The 101-page original draft BBL by Rep. Belmonte et Al (House Bill 4994) is a challenge to analyze, and even with my patience at parsing documents, even I would admit that fully understanding the implications of every sentence is beyond my league. Fortunately, however, there is only one small part of the BBL that I am interested in. That is, this article focuses on Article V, Section 3 (29), to wit:
Exclusive powers are matters over which authority and jurisdiction shall pertain to the Bangsamoro Government. The Bangsamoro Government shall exercise these powers over… (29) Ancestral domain and natural resources [HB 4994].In this article, we will discuss how this clause could be one of the primary reasons why BBL failed to pass. Specifically, we will evaluate this clause from the lens of the country’s premier oligarch: First Pacific CEO and Philex chief Manuel V. Pangilinan (MVP).
Ancestral Domain and Natural ResourcesIf HB 4994 were enacted into law without revisions, the Bangsamoro Government (BangsaGov) will have sole authority and jurisdiction over all natural resources in the Bangsamoro region. The BangsaGov will have the sole power to process, issue, and revoke mining permits, the power which the Department of Environment and Natural Resources (DENR) has right now.
Simply stated, if BBL passes, the BangsaGov has the final say on who can mine in Bangsamoro and who cannot.
That is, Manny V. Pangilinan’s (MVP) Philex Mining operates in Mindanao [Philex], will be at the mercy of BangsaGov if it plans to expand in ARMM. Its sister company, Philex Petroleum, also used to mine coal in Zamboanga Sibugay, but has shuttered in 2013 citing unprofitability [GMA]. More on this later.
It’s also interesting that Ancestral Domain was clumped with Natural Resources on the same bullet point in the bill. Today, mining companies are required, on top of the DENR permit, to secure permission from ancestral rights holders (the Lumad or the Indigenous Peoples of Mindanao) if their operations includes ancestral domain land [UP].
For example. MVP’s Philex Mining benefited from the militarization of indigenous Lumad communities in the CARAGA region [Kalikasan].
To learn more about Lumad Killings, read: “TP: AFP Kills Lumad, Manobo Refugee tells Roxas”.
What’s in Bangsamoro?Recall that BangsaGov has the final say on mining permits under the original BBL draft. Thus, it’s logical to ask, “What can mineral resources can we find in Bangsamoro to begin with?”
The shaded area in the center is Liguasan Marsh in Maguindanao and