What Has the Philippines Recently Offered for Negotiations in Trade in Services with the EU?

CURRENT TRADE CONCERNS
Elpidio V. Peria
15 March 2017

from : http://www.ustr.gov

We have recently come across a document which somehow points to Philippine offers in its start of negotiations with the European Union on the proposed EU-Philippines Free Trade Agreement and among the trade sectors that will be negotiated by the two trading partners (PH and EU) is the sector on services.

What does trade in services mean and how is it important to the growth and development of the two economies (EU and Philippines)?

According to UNCTAD, the United Nations body that keeps track of global trends in trade and development, the services sector plays an increasingly important role in the global economy and the growth and development of countries and it cited as an example the 2011 World Development Indicators which show that the services sector accounted for almost 71% of global GDP in 2010 and is expanding at a quicker rate than the agriculture and the manufacturing sectors. Moreover, trade in services is growing at a pace faster than trade in goods since the 1980s and in 2011, commercial services exports grew 11% to US$ 4.1 trillion.

Explaining further, the UNCTAD also described International trade in services which includes tradeables that are intangibles (or trade in intangibles), unlike goods, such as peoples’ skills . Services trade is carried out through four modes of supply namely cross-border supply, consumption abroad, commercial presence and presence of a natural person. International trade in services through these modes does not physically cross national border and thus is not affected by customs tariffs and other taxes applied to merchandise trade.

Before we tackle the question of what sort of rules on trade in services the Philippines will put forward in its negotiations with the EU, let us first ask what the Philippines will put into play in the negotiations that will later on be covered by these rules.

From the text that we have seen, the Philippines has proposed to include “measures by Parties affecting trade in services and taken by central, regional or local governments and authorities as well as by non-governmental bodies in the exercise of powers delegated by central, regional or local governments or authorities . It shall apply to all services sectors except services supplied in the exercise of governmental authority .”

This sentence can be broken down into two key components, namely:

a) Measures by Parties affecting trade in services and taken by central, regional or local governments and authorities as well as by non-governmental bodies in the exercise of powers delegated by central, regional or local governments or authorities and

b) All services sectors except services supplied in the exercise of governmental authority.

This measure in (a), as per the WTO GATS Training Manual indicates, can be “in the form of a law, regulation, rule, procedure, decision, administrative action, or any other form, … in respect of:

– the purchase, payment or use of a service;
– the access to and use of, in connection with the supply of a service, services
which are required by those Members to be offered to the public generally;
– the presence, including commercial presence, of persons of a Member for the
supply of a service in the territory of another Member”.

The second component in (b), does not include “services supplied in the exercise of governmental authority” and this is in turn defined in art. 1, para. 3 (c) of GATS as any service which is supplied neither on a commercial basis, nor in competition with one or more service suppliers.

These two components (a) and (b) as described above are actually included in the scope and definition of the WTO General Agreement on Trade in Services, so there is no problem having that kind of formulation being offered to the EU.

While these concepts may give an idea of what may be included in the negotiations, one will now have to look at what the Philippines tried to exclude, meaning, not part of the free trade negotiations with the EU, which are the following :

a. in respect of air transport services, measures affecting air traffic rights, however granted; or to measures affecting services directly related to the exercise of air traffic rights, other than measures affecting:

(i) aircraft repair and maintenance services;
(ii) the selling and marketing of air transport services; and
(iii) computer reservation system services;

b. subsidies provided by a Party or a state enterprise thereof, including grants, government-supported loans, guarantees and insurance;

c. cabotage in maritime transport services;

d. measures pursuant to immigration laws and regulations; and

e. measures affecting natural persons seeking access to the employment market of a Party, or measures regarding nationality or citizenship, or residency or employment market of a Party, or measures regarding nationality or citizenship, or residency or employment on a permanent basis .

