Manila and Beijing's memorandum of understanding (MOU) on oil and gas development may lead to a "win-win formula" that could resolve the South China Sea dispute, Supreme Court Justice Antonio Carpio said Friday.
The senior justice believes that a service contract-type agreement, similar to the Malampaya gas project off Palawan, may usher in a period where China is satisfied with splitting income instead of claiming the Philippines' rights to the vital sea lane.
Being a service contractor requires compliance to Philippine laws and an admission that the gas in the area belongs to the country, Carpio said in an interview with political analyst Richard Heydarian.
"That would be the solution because China will get maybe half of the income but they don't get the sovereign rights. I envision that as the final settlement," the magistrate said.
A vocal advocate of the Philippines' maritime claims, Carpio said he supports the MOU signed by President Rodrigo Duterte and Chinese President Xi Jinping during the latter's state visit.
This is because he believes that such a deal, which "envisions a service contract," may pave the way for China to enter what he calls the "third phase" of the dispute: agreeing to getting half of the income in an oil and gas development project and no longer claiming sovereign rights in the exclusive economic zone (EEZ) of other claimant states.
The first phase was when China "claimed everything," and the second was after the landmark arbitral ruling that invalidated the Asian giant's nine-dash line, resulting in Beijing agreeing to "meet us halfway," he said.
In a forum in Makati earlier in the day, Carpio said that whether or not a sea dispute settlement nears depends on the result of negotiations in the working committee between the China National Offshore Corporation (CNOOC) and the Philippine service contractor.
He did not rule out the possibility that the talks will see China going back to a "joint exploration and exploitation" -- which he considers an unconstitutional route.
"But there is also the possibility that China will realize that service contract may be the only win-win formula to resolve the maritime dispute in the entire South China Sea, and will thus cooperate with the Philippines through Philippine service contractors," he said.
According to Carpio, the MOU that Duterte and Xi signed was the draft prepared by the Philippine Department of Foreign Affairs -- not its Chinese counterpart, which wanted a joint exploration and exploitation that would have violated the Constitution.
The DFA then drafted a "vastly different" document that proposed a cooperation on oil and gas through service contractors, which he said are valid under the Constitution.
Carpio acknowledged that China may interpret the MOU differently, but said "this is the opportunity to discuss service contract with CNOOC."
"Anyway, we are well protected and we have nothing to lose under the MOU. Whether we are in the third phase or still stuck in the second phase, we will know for sure within 12 months," he said in the forum, referring to the deadline for the working group to hammer out a deal. —LDF, GMA News