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Resolve whether or not Malampaya Natural Gas project is within Palawan

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BACKGROUND AND FACTS OF THE CASE:  - The discovery of natural gas and oil offshore of the Province of Palawan, and converting this natural gas to electricity, gives the country a big boost in its energy supply with 2,700 megawatts added to the Luzon power grid, stabilizing the supply of electricity and ending the rampant brown outs in Luzon.


Unfortunately, this blessing of natural wealth has been denied the Palawenos because former President Gloria Arroyo saw fit to interpret the law to deprive Palawan a share in this bounty to suit her political agenda in using the proceeds from the Malampaya Gas Project.  Her hidden agenda became very obvious as evidenced by the improper use of Malampaya funds and the anomalies and corruption resulting therefrom, as found by the Commission on Audit in its special audit report on projects funded by Malampaya royalties.


Palawan’s stake in Malampaya royalties has basis in law: 


<!--[if !supportLists]-->1.      <!--[endif]-->Section 290 of R.A. 7160 (Local Government Code) is very clear, “Sec. 290. Amount of Share of Local Government Units. - Local government units shall, in addition to the internal revenue allotment, have a share of forty percent (40%) of the gross collection derived by the national government from the preceding fiscal year from mining taxes, royalties, forestry and fishery charges, and such other taxes, fees, or charges, including related surcharges, interests, or fines, and from its share in any co-production, joint venture or production sharing agreement in the utilization and development of the national wealth within their territorial jurisdiction.” (underscoring and italics supplied);


<!--[if !supportLists]-->2.      <!--[endif]-->The same principle is found in the Constitution, “Article X, Section 7. Local governments shall be entitled to an equitable share in the proceeds of the utilization and development of the national wealth within their respective areas, in the manner provided by law, including sharing the same with the inhabitants by way of direct benefits.”


<!--[if !supportLists]-->3.      <!--[endif]-->These provisions are further strengthened by Sec. 5 of R.A. 7160, “Rules of Interpretation. - In the interpretation of the provisions of this Code, the following rules shall apply:


<!--[if !supportLists]-->(a)   <!--[endif]-->Any provision on a power of a local government unit shall be liberally interpreted in its favor, and in case of doubt, any question thereon shall be resolved in favor of devolution of powers and of the lower local government unit. Any fair and reasonable doubt as to the existence of the power shall be interpreted in favor of the local government unit concerned; …and…

<!--[if !supportLists]-->(b)   <!--[endif]-->The general welfare provisions in this Code shall be liberally interpreted to give more powers to local government units in accelerating economic development and upgrading the quality of life for the people in the community;”

<!--[if !supportLists]-->4.      <!--[endif]-->Also, the principles of the United Nations Convention on the Law of the Sea (UNCLOS) in its definition of “archipelagic waters” and “continental shelf,” and the fact that the Municipality of Kalayaan is a part of Palawan Province, reinforce the proposition of Palawan that the Malampaya Natural Gas project is within its territorial jurisdiction. 


<!--[if !supportLists]-->(a)   <!--[endif]-->UNCLOS definition of “Archipelagic Waters” also defines how the State can draw its territorial borders. “A baseline is drawn between the outermost points of the outermost islands, subject to these points being sufficiently close to one another. All waters inside this baseline are designated Archipelagic Waters. The State has full sovereignty over these waters, but foreign vessels have right of innocent passage through archipelagic. (i.e., substituting “state” with “province”, this adopted definition of the UNCLOS on archipelagic waters places the Malampaya Natural Gas Project within Palawan territory).

<!--[if !supportLists]-->(b)   <!--[endif]--> UNCLOS definition of “Continental Shelf” is definitively echoed by the National Committee on Geological Sciences (NCGS – is the primary body in the Philippines to oversee the geological concerns of the country); in the “MEMO of AGREEMENT with the City Government of Puerto Princesa in its effort to declare the St Paul Limestone as a National Geological Monument, quote, “Whereas, the St. Paul Limestone Formation geologically correlates with and has the same age as the limestone reservoir rock of the petroleum deposits in Malampaya/Camago in the middle of the three grabens in the northwestern area of the continental shelf of the micro continent of Palawan.”


President Arroyo had earlier pronounced during visits to Palawan in 2002 and 2003 that “Palawan is fortunate because it is endowed with natural wealth”, referring to the share of the province in the Malampaya Gas project’s royalties.  She, however, later recanted and adopted the opinion of the Dept of Finance that Malampaya is not within the territorial jurisdiction of Palawan, contrary to the opinion of Chief, Presidential Legal Adviser Avelino Cruz, who opined otherwise and sustained that Malampaya is within the territorial jurisdiction of Palawan.


In his opinion, Secretary Cruz stated that the DOF’s sole basis in seeking to deny Palawan’s share in the Malampaya project is that the territory of Palawan is limited to its land area.  It failed to cite material and relevant laws and other issuances directly dealing with the Province of Palawan specifically, its component LGU’s and its territory.  The DOF would have been correct if Palawan were a province still to be created by Congress.  Palawan, however, is a province that has preceded even the existence of the Republic of the Philippines.  Many laws have already been passed dealing with jurisdiction, territory and area of Palawan.


