By: Jae de la Cruz and Arnel Mateo

In 2007, after the recently concluded 12th ASEAN Summit, the Philippines entered into several bilateral agreements with China in an effort to expand its bilateral relations with China. According to the Philippine government, these agreements with China will promote bilateral trade and development in agricultural, fisheries and food products, which will serve as a means for attaining food security, creating jobs, and alleviating poverty.

Held up against the light, however, and subjected to constitutional scrutiny, these Agreements are not only objectionable, they give us plenty of reasons to be afraid.

Background:

On January 15-16, 2007, Philippine President Gloria Macapagal Arroyo and Chinese Prime Minister Wen Jiabao discussed and witnessed the signing of several bilateral agreements between the Philippines and China. These agreements covered trade, cultural protection, agriculture, mass transportation and customs cooperation. In all, there are thirty-one agreements that have been entered into with the People’s Republic of China and/or various Chinese corporations. These Agreements cover a broad range of obligations, which include questionable financial grants and concessional loans, the undue removal of technical but protective barriers to trade. A total of thirty-one (31) agreements were signed, including eighteen (18) agri-business agreements. Most of these agreements took effect immediately upon signing. These agreements include the following:

a) Financial grant and concessional loans to be used on projects to be determined later by both governments,

b) The removal of technical barriers to trade,

c) Chinese investment and lease of more than 1 million hectares of land in thePhilippinesfor the cultivation of hybrid corn, hybrid rice, and hybrid sorghum to be exported toChinawith zero tariff treatment,

d) Development of an initial 40,000 hectares of agribusiness lands for cassava and sugar for ethanol production for China’s domestic consumption,

e) Aquaculture and all-around marine fishing, and

f) Private contracts for the utilization of land to produce bio-ethanol and to establish bio-fuel plants.

The eighteen agricultural/agri-business agreements are as follows:

MOA TITLE

Philippine Signatory ChinaSignatory
Memorandum of Understanding on Construction of Agriculture Technology Transfer Center and Grain Production and Processing Base in thePhilippines(for hybrid corn, hybrid rice and sorghum farming) Department of Agriculture (DA), Department of Agrarian Reform (DAR), Department of Environment and Natural Resources (DENR) People’s Government of Jilin, China Development Bank, Jilin Fuhua Agricultural Science and Technology Development, Co. Ltd.
Joint Development of Renewable Energy Project (40,000 ha. of land for sugarcane and cassava) DA, DAR, DENR Agricultural Department of the Guangxi Zuang Autonomous Region (ADGZAR)
Agreement on the Provision of a 5,000 sq. m. space for Philippine Tropical Fruits in the Jiangnan Fruit and Vegetable Wholesale Market DA GuangzhouJiangnen Fruit and Vegetable Wholesale Market Devt. Co. Ltd.
Joint Venture Agreement for the Manufacture of Bio-ethanol B.M. SB Integrated Biofuels Company Nanning Yongkai Industry Group
Joint Venture Agreement for the Manufacture of Bio-ethanol NegrosSouthern Integrated Biofuels Company Nanning Yongkai Industry Group
Joint Venture Agreement for the Establishment of a 150,000 liter per day capacity Bio-ethanol Plant One Cagayan Resource Development Inc. Nanning Yongkai Industry Group, China CAMC Engineering Co. Ltd.
Agreement for the Establishment of a 150,000 liter per day capacity Bio-ethanol Plant inPalawan Palawan Bioenergy Development Corporation China CAMC Engineering Co. Ltd.
Breeding and Culture of Grouper and other High Value Species Philippine China Fisheries Consortium, Inc. Xunshan Fishery Co. Ltd.
Establishment of a 36 Hectare Demonstration Farm for Sweet Corn DA GuangdongAcademyof Agricultural Sciences
Joint Venture Agreement on Fisheries Philippine Marine Technology Group Shandong Gaolu Co. Ltd.
Breeding and Culture of Abalone, Sea Cucumbers, Sea Urchins and Scallops Sun Warm Tuna Fishing Corp. Guangdong Guangyan Fishery Group Co. Ltd.
Candaba Water Resource Project Metropolitan Waterworks and Sewerage System China CAMC Engineering Co. Ltd.
Agreement on Cooperation by and betweenGuangdongFishery Administration and Bureau of Fisheries and Aquatic Resources Bureau of Fisheries and Aquatic Resources (BFAR) GuangdongOceanand Fishery Administration
Supply MOA with Zongbao Fiber Ltd. DA Zongbao Fiber Ltd.
Provision of SmallMobileIce Plant and Transport Facilities to Municipal Fishery Cooperatives and Associations DA China CAMC Engineering Co., Ltd.
Construction of Shipyard, Establishment of a Cold Storage facility and Upgrading/Rehabilitation of Certain Facilities at the Navotas Fishport Complex DA China CAMC Engineering Co. Ltd.
Expanding and Deepening Agriculture and Fisheries Cooperation DA Ministry of Agriculture
Agreement between the Department of Agriculture of the Republic of the Philippines and the General Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China in the field of Sanitary and Phytosanitary Measures DA General Administration of Quality Supervision, Inspection and Quarantine