What this means is that what are not included in the exclusion list are now part of the offers being made by the Philippines to EU, which in turn, as based in a UNESCO briefing material are the following 12 GATS service sectors, namely Business; Communication; Construction and Engineering; Distribution; Education; Environment; Financial; Health; Tourism and Travel; Recreation, Cultural, and Sporting; Transport; “Other”, which may mean any kind of service that does not yet have any concrete categorization.

Given that the textual offers of the Philippines tracks what is already in the GATS, these then are the possible sectors that may be subjected to negotiations with the EU in the coming months.

Government should be able to thoroughly discuss with the public the nitty-gritty aspects of these negotiations so that the affected services sectors, which are fairly broad, may be able to comment and make their concerns known to the negotiators of the Philippine government with the EU.

The civil society groups monitoring the negotiations should also be able to track closely the negotiations so that it can offer timely comment and suggestions which hopefully should improve the Philippine offers and make for a better deal.

This last part of our comment on improving the Philippine offers is surely wishful thinking on our part as it is contingent on the Philippine negotiators listening in and taking into consideration in their positions, these civil society comments. This will also require that government and civil society including the professional sectors will work together. Let’s see if that is what will happen in the coming weeks.

OoO

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International Rice Research Institute Patents an Indonesian Rice Variety

CURRENT INNOVATION CONCERNS
Elpidio V. Peria
12 March 2017

from : http://global-inst.com

Edward Hammond of the Third World Network recently reported (TWN Information Service on Sustainable Agriculture, Biodiversity/TK and Intellectual Property, March 10, 2017) that the well-known International Rice Research Institute (IRRI) in Los Baños, Philippines is seeking patents on a valuable yield-boosting gene identified in a farmers’ variety (“landrace”) of rice from Indonesia held in the Institute’s international gene bank.

Patents are a form of intellectual property right, usually given to inventions that are new, possessed of an inventive step and are capable of being industrially applicable and while this development (of international gene banks seeking patents on the crops under their custody ) is not really that new, for a supposedly philanthropy money-supported international organization (Ford Foundation and Rockefeller Foundation) like the IRRI to now seek to monetize the assets in its gene banks appears to be a pattern of behavior that will continue for the foreseeable future, the only question now is whether IRRI will follow certain international rules when they do these things.

One basic rule that the IRRI needs to clarify here is whether they have notified the Indonesian Government of their plan since the Third World Network report shows that the yield-boosting rice gene called SPIKE that the IRRI is now trying to patent is from an Indonesian farmers’ variety of rice named “Daringan”.

According to the Third World Network report, Daringan (IRGC-17446) is held by IRRI in trust for the world’s farmers and is part of the Multilateral System (MLS) of the International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA).

While the said Multilateral System (MLS) prohibits the patenting of the seeds that are part of the system in the form that they are received, researchers may apply for patents on other characteristics that they may find in the seed that they have taken out from the MLS.

What bears watching here henceforth is the action of the Indonesian Government in this situation, if they get to know of this action by IRRI and they will then take steps to get more information from IRRI on its action and act accordingly.

oOo

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Finding Out the Location of Some Medicinal Plants in the Philippines

CURRENT BIODIVERSITY CONCERNS
Elpidio V. Peria
8 March 2017

Akapulko, from http://www.philippineherbalmedicine.org/akapulko.htm

For those who may be curious on the subject, it should not be difficult to find where medicinal plants are found in the Philippines as they appear to be everywhere all over the country. The first step is to know how many medicinal plants are there in the country and from there it can be figured out where they may be found based on other information.

As a start, we may look at an overview paper by Eusebio and Umali in 2004, where they said that in the Philippines, there is an estimated over 1500 plant species that have known medicinal value. In a survey conducted by UPLB in 766 barangays or villages in 12 regions of the country, 1687 plants (based on common names) were found being used by local traditional healers or arbularyos. Of this number, only 120 medicinal plants have been scientifically validated for safety and efficacy. This may be a good starting point for drawing up a list where these plants may be found, with the aid of other studies and tools.

