RP-Sino ties in ‘jeopardy’

March 31, 2008  --  Got something to say?
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MANILA A senior diplomat has warned that the Philippines close relations with China is in serious jeopardy owing to the controversy surrounding the national broadband deal (NBN) with ZTE Co. that has dragged other bilateral agreements with that country.

The official said the NBN-ZTE controversy is not in anyway linked with the Joint Marine Seismic Undertaking (JMSU) and even the Spratly issue that have been subject to diplomatic reviews for almost 10 years.

We are putting our diplomatic relations with China in serious jeopardy because the ZTE investigation is being linked with the JMSU. The Chinese government is now protesting the way we [Philippine government] handle the matter,” said the senior official of the Department of Foreign Affairs (DFA), who spoke on condition of anonymity.

She believes that the US government, a major economic rival of China, is fueling the opposition to the JMSU.
This came as the Heritage Foundation, a conservative think tank in Washington DC with close ties to key Republican leaders said the seismic study to be conducted by China in the Philippine continental shelf will eventually threaten Filipino sovereignty. HF said a striking thing about the seismic study is that it will include not only disputed areas of the South China Sea, but also parts of the Philippine continental shelf. The obvious danger is that such cooperation, far from the China mainland but close to the Philippines, will eventually threaten Filipino sovereignty.”

The DFA source said The US has been wanting to be involved in the oil exploration in the South China sea but the Philippines has already agreed to undertake this with China. Also, the US Embassy in Manila also expressed concern over the award of the NBN project with Chinas ZTE because a US telecommunications company lost in the bidding.
The eroding trust in the Arroyo administration is compounding the problem, she said. The problem is, the Arroyo administration has lost its credibility to govern and anything it does now is being viewed with distrust.”

Another DFA official privy to the negotiations on JMSU, meanwhile, said the agreement with China and Vietnam was separately negotiated from the economic agreements with China, which include Northrail and the NBN project with ZTE.
The official explained the JMSU was internally discussed by an interagency team that includes officials from the DFA, National Security Council, Department of Energy and the Department of Justice. It was the Philippine National Oil Co. (PNOC) that negotiated the JMSU as a commercial agreement with its Chinese and Vietnamese counterparts.
Although the JMSU is a commercial agreement by nature, the PNOC was provided with policy guidance by the interagency team that includes the DFA, because the seismic activity would have implications on the respective claims to the Spratly Islands by the Philippines, China and Vietnam,” the official said.

The JMSU was signed by the Philippines, China and Vietnam in September 2005 as part of the confidence-building measures of claimant countries to the Spratly Islands, she said.

The diplomat recalled that the interagency team conducted strings of meetings at the DFA to discuss the JMSU, because not only were we going to break new ground in regional diplomacy but we also had to make sure it was above board.
She said the JMSU is guided by the Constitution and the Declaration of Conduct on the South China Sea, a Philippine-initiated agreement signed by China, and the members of the Association of Southeast Asian Nations on November 2, 2002.

By Jose Katigbak
WASHINGTON The massive scandal involving Chinese telecommunications company ZTE Corp. has the potential to become a major constitutional crisis in the Philippines, and Washington must make crystal clear its support of constitutional order in that Southeast Asian country, an article in a US think tank said.

The article posted on the Heritage Foundation website over the weekend said the ZTE contract to provide the Philippine government with a national broadband network at an obviously inflated price of $329 million pointed to a shameless level of corruption.

But as big as the scandal is in dollar terms, the most spectacular charge to emerge from the controversy is that the contract flows from a 2004 China-Philippines deal to put aside sovereignty claims in the South China Sea in order to conduct a joint seismic study, said the article by Walter Lohman.

Lohman is director of the Asian Studies Center at the Heritage Foundation, a conservative think tank with close ties to key Republican leaders in the US Congress.

Lohman said a striking thing about the seismic study is that it will include not only disputed areas of the South China Sea, but also parts of the Philippine continental shelf. The obvious danger is that such cooperation, far from the China mainland but close to the Philippines, will eventually threaten Filipino sovereignty, he added.

Indeed, such a concession is difficult to understand strictly from an assessment of the Philippines national interest, Lohman said.
The ZTE deal is only one element to emerge from $2 billion per year in Chinese project loans offered soon after the deal on the seismic study, his article said.

The loan program extends until 2010, President Arroyos last year in office, and has already facilitated dozens of deals beyond the ZTE broadband project.

Another massive deal that has aroused suspicion is the 25-year concession to the Philippines power grid. The biggest privatization in Philippine history, the $4-billion deal has a similar confluence of factors: Chinese involvement, high-value assets, and charges of connections to the Filipino first family, the article said.

The economic costs of corruption are well documented. What is alarming about these cases is the possibility that corruption in the Philippines may have reached the point of trumping national interest.”

If the Filipino people, as represented by their representatives and Senators, determine that the President is guilty of impeachable offenses, the Constitution of the Philippines has mechanisms for dispatching her.

If opponents judge the process too corrupt to render an accurate judgment, the answer does not lie in appeal to extra-constitutional means, but in a concerted effort to fix the system, however difficult and lengthy that may be, the article said.

From the perspective of a concerned friend, it would be far more preferable for the president to finish her term in office, even if under a cloud of suspicion, than for the Constitution to be breached,” it said.

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