The Agreements are objectionable on various grounds, the more notable of which are as follows:

I. The Agreements are made infirm by lack of transparency, consultation and people’s participation

It is mandated in our Constitution that the people and their organizations should be allowed to participate effectively and reasonably at all levels of social, political, and economic decision-making.[1] It appears that when our government entered into agricultural agreements with Fu Hua Company, Jiangnan Wholesale Market, China CAMCE Engineering Co.Ltd, Guang Zhuang Autonomous Region,GuangdongOcean and Fishery Administration among others, the affected sub-sectors in agriculture, and fisheries were not consulted prior to such agreements.

Moreover, since the RP-China Agreements were concluded, access to official records, and to documents and papers pertaining to said agreements have not been made available to the public. This violates the ConstitutionalStatepolicy of full public disclosure on all matters affecting the public interest,[2] as well as the Constitutional right of the people of access to information.[3]

Despite the far-ranging effects of the Agreements on the economic interests of ordinary Filipinos, the contracting agencies of the government have hidden under the excuse that these documents are “private contracts” and are thus beyond the ambit of the right to information – an absurd contention made by instrumentalities of the State that are actual signatories to the Agreements.

Indeed, the Department of Agriculture has subsequently provided petitioners with a copy of the Agreements entered into with the Chinese corporations after the Legislators’ forum held onSeptember 4, 2007. Petitioners assert that this official action by the DA does not operate to cure the defect of non-disclosure. The action is not rendered moot by the mere expedient of supplying petitioners with a copy of the contract later in the day. The right to public information attaches even before the contract is consummated, from the time the government made definite propositions.

II. The Agreements violate the principles of Agrarian Reform

The Constitution repeatedly cites the importance of agrarian reform for the realization of the country’s goals of national development and social justice, among others. It specifically mandated the enactment of a law on agrarian reform that will ensure the rights of farmers and regular farm workers. The highest law of our land could not be more emphatic in its directive to the State to “undertake the just distribution of all agricultural lands”. Thus, RA 6657, the Comprehensive Agrarian Reform Law of 1988 was passed and was touted as the centerpiece legislation of the Aquino government. Section 4 of the law provides for its scope which includes both public and private agricultural lands.[4]

The Fuhua Co. MOU’s proposed lease of one million hectares of land will effectively disenfranchise farmers and farmworkers working these lands; on the unlikely possibility that there are no such farmers / farmworkers present in these areas, it still behooves CARP implementers to distribute the lands to farmers and farmworkers that were not accommodated in the respective landholdings (due to land availability limitations) or to qualified ARBs who were unduly dislocated from their areas or because of undue land conversions, CARP exemption, or CLOA/ EP cancellations.

Concededly, the Department of Agriculture stated that the highest protections to our farmers will be afforded to them. In their first consultation, it stated that only lands already redistributed shall be subject of the lease. In their second consultation, it stated that forest lands under the management of the Department of Environment and Natural Resources shall be utilized. We assert that the text of the Agreement must prevail over statements in briefing papers and pronouncements subsequently made. The signatories must explain why there is a provision in the Fuhua Co. MOU wherein the Philippine government undertakes to “provide Fuhua Co. with vital information as to their legal status, susceptibility to Comprehensive Agrarian Reform Program (CARP) coverage and other critical information to allow the Fuhua Co. to adequately evaluate their potential to participate in the Project. xxx” [tem IV.4) If a parcel of land is only “susceptible to CARP”, then obviously, it has not undergone CARP yet. If the lands to be covered are limited to forest lands, why is there a mention of CARP at all?

Assuming that the lease will cover lands redistributed to ARB’s, the MOU is sorely lacking provisions that prescribe certain minimum standards for the protection of the interests of ARBs willing to participate in the Project. For example, there are no provisions that ensure the employment of willing and able ARBs (or even non-ARB landowners) in the ventures to be set up in the areas to be leased out to Fuhua.Co. Even if one of the undertakings of the company under the MOU is to “assist the Second Party in providing ARBs and landowners with new opportunities to engage their landholdings to productive use and providing employment opportunities as needed xxx” (Item II.1), there is nothing in that statement that commits to employ, much less promises priority for employment of willing and able ARBs and landowners in connection with Fuhua Co.’s business/es in such lands.

In sum, as long as agricultural lands will be the subject of the lease, whether redistributed or about to be redistributed, the RP-China Agreements reformulates the entire premise of agrarian reform as the primary social policy for rural development and peasant empowerment.