There is also the ten medicinal plants endorsed by the Department of Health because they have been scientifically validated by Philippine researchers and if we look at them one by one, from . Akapulko (Cassia alata), Ampalaya (Momordica charantia), Bawang (Allium sativum), Bayabas (Psidium guajava), Lagundi (Vitex negundo), Niyog-niyogan (Quisqualis indica L.), Sambong (Blumea balsamifera), Tsaang Gubat (Ehretia microphylla Lam.), Ulasimang Bato | Pansit-Pansitan (Peperomia pellucida) and Yerba Buena (Clinopodium douglasii), it appears that they are so common as to be most likely available all over the country.

One of these studies that will aid the search for the location of these plants is the use of the local names where these plants may be found. Dr. Domingo A. Madulid, a well-known ethnobotanist, wrote in 2005 about the uses of vernacular plant names, among which is its use in tracing the origin and history of place names, among other uses. The local names, notwithstanding its limitations, is a useful information source for the possible location of a medicinal plant, though if one wants to establish if such plant originated in such a location, it will take a different kind of research to achieve that goal

Still another way of finding out where these medicinal plants may be found is through a focused study of identified areas in the Philippines which are known to be the location of identified indigenous communities. One of these studies was done by Balangcod and Balangcod in 2011, where they looked at the practices of one indigenous society in Ifugao, the Kalanguya, who have a long tradition of using medicinal plants. In this study, they described the ethnomedicinal importance of 125 plant species and healthcare practices done by their Ifugao informers with ages ranging from 16-90 years.

There will be a lot more ways to find out the location of these plants and back in various workshops that we have attended on the topic of biopiracy in over two decades of engagement on this issue, indigenous peoples and the support organizations working with them do not generally welcome these kinds of efforts to systematically search the location of where these plants are found as they are usually seen to facilitate or make easy the biopiracy of their resources.

What will the harried government or even private researcher do in this kind of situation? Perhaps it is best that the free and prior informed consent of communities be secured first before inquiries are made where these resources may be found, though disclosure of a location will not immediately mean that there is already consent to get the plant, that should be clear to the researcher who may wish to undertake an ethical way of doing these things. In case no consent is given, that should be the end of the inquiry, perhaps the researcher may just want to move on to the next subject item in his or her study.

Another way that can be done about this is for government to fund a specific effort to put together all these ethno-botanic studies or databases of various agencies of government and make these studies or databases cross-linked or cross-referenced with each other. In such a situation, a researcher need not have to move from one database to another to gather the information necessary for any research related to medicinal plants.

OoO

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Find Out What This 100-year old Philippine Law Journal Article Said With a Twist on the Death Penalty

CURRENT SOCIETAL CONCERNS
Elpidio V. Peria
5 March 2017

death-penalty-horizontal

from : http://www.themediaproject.org

As the return of the death penalty has been hugging the news lately, we looked for some write-ups looks at the issue even-handedly and we found one in an almost a hundred year old law journal article, in the Philippine Law Journal, a student-led law journal of the University of the Philippines College of Law and there in its December 1917 issue (On the Abolition of the Death Penalty, Vol. IV, No. 5, pp 169-175), penned by an Associate Professor, M.H. De Joya, is a prescient and still relevant discussion of the pros and cons of the death penalty , with a surprising twist in the end, he said the prisoner carry out the penalty himself!

De Joya divided the camps debating the death penalty into three :

– the first group he called the conservatives, who sought for the preservation and effective use of the death penalty, found their justification for the death penalty not only on the grounds of Nature and History, but also on the ground of deterrence and the consequent decrease and diminution of criminality and the so-called artificial selection eliminating the desirable and the unfit to secure the improvement of the individual and society, considering the penalty imposed as a retribution for the proper defense of society;

– the second group he called the radicals, deny the defensive efficiency of the death penalty as a deterrence, and allege that by making public executions more or less dramatic, they tend to increase criminality by force of example and imitation, converting the criminal into a sort of a hero among the uneducated classes; and that, at most it has no effect on the increase or decrease of criminality and its suppression; and that it is inhuman and revolting and might cause irreparable loss in case of mistake or a miscarriage of justice, citing furthermore the reluctance of courts and juries in imposing the death penalty, often-times acquitting the defendant rather than take the responsibility for his death, and invoking likewise the ever-growing regard for human life and personality.