Secretary Cruz cited several laws, presidential decrees and presidential issuances, strengthening the stand that Malampaya is within the territorial jurisdiction of Palawan.  Salient points follow:


<!--[if !supportLists]-->a.      <!--[endif]-->Section 465(3)(v) of the Local Government Code empowers the governor to adopt adequate measures to safeguard and conserve marine resources of the province, in coordination with the mayors of component cities and municipalities.  This presupposes that coastal provinces have marine areas, and directly contradicts the theory that the area of a province is limited to its land mass;


<!--[if !supportLists]-->b.      <!--[endif]-->Republic Act No. 7611 dated June 6, 1992, an act adopting the strategic environment plan (SEP) for Palawan, defines the territory of Palawan to include not only the land mass of Palawan but also the islands and islets comprising the province, and the surrounding sea;


<!--[if !supportLists]-->c.       <!--[endif]-->Presidential Decree No. 1596 dated June 11, 1978 establishing the Municipality of Kalayaan declared that the area including the sea-bed is part of the Province of Palawan (the Malampaya Gas to Power project is situated between Pagasa Island, seat of the Kalayaan municipality, and mainland Palawan);


<!--[if !supportLists]-->d.      <!--[endif]-->Presidential Decree No. 1599 dated June 11, 1978 establishing the Exclusive Economic Zone (EEZ) does not provide that the EEZ is part of national territory and is excluded from provincial territory;


<!--[if !supportLists]-->e.      <!--[endif]-->Proclamation No. 1801 dated November 11, 1978 declaring certain areas, including Malampaya Sound and Islands in Palawan, as tourist zones and marine reserves;

<!--[if !supportLists]-->f.        <!--[endif]-->Presidential executive issuances recognizing Malampaya as constituting part of Palawan, such as:


<!--[if !supportLists]-->·         <!--[endif]-->Administrative Order 381 issued by then President Fidel V. Ramos declaring the Camago-Malampaya Reservoir as being located offshore Northwest Palawan, and  acknowledging the share of Palawan in the amount of US$2.1 Billion over a 20 year revenue stream from the Camago-Malampaya Gas Project commencing on the year 2002;

<!--[if !supportLists]-->·         <!--[endif]-->Proclamation No. 342 dated July 12, 2000 declaring Malampaya Sound, consisting of parcels of land and marine waters situated in the Municipalities of Taytay and San Vicente, Province of Palawan as a protected area;

<!--[if !supportLists]-->·         <!--[endif]-->Proclamation No. 306 dated August 11, 1988 declaring Tubbataha and surrounding waters of the public domain in Central Sulu Sea, Province of Palawan, as Tubbataha Reef National Marine Park.

<!--[if !supportLists]-->g.      <!--[endif]-->Aside from these laws and issuances, certain acts of the government support this view. First, Palawan has been receiving a national wealth share from oil exploration in the area (this is distinct from the natural gas share).  Second, the DOE, DOF, NPC, SHELL-OXY have contractually recognized Palawan’s share in the proceeds of the Camago-Malampaya Natural Gas Project.


Secretary Cruz, summarized his findings as follows: “Based on the foregoing, there is sufficient legal basis to state that the Province of Palawan is entitled to a national wealth share in the proceeds of the Camago-Malampaya Natural Gas Project.

In spite of the opinion of her Chief, Presidential Legal Adviser and the precedents established by her two predecessors, President Arroyo recanted her own pronouncements, reversed the actions of Presidents Corazon Aquino and Fidel Ramos, and adopted the opinion of her DOF Secretary, to satisfy her political ambition through the control of Malampaya funds.


This declaration of GMA that Malampaya is not in Palawan deprived over a million Palawenos of what legally and morally belongs to them; it has parallelism with the action of Hitler when he decreed the death of millions of Jews.


Why did GMA make such a declaration?  We can only surmise that Malampaya funds are the biggest source of the “pork barrel” of the President!  No wonder GMA had such an interest.  (Calling on the Senators and Congressmen to look into how the Malampaya funds were used during the term of GMA…!!!)


This controversy forced the previous political leaders of Palawan to file a case against the National Government, and the Regional Trial Court ruled in favor of Palawan.  This, however, was elevated to the Supreme Court, and to the present date is still pending resolution.


In the meantime, GMA and the previous political leaders of Palawan, led by Governor Joel T. Reyes, entered into an interim agreement for financial assistance to Palawan.  Thus, Palawan received financial assistance amounting to only P3.9 Billion, instead of the P96 Billion accumulated share of Palawan from 2001 to 2011.


Sadly, this financial assistance of P3.9 Billion was riddled with anomalies as evidenced by the COA audit report.  In November 2012, COA issued notices of disallowances in 42 projects amounting to P625 Million, requiring Governor Joel Reyes and some provincial department heads and the contractors involved to refund more than P520 Million, or 76% of the project costs. The difference of P3 Billion already spent but not yet audited by COA also shows evidence of corruption and anomalies.


Because of this interim agreement, the Civil Society of Palawan led by Bishop Pedro D. Arigo and the Kilusan Love Malampaya (KLM) filed a case, alleging that the interim agreement between the National Government and the Provincial Government of Palawan was illegal.


Meanwhile, it is ironic that the energy situation in Palawan is characterized by frequent brownouts, high consumer rates, and a limited area of coverage augmented by overpriced and inadequate solar home systems provided by the Provincial Government to rural communities.


Today, with a new set of provincial political leaders oriented towards tangible development of the province, the people of Palawan find hope for a better future, and this Petitioner finds the courage and initiative to petition the Supreme Court, through, for the immediate resolution of the pending case in favor of the Province of Palawan.


I call on all Filipinos to join me in petitioning our Supreme Court to act judiciously in favor of the Province of Palawan.  This issue of provincial jurisdiction not only affects the province of Palawan, but also 66 other coastal and island provinces out of the 80 provinces of the Philippines.


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188 Palanca St-Wescom Rd.

San Miguel, Puerto Princesa City


Province of Palawan, Philippines

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