The essence itself of the Agreements violates the underlying goals of agrarian reform. There is a clear undermining of the basic principle that agrarian reform is the primary vehicle through which rural development may be attained. Agri-business ventures should only be perceived as interim measures, to arrest the burgeoning poverty and dependency in the meantime, before farmers can acquire the necessary skills to cultivate the lands on their own. With a lease of twenty five years, extendible upon agreement by the parties, the notion of agri-business ventures as interim measures are rendered nugatory.

III. The Agreements pose threat to our marine resources and the livelihood of small fishers

The MOA between Philippine Marine Technology Group and Shandong Gaolu Co. Ltd and the MOA between Philippine China Fisheries Consortium and Xunshan Group Co., Ltd., allow the parties to engage in all aspects of aquaculture, without making provisions for the protection of the environment. It does provide that said MOAs must be implemented in accordance with the Fisheries Code[5] , but the problem with the said Code is that it does not provide how aquaculture must be regulated and it does not provide for prohibited acts in the practice of aquaculture. There is what we call Code of Practice for Aquaculture[6], but said Administrative Order does not in any way substantially provide proper safeguards on how aquaculture should be practiced.

It is mandated in our Constitution that the State shall protect the right of the people to a balanced and healthful ecology in accord with the rhythm and harmony of nature.[7]

The agreements appear to promote unregulated and massive aquaculture, which has been found to be detrimental to the environment. The aquaculture industry entices consumers with rock-bottom prices and illusions of sustainability, but the repercussions of this “blue revolution” are felt individually and at a global level. Aquaculture is being marketed as a new protein source, but consumers aren’t hearing all the facts. Fish feed, such as plankton, is harvested from the ocean to feed farm-raised seafood, leaving wild fish populations at even greater risk and ultimately causing a net loss of protein.[8] This would bring about loss of food to other aquatic animals and further lead to their extinction.

Not only are the oceans still being depleted, but many aquaculture farms depend on staggering amounts of antibiotics, fungicides, algaecides and pesticides to fight diseases that run rampant in the polluted ponds created to harvest the shrimp. Research shows that over time, bacteria exposed to antibiotics may become more resistant to those antibiotics, and patients infected with such bacteria are more difficult to treat. RP-China agreements provide that Philippines has extensive marine and inland resources.[9] Contrary to what we are led to believe, our fishery resources are not that rich. Recently, international media reported that global fisheries will collapse by year 2048. Sadly, our country may not even have till 2048…perhaps 2020. There is an urgent need to realize this, cease imagining a somewhat infinite source of marine blessings and start stitching efforts to diligently implement fishery policies. Incidents like poaching of foreign fishers and local government units losing out to illegal fishing activities are but amongst the numerous plea from the seas.[10]

Marine scientists have documented widespread destruction of the coastal environment noting that majority of the coastal ecosystems, the coral reefs, the sea grass beds and the mangroves have been reduced to rubble and decimated by wanton conversion into fishponds, aside from wholesale destruction due to an absence of coastal resource management initiatives. Fisheries experts from the academe and NGOs have been documenting an alarming decline in fisheries resources.

It must also be noted that the MOA between GDOFA and BFAR allows all-around cooperation in aquaculture, fishery products processing, marine fishing, and aquatic products and fisheries necessities trading.

Said agreements will expose our marine resources to Chinaand thus violate the Constitutional mandate of the State to reserve the use and enjoyment of the nation’s marine wealth exclusively to Filipino citizens. These agreements violate the mandate of the State to protect and conserve our marine resources. [11] Further, it violates the policies enshrined in the Fisheries Code to achieve food security as the overriding consideration in the utilization, management, development conservation and protection of fishery resources in order to provide the food needs of the population.[12]

  1. IV. The Agreements violate the National Patrimony Provisions of the Constitution

Section 2, Article XII of the Philippine Constitution reads in part:

“[A]ll lands of the public domain xxx and other natural resources are owned by the State. With the exception of agricultural lands, all other natural resources shall not be alienated. The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. The State may directly undertake such activities, or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least sixty per centum of whose capital is owned by such citizens. Such agreements may be for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and under such terms and conditions as may be provided by law. xxx”

On the other hand, Section 3, Article XII of states:

“Lands of the public domain are classified into agricultural, forest or timber, mineral lands, and national parks. Agricultural lands of the public domain may be further classified by law according to the uses which they may be devoted. Alienable lands of the public domain shall be limited to agricultural lands. Private corporations or associations may not hold such alienable lands of the public domain except by lease, for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and not to exceed one thousand hectares in area. Citizens of thePhilippines may lease not more than five hundred hectares, or acquire not more than twelve hectares thereof by purchase, homestead, or grant.”