– the third group he called as holding the middle ground, who argue that it should be applied only in extreme cases- in meritorious cases- preserving it as a sword of Damocles, and a warning to everybody as a punishment that might be possibly be inflicted at any time.

The author then proceeded to examine the validity of the arguments of all three camps but he came to the conclusion that the justice and necessity of capital punishment is justified by Nature and History, including the improvement and defense of the individual and of the race, that it deters criminals and tends to reduce criminality. Responding to the abolitionists’s objections, he suggested that executions should not be made publicly or in the view of the multitude and that other means should be employed such as electrocution or the use of poison and that the prisoner should be permitted to choose the manner in which he shall die, provided the one selected by him is one of the two (electrocution or poison) and that his death, if possible, should be brought about by himself. Then there would be no necessity for the executioner, and prison officials would be relieved of their most revolting and undesirable duty.

Save for the surprising way in which the author tried to relieve the undesirable aspects of the death penalty, the suggestion that the accused himself carry out the penalty may most likely now run afoul of our 1987 Constitution which provides in sec. 19 (1), Article III on the Bill of Rights that no “cruel, degrading or inhuman punishment” be inflicted.

That same article of the Constitution actually already abolished the death penalty but provided a qualifier that, for compelling reasons involving heinous crimes, the Congress may hereafter provide for it.

Now, with the emerging picture on the reimposition of the death penalty focusing on drug-related heinous crimes, based on de Joya’s almost-100 years old write-up, the House of Representatives who supported the bill on the reimposition of the death penalty have taken the side of the 3rd group, that we wanted this death penalty as a sword of Damocles, to warn potential offenders of the harsh consequences of their activities.

Would this rationale for the restoration of the death penalty for drug-related heinous crimes truly serve as an effective warning and possible deterrent given our current realities where the much-vaunted Oplan Tokhang was suspended because the police, as shown in the case of the Korean businessman who was also subjected to extortion, were involved in turning the well-meaning program into a mechanism for the preservation and perpetuation of its corrupt practices?

If there’s an unqualified answer to that question, then perhaps this bill should forthwith proceed, but if the answer to that will be couched in numerous conditions and justifications, then, maybe the focus of reform should be on the police and the penal institutions that we currently have. Whatever happened to that supposed updating of our old and creaking 1930 Revised Penal Code? If only Congress focused its attention to that….

oOo

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1 of 3 Things the Commission on Appointments May Do to DENR Sec. Gina Lopez Today

CURRENT POLITICAL CONCERNS
Elpidio V. Peria
1 March 2017

commission-on-appointments

From : http://www.globalnation.inquirer.net.

The Commission on Appointments, a Constitutionally-mandated body tasked to screen identified appointments by the President, can either not act on, suspend or reject DENR Secretary Gina Lopez’s appointment set to be heard by the Commission today.

Checking the Rules of the Commission on Appointments and Rules of the Standing Committees, from the website of the Commission itself, the actions described above are fully set out in secs. 17 (no action), 20 (suspension) and implied from sec. 23 in the said document if the votes against the Cabinet Secretary will outnumber those who are in favor.

In case the Commission will not act on the appointment, here is what will happen, from sec. 17 of the Rules :

SECTION 17. UNACTED NOMINATIONS OR APPOINTMENTS RETURNED TO THE PRESIDENT. Nominations or appointments submitted by the President of the Philippines which are not finally acted upon at the close of the session of Congress shall be returned to the President and, unless new nominations or appointments are made, shall not again be considered by the Commission.

In this situation, the appointment will be returned to the President, who may decide to nominate or re-appoint the Secretary anew.

