DFA chief: Nix deals with China companies tied to WPS buildup

Foreign Secretary Teodoro Locsin Jr. on Friday said he would recommend the termination of government contracts with Chinese companies involved in China’s artificial island building on maritime features in the West Philippine Sea (WPS).

Locsin made the remarks days after the US Department of State and Department of Commerce announced that Washington would impose sanctions against 24 Chinese companies involved in the construction of artificial islands in the South China Sea and turning them into military outposts.

In an interview with CNN Philippines, Locsin was asked if the Philippine government would impose similar sanctions on these Chinese companies.

“Yes, if I find that any of those companies are doing business with us, then I would strongly recommend we terminate that relationship with that company,” he replied.

“If they were in any way involved in the reclamation, then it becomes consistent on our part to terminate any contract with them,” Lacson said. He noted that the Chinese companies “could sue us back.”

It was unclear what would President Duterte’s reaction be to his foreign secretary’s position, considering that he had been nurturing warm relations between Manila and Beijing since he took office in 2016.

In exchange for aid and investments, Mr. Duterte had set aside the international arbitral tribunal’s ruling in 2016 which favored the Philippines by invalidating China’s expansive claims over the South China Sea, including the West Philippine Sea.

‘About time’

Presidential spokesperson Harry Roque did not directly comment on Locsin’s remarks and whether the administration would review the contract to build the Sangley airport in Cavite province, a major project that would involve Chinese companies.

Instead, Roque said in a statement that he hoped that the United States and China would resolve their disputes “amicably and peacefully” for the benefit of all Southeast Asian nations.

He said the President, as chief architect of the country’s independent foreign policy, would consider “what is best for the country’s ‘Build, Build, Build’ program” and keep the national interest as his main consideration.

Sen. Francis Tolentino and Sen. Panfilo Lacson supported Locsin.

“It is about time we truly asserted our sovereign claims in the West Philippine Sea even through diplomatic means,” Tolentino said.

He said, however, that the actions of the Department of Foreign Affairs should be consistent with the national interest and not prompted by Washington’s move.

Lacson, the Senate defense committee chair, welcomed Locsin’s move as the country’s top diplomat.

“China’s recent display of arrogance in the West Philippine Sea by accusing us of infringing on China’s sovereignty and security … even urging the Philippine side to immediately stop illegal provocations, tops it all,” Lacson said.

Locsin said he would consult the transportation and trade departments, as well as the National Economic Development Authority, on what to do with the pending contracts with the Chinese companies.

Sangley project

The US commerce department sanction list included China Electronics Technology Group Corp. and China Communications Construction Co. (CCCC) and their subsidiaries, which are involved in China’s Belt and Road Initiative.

CCCC is the partner of Lucio Tan’s MarcoAsia Corp. in a joint venture that was recently awarded the initial phase of the Sangley Point International Airport project.

Cavite Gov. Jonvic Remulla on Friday distanced himself from CCCC, whose participation he had previously supported for the $10-billion Sangley airport project.

“It’s a national security issue. If the President says, if the Department of National Defense says that it’s a security risk entering into an agreement with them, then we will cease or terminate the agreements immediately,” Remulla said in an ABS-CBN News Channel interview on Friday.

Remulla on ‘revelations’

Remulla later told the Inquirer he was unsure of CCCC’s involvement in the island-building until the “revelations from the US government.”

“The President will have to make an executive decision in light of these revelations,” Remulla said.

The Cavite government carried out the bidding for the airport—a rare local government project with national implications. But it was clouded by controversy.

The project’s confidential documents and feasibility study seen by the Inquirer indicated a Chinese partner was favored from the start.

Among others, the documents identified the project as among those to be implemented under a cooperation agreement on China’s Belt and Road Initiative that was signed in Manila on Nov. 20, 2018.

The July 2019 study indicated that Chinese banks and state-owned enterprises could finance up to 98 percent of the airport project. It specifically named companies such as CCCC, China Airport Construction Group and China National Import and Export Technology.

Other bidders who saw the documents complained about the short two-month time frame given for the auction. Last Feb. 14, the MacroAsia-CCCC consortium was awarded the project after emerging as the only group that participated.

“Our biggest concern is the completion of this project,” he told the Inquirer last February, a week before the project was awarded to MacroAsia-CCCC.

MacroAsia-CCCC has only to submit the final postqualification requirements before being declared the Cavite government’s joint venture partner. So far, they have requested several extensions, citing the COVID-19 pandemic.

Locsin said he would also study the nature of the sanctions imposed by Washington on the Chinese companies, pointing out that the Philippines continued to do business with Russia and Iran despite sanctions imposed by the United States and other Western countries.

He said he would also consult with international lawyers on the possibility of claiming damages from China stemming from the destruction of coral reefs and fishing grounds during the reclamation and island-building.

Locsin reiterated his rejection of a proposal, chiefly from his predecessor, Albert del Rosario, that the Philippines ask the United Nations General Assembly to compel China to abide by the 2016 arbitral decision that, among other things, declared China in breach of the UN Convention on the Law of the Sea.

He said China would be able to rally support from small countries to its side and “we’ll lose it.” —WITH REPORTS FROM MARLON RAMOS AND JULIE M. AURELIO