further efforts,” he said.

JMSU with the Philippines

Batongbacal recalled  that the 2005 Joint Marine Seismic Undertaking (JMSU) among  China, Vietnam and the Philippines lapsed in 2008 “amid allegations of corruption.”

To this day, the JMSU results have yet to be made public, he said.

“On the whole therefore China’s track record for joint development with various partners [has] been consistently unsuccessful in either resulting in the discovery and development of reserves, or definitely improving their relations with their joint development partners,” Batongbacal said.

He said this was because of “the ambiguity of the JDAs China has been willing to sign and the issues over implementation and intention arise and interfere because inconsistencies between text and conduct create mistrust and lead to nonpursuit of the commitments.”

Chinese state-controlled media reported on Monday that $7.34 billion in loans and grants given by Beijing to Manila would be repaid under an arrangement that included natural resources as collateral.

Malacañang denied the report on Tuesday, but Muntinlupa Rep. Ruffy Biazon on Wednesday called for a “categorical statement of rejection of the concept of natural resources as collateral” from the government.

Foreign loan collateral

Using the country’s natural resources should never be a condition or option when the government enters into foreign loan agreements, Biazon said.

He said the Philippines should not be easily swayed by China’s “enticing proposals” but instead deftly steer clear from the template that the Chinese had used in their loans to other developing countries.

Bayan Muna Rep. Carlos Isagani Zarate, speaking at a news briefing, warned against China’s “debt trap diplomacy.”

“We may fall victim to China’s debt trap, as we get loans and eventually, because there are collateral and conditions, the Filipino people will only suffer,” Zarate said.