Now, suppose the Commission decides to suspend consideration of the appointment, the rules in sec. 20 state :

SECTION 20. SUSPENSION OF CONSIDERATION OF NOMINATIONS OR APPOINTMENTS. Any member may move for the suspension of action by the Commission on any nomination or appointment favorably recommended by a standing committee and the Chairman shall suspend the consideration of said nomination or appointment: Provided, that, such suspension may be taken up on the next succeeding session of the Commission; Provided, further, that this section shall not apply to nominations or appointments taken up by the Commission during the last session prior to a sine die adjournment of Congress

What will happen in this situation is that the suspension will be taken up in the next succeeding session of the Commission. The second proviso dealing with the sine die adjournment of Congress refers to appointments that were taken up by the Commission before the end of one session, or an adjournment of a previous session of Congress.

For the curious, if we ask Richard S. Beth and Jessica Tollestrup, sine die adjournment means :

xxx.. “an adjournment that ends an annual session.” The literal meaning of “sine die” is “without day;” the implication is that the session is adjourning without having set any day for a subsequent meeting. When a chamber has established no date on which to return for any further meeting of the same annual session, the consequence is that it will not meet again until it assembles for its next annual session.

Accordingly, an adjournment sine die necessarily brings an annual session to an end, and when Congress reconvenes after an adjournment sine die, a new annual session begins; for instance, the sine die adjournment of Congress in December 2009 terminated the first session of the 111th Congress, and when Congress next assembled in January 2010, it thereby began the second session of the 111TH Congress. (author’s note : this refers to the US Congress, from which our own Congress borrows much of its procedures, practices and norms)

The third scenario, of rejection, is the end of DENR Secretary Gina Lopez, though this may take some time, as the Commission is now duty-bound to hear the testimonies of Mr. Rodolfo RJ Javellana, Mr. Manuel J. Galvez and Mr. Marion Karlo R. Cruz, et.al. as can be found in the notice of resetting of the supposed session of the Commission on Appointments last February 13, 2017. This could be a long drawn-out process considering that there could be many more witnesses that may be heard by the Commission.

Interestingly, the rules are not explicit about hearing testimonies FOR the nomination and only those who will OPPOSE the appointment are requirement to make their opposition under OATH, this is to make these oppositors liable to perjury (lying under oath) in case it may be proven that the oppositions talked about untruths and falsehoods. Ultimately, this will boil down to the Commission members if they wish to skip listening to the oppositors and decide as earlier or will give a chance to Sec. Gina Lopez to respond to those opposing her nomination.

Based on the list of the Standing Committee on Environment and Natural Resources to which Sec. Gina Lopez’s appointment is first referred, these are : Chairman – Sen. Emmanuel D. Pacquiao, Vice Chairman – Rep. Benhur L. Salimbangon and members, Rep. Joel Mayo Z. Almario, Sen. Paolo Benigno “Bam” Aquino IV, Sen. Alan Peter “Companero” S. Cayetano, Sen. Franklin M. Drilon, Sen. Joseph Victor G. Ejercito, Rep. Antonio R. Floirendo, Jr., Rep. Wes Gatchalian, Sen. Gregorio B. Honasan II, Sen. Panfilo M. Lacson, Sen. Loren Legarda, Rep. Rosenda Ann Ocampo, Sen. Francis “Kiko” Pangilinan, Rep. Josephine Y. Ramirez Sato and Sen. Juan Miguel F. Zubiri

Ex –officio members of the Committee are : Vice-Chairman Rep. Ronaldo B. Zamora; Majority Floor Leader Rep. Rodolfo T. Albano III, Asst. Majority Floor Leader Sen. Vicento C. Sotto III, Asst. Majority Floor Leader Rep. Abraham “Bambol” N. Tolentino, Minority Floor Leader Sen. Ralph G. Recto, Asst. Minority Floor Leader Rep. Julieta R. Cortuna and Asst. Minority Floor Leader Rep. Jerry P. Trenas. The Commission Chair is Senate President Koko Pimentel.

oOo

 