Read together, it is clear that under no circumstances may 100% foreign-owned corporations lease agricultural lands of the public domain exceeding one thousand hectares in area.[13]

Petitioners call the attention of this Honorable Court to the Jilin Fuhua MOU. In said MOU, the Philippine government (First Party) undertakes to:

“1. Assist and provide full support to Fuhua Co. in identifying one million (1,000,000) hectares of land which is lawfully owned by the Philippines that are ideal for production of hybrid corn, hybrid rice and hybrid sorghum,

2. Lease out the identified land for a term of 25 years. Fuhua Co. may renew the lease upon expiry for another 25 years on a mutual benefit basis.

xxx”

The phrase “which is lawfully owned by the Philippines” is too vague as to be susceptible to many interpretations. Taken at face value, it could well mean agricultural lands of the public domain.

There is a clear irreconcilability between the provisions of the Constitution, and the provisions of the MOU with Fuhua Co. and the MOA with ADGZAR. Only corporations or associations at least sixty per centum of whose capital is owned by such citizens may lease these alienable lands of the public domain. Fuhua Co. is a “company of limited liability legally registered in Jilin Province of the People’s Republic of China” (2nd Prefatory Clause, MOU). ADGZAR, for its part, and as mentioned earlier, is the Agricultural Department of Guangxi Zuang Autonomous Region. On the assumption that both companies are 100% foreign-owned, it would be illegal for the same to lease alienable lands of the public domain. Even assuming that they comply with the capital requirement, both still cannot lease more than 1,000 hectares of land.

In the February 20 consultation, the Convergence Group said that only forest lands will be used. Forestlands are lands of the public domain and may likewise not be leased. The averments that the modes contemplated are joint venture and co-management are not availing. The provisions of the contract prevails over subsequent statements made by the national agencies.

Conclusion

Indeed, a careful study of the bundle of RP-China Agreements reveals not only serious ambiguities, but provisions so patently skewed against Philippine interests that nothing less than a comprehensive review is in order. Taken on their own, the undertakings embodied in the Agreements will have immediate deleterious consequences on the lives of our ordinary countrymen. As a precedent, they alter a policy framework where land and marine resources are protected for Filipinos, domestic industries are nurtured, agrarian reform is of the highest order, and food security is primordial.

From one consultation to another, the Convergence Group has kept on changing its track. The original agreement with Fuhua speaks of lease of mentions agrarian reform beneficiaries and CARP. Then, during the latest consultation, the agencies now say that forest lands will be covered and the operational mode would be joint venture and co-management. This flip-flopping lends itself to serious inquiry, if not suspicion. That our government agencies can sign international agreements without the benefit of full study and without exploring its widespread implications does not make for very good governance or sound diplomatic practice.

Indeed, the need to stop the implementation of the Agreements and to call for a comprehensive review is urgent and compelling. Once allowed to set in, their catastrophic effects may yet prove to be irreversible.


[1] Section 16, Article 13, 1987 Constitution

[2] Section 28, Article 2, 1987 Constitution

[3] Section 7, Article 3, 1987 Constitution

[4] SECTION 4. Scope. — The Comprehensive Agrarian Reform Law of 1989 shall cover, regardless of tenurial arrangement and commodity produced, all public and private agricultural lands xxx, including other lands of the public domain suitable for agriculture.

More specifically the following lands are covered by the Comprehensive Agrarian Reform Program:

(a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No reclassification of forest or mineral lands to agricultural lands shall be undertaken after the approval of this Act until Congress, taking into account ecological, developmental and equity considerations, shall have determined by law, the specific limits of the public domain.

(b) All lands of the public domain in excess of the specific limits as determined by Congress in the preceding paragraph;

(c) All other lands owned by the Government devoted to or suitable for agriculture; and

(d) All private lands devoted to or suitable for agriculture regardless of the agricultural products raised or that can be raised thereon.

[5] REPUBLIC ACT NO. 8550

[6] FISHERIES ADMINISTRATIVE ORDER NO. 214 :Series of 2001

[7] Section 16, Article 2, 1987 Constitution

[8] WENONAH HAUTER, ”The Dangers in Aquaculture’s Boom”,Washington

[9] MOA on cooperation between the Bureau of Fisheries and Aquatic Resources (BFAR) and theGuangdongOcean and Fishery Administration

[10] Ginalyn Luaton, “Decoding the Fisheries Code: Has it gone to the fishes or off with the mummies?”,Feb 26, 2007

[11] Section 2, Par 2, Article 12, 1987 Constitution

[12] Section 2, Par a., R.A. 8550

[13] To emphasize the mandatory character of this constitutional provision, it is articulated in ordinary legislation. See for example, Republic Act 7900, or An Act to Promote the Production, Processing, Marketing and Distribution of High-Valued Crops, Providing Funds Therefor, and for other Purposes, which allows farmer-cooperatives to lease out their lands for a period of 25 years, and not to exceed 1,000 hectares in land area. (Section 6).

Primer on the RP-China Agreements

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