JPEPA Faces Tough Constitutional Issues as Senate Vote Nears

Ratifying the JPEPA at its present unconstitutional form creates the risk that the Philippines will be subjected to legal disputes in international courts and face liability for damages. Under the Vienna Convention on the Law of Treaties, for instance, the Philippines could not invoke unconstitutionality as legal defense for non-performance of its JPEPA obligations.

BY ARNOLD PADILLA
Contributed to Bulatlat
Vol. VIII, No. 9, April 6-12, 2008

The Japan-Philippines Economic Partnership Agreement (JPEPA) is on top of the agenda of the Philippine Senate when it resumes from its Holy Week break on April 28. Senator Miriam Santiago, chair of the Senate committee on foreign relations, said she will release a full report endorsing “conditional concurrence” with the treaty.

Originally, the upper chamber was supposed to ratify the JPEPA before the Lenten break. But the Senate schedule on the treaty has been derailed by hearings on the alleged $329-million broadband corruption scandal. Since February, senators have been preoccupied with the inquiry on the anomalous broadband contract that caused renewed calls for Pres. Gloria Arroyo’s resignation or ouster.

Nonetheless, Filipino trade officials have been quietly but aggressively promoting the JPEPA through the media. The Japanese embassy has also become more insistent in its lobbying efforts for JPEPA’s ratification. But as the Senate vote on the treaty draws near, many fundamental issues remain unresolved. In fact, the proposed conditional concurrence of Santiago underscores the failure of the JPEPA to pass crucial constitutional issues.

If ratified, the JPEPA sets a dangerous precedent wherein treaties could be approved in spite of clear constitutional flaws. Worse, the impending JPEPA ratification ignores the legitimate concerns brought up by fishers, workers, nurses, environmentalists, nationalists, and other cause-oriented groups. Beyond the constitutionality of the JPEPA, the bigger issues involve the treaty’s lasting impact on the livelihood of marginalized groups and the country’s economic sovereignty.

National treatment

Retired Supreme Court (SC) Justice Florentino Feliciano raised several constitutional questions in one of the Senate’s hearings on the JPEPA last year. He pointed out that the JPEPA’s provisions granting national treatment to Japanese investors and prohibiting performance requirements violate the 1987 Constitution.

National treatment, which is contained in Article 89, means that Japanese investors and their investments will be treated like their Filipino counterparts. But this provision contradicts the ownership limits set by the Constitution. “It is common knowledge that entry into certain sectors of economic activity in our country is constitutionally restricted to Filipinos or to juridical persons at least 60 percent owned by Filipinos”, Feliciano said.

Government negotiators actually had the chance to hurdle such legal challenge. Article 94 of the treaty gives the Philippines an option to list all constitutional and legal provisions that do not conform to Article 89. But while the negotiators did exercise this option, they failed to provide a full account of such provisions. “The most dramatic example of omission”, observed Feliciano “is relating to the operation of public utilities”.

Article XII Section 11 of the Constitution requires a minimum of 60 percent Filipino ownership in public utilities. “If the JPEPA comes into effect, Japanese investors would be entitled to own more than 40 percent of a public utility. This would be a direct contravention of our Constitution”, Feliciano maintained.

There are other similar constitutional restrictions that were not listed by the negotiators in Article 94. These include limits relating to the practice of certain professions; ownership and administration of educational institutions; mass media; and advertising.

Performance requirements and future measures

Article 93, meanwhile, limits the authority of government to impose certain requirements on Japanese investments in the country. Government could not oblige Japanese investors to transfer technology, use a particular amount of local inputs in their production, and to hire Filipinos in certain positions, among others.

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