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The Debate on Which Court Has Jurisdiction Over Sen. de Lima’s Case

CURRENT POLITICAL CONCERNS
Elpidio V. Peria
26 February 2017

sandiganbayan

from : http://www.philstar.com

Should it be the Sandiganbayan or the Regional Trial Court? How this conundrum is resolved will depend on how the drug trafficking cases filed by the DOJ against Sen. Leila de Lima will be decided by the three branches of the Regional Trial Court in Muntinlupa. This, in turn, will depend on what criminal offense against Sen. De Lima will have probable cause, a legal standard which does not mean absolute certainty over what crime has been committed, but only the most likely crime she may be guilty of based on the evidence presented.

News reports indicate Sen. De Lima has already filed motions to quash (similar to a motion to dismiss in civil cases) on these cases asserting that it is the Sandiganbayan that has jurisdiction over her.

Examining closely the law creating the Sandiganbayan, a special court created in 1978 during the time of President Marcos tasked to handle exclusively cases against government officials, its most recent iteration in 2015, through Republic Act 10660, from the original Presidential Decree 1486, which got amended by Presidential Decree 1606, and later by Republic Act 8249 in 1997, lists down the cases on which it has exclusive original jurisdiction :

a. Violations of Republic Act No. 3019, as amended, otherwise known as the Anti-Graft and Corrupt Practices Act, Republic Act No. 1379, and Chapter II, Section 2, Title VII, Book II of the Revised Penal Code, where one or more of the accused are officials occupying the following positions in the government, whether in a permanent, acting or interim capacity, at the time of the commission of the offense

b. Other offenses or felonies whether simple or complexed with other crimes committed by the public officials and employees mentioned in subsection a. of this section in relation to their office.

c. Civil and criminal cases filed pursuant to and in connection with Executive Order Nos. 1, 2, 14 and 14-A, issued in 1986

We looked up what these Executive Orders in 1986 refer to and they deal with the ill-gotten wealth relating the Marcoses and their cronies.

Most likely, the lawyers of the lady Senator are arguing that what she should be tried on should be bribery, which is what is what is referred to in that seemingly innocuous Chapter II, Section 2, Title VII, Book II of the Revised Penal Code.

In filing these cases, the DOJ seemed to have adopted a more expansive strategy, filing 3 cases in 3 different salas or courts will make it difficult to have a uniform outcome that can be uniformly appealed, there will always the possibility of an outlier result that will not be favorable to her. Most likely, Sen. De Lima may have her way in one or two courts ruling in her favor but three, that is a tough, uphill climb.

Eventually, her lawyers may ask that these cases l be consolidated in one sala so that the diversity of outcomes will be avoided, it will be an interesting education in legal strategy how these cases will unfold.

The DOJ or the President’s legal team, maybe Atty. Panelo, can also open up another front in the Senate, where they may try to censure Sen de Lima for ethics violations or perhaps the House of Representatives, where an impeachment complaint may be initiated against her.

These moves however will depend on the outcome of the current court cases against her, so, to prevent us from further speculating, let us await what will happen in the regional trial court in Muntinlupa. Why Muntinlupa, of all places? It is the place where the National Bilibid Prison is located, and in criminal cases, where the crime is committed, in this case, bribery or drug trafficking, was alleged to have been committed, will be the venue or location of the court where the case will be handled.

What is guaranteed here, given our snail-paced justice system, and the various legal maneuvers that will be employed here that will reach up to the Supreme Court, is Sen. De Lima continued media exposure for the next, perhaps the entire six year term of President Duterte.

They may have jailed her for now, but, judging from the way Sen. De Lima waved to her supporters as she was being transported to her place of custody from the court, President Duterte may have only clarified in the public’s mind who will be up against Sen. Manny Pacquiao (given that President Duterte has been egging on the neophyte Senator to run) in 2022.

oOo

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Were the Miners in the Philippines Given Fair and Equitable Treatment by DENR Sec. Gina Lopez ?

