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JPEPA reduces RP into an insurance firm for Japanese investors

GMA News | 08/23/2007

PCIJ: JPEPA reduces RP into an insurance firm for Japanese investors


When the full text of the Japan-Philippines Economic Partnership Agreement (JPEPA) was finally made public in October last year, it confirmed fears, particularly of environmentalists, that the bilateral trade pact involved the entry of Japan’s hazardous and toxic wastes at zero-percent tariff.

The revelation generated much public uproar that it prompted the Japanese government to issue a supplemental protocol binding it not to allow the export of toxic wastes to the Philippines and to respect the country’s laws on environmental protection and international commitments as the Basel Convention.

The Philippine government, on the other hand, has committed to review the concerned provisions of the trade agreement signed last year by Gloria Macapagal-Arroyo and then Japanese Prime Minister Junichiro Koizumi in Helsinki.

But Arroyo continues to push for its ratification, even certifying it as a priority legislation.

Besides the environmental issues, however, the JPEPA is said to harbor other “highly anomalous" arrangements, one of which is reducing the government to an insurance company for Japanese investors, as former University of the Philippines law dean Merlin Magallona points out.

Magallona, an acknowledged expert on international law, says that under Article 96, the Philippine government is liable for loss or damage to Japanese investments due to armed conflict or state of emergency such as revolution, insurrection, civil disturbance, or any other similar event in the country.

And that any payment made by the Japanese government to their investors is “effectively realizable, freely convertible and freely transferable" to the government of the Philippines.

Dubbed as a “mega-treaty" for incorporating free trade, bilateral investments, and economic cooperation agreements, the 934-page JPEPA is yet to be ratified by the Philippine Senate, having come under heavy criticism for provisions that are prejudicial to the Philippine government.

“We have effectively bargained away our national patrimony under the JPEPA," says Tanya Lat, lead counsel for the Magkaisa Junk JPEPA Coalition, a multisectoral organization that seeks to bar the ratification of the treaty.

Lat says JPEPA obligates the Philippines to accord national treatment to Japanese investors in practically all aspects of their investments in the country, a situation that goes against the constitutional mandate on the preferential use of Philippine products and labor.

JPEPA’s definition of “area" covered by the treaty is also a cause for alarm, says Magallona. He points out that under Article 2 of the treaty, what is covered as the “Philippine Area" is its “national territory" as defined under Article 1 of the 1987 Constitution. This includes the “exclusive economic zone and the continental shelf to which the Philippines exercises sovereign rights and jurisdictions."

The Philippine government also failed to make reservations for future legislations, says Lat. This means that the Philippines is waiving its right to enforce such laws in the future. Under existing legislations, meanwhile, the reservations made by the Philippine government are limitations imposed by the Constitution, without mentioning limitations set down by other laws.

This is an unfair situation because Japan has made extensive reservations protecting its own legislative space.

“JPEPA is one of the most atrocious treaties I’ve ever seen," says Magallona. He raises the following points:
 Through the provisions of the JPEPA, it can be gleaned that the executive branch exercised non-delegated powers, specifically powers that belong to the legislative branch. Some provisions are a “blatant usurpation of Congressional power."
 The president cannot enter into any agreement in connection with powers of co-equal bodies under the Constitution. The JPEPA restricts the plenary legislative powers of taxation.

The Senate is set to schedule the hearings for the treaty’s ratification process even as it awaits its transmittal by the executive department. Senator Miriam Defensor Santiago, chair of the foreign affairs committee, has earlier said that it will require at least four to five hearings before the issues could be threshed out because of the treaty’s far-reaching implications.

— Philippine Center for Investigative Journalism

 source: GMA News