CURRENT INVESTMENT CONCERNS
Elpidio V. Peria
22 February 2017

secgina

from : http://philnews.ph

The mining companies in the Philippines whose operations were closed by DENR Secretary Gina Lopez recently should now be content that their due process rights are being taken cared of by the Office of the President. While they may be hoping that the President may reverse the decision of the DENR Secretary, there was one distraught-looking lawyer of a mining company on TV we saw last week who vowed they will sue the Philippine government for affecting their investments in the country.

When we heard this, our first reaction was, this fellow is not bluffing – he appeared to be determined in doing it and most likely he is already researching the legal arguments that he will use that will go beyond the due process argument they are saying were violated by Sec. Gina Lopez. With the Office of the President already reviewing the DENR Secretary’s decision, the due process argument is passé, or to put it in legal terms, that point is moot and ineffective.

When that lawyer talked about laws protecting investments in the country , the immediate legal principle that will be put in play in this soon-to-be suit that will most likely be filed, among other legal arguments, but for this post we will only focus on this, is the fair and equitable treatment or FET principle.

According to Prof. Moshe Hirsch of the Hebrew University of Jerusalem writing in the Journal of World Investment and Trade (Research Paper No. 07-13, June 2013), the FET clause has existed as a ‘sleeping beauty’ in bilateral treaties since the end of World War II but it is only since 2000 that investment tribunals have applied it to a broad range of circumstances. Currently, this principle is included (though in diverse contexts and different wordings) in the great majority of bilateral investment treaties (BITs) as well as in major multilateral investment treaties (such as the NAFTA and the Energy Charter Treaty) and it is the most frequently invoked standard in investment disputes.

In the case of the Philippines, one regional agreement where this principle is found is the ASEAN Comprehensive Investment Agreement (ACIA) signed by the Philippines with other ASEAN member-states in 2009 and in that regional treaty, fair and equitable treatment requires each Member State not to deny justice in any legal or administrative proceedings in accordance with the principle of due process.

Considering our earlier point that the due process argument is already moot given that President Duterte through the Office of the President has already provided that relief and is currently reviewing the DENR Secretary’s decision, the FET principle is one legal argument that may still be pursued by the mining companies.

The United Nations Conference on Trade and Development (UNCTAD) came up with an update of its backgrounders on key principles of international investment agreements in 2011 and its study of the cases in investment tribunals that dealt with the FET principle identified some state actions that are not considered fair and equitable treatment :

(a) Defeating investors’ legitimate expectations (in balance with the host State’s right to
regulate in public interest);

(b) Denial of justice and due process;

(c) Manifest arbitrariness in decision-making;

(d) Discrimination;

(e) Outright abusive treatment.

Of all these actions, it seems the only argument that may be pursued by the mining companies is the item dealing with the investors’ legitimate expectations, but even that has some elements to it as pointed out too by UNCTAD :

(1) Legitimate expectations may arise only from a State’s specific representations or commitments made to the investor, on which the latter has relied;

(2) The investor must be aware of the general regulatory environment in the host country;

(3) Investors’ expectations must be balanced against legitimate regulatory activities of host countries.

We cannot comment, as we don’t have information, on what may have been the representations made by the Government or any of its agencies, to the companies when they made their investments in the country but items (2) and (3) above will make the mining companies’ arguments of legitimate expectations difficult. The UNCTAD update even emphasized that the FET obligation does not prevent host States from acting in the public interest even if such acts adversely affect investments. This is an important qualification to the legitimate expectations approach, according to UNCTAD.

For all intents and purposes, Sec. Gina Lopez was acting in the public interest when she said that these closed mining operations were not complying with the rules set by the DENR, like operating in watersheds, among other violations. Any state action that involves enforcement of existing rules that were violated is something that no legitimate expectation of an investor can overcome. Notwithstanding this, in all likelihood, this FET argument will still be tried and there may be facts that may put other elements of the FET principle in play but for all appearances, this is not one strong argument that may carry the day for the mining companies.

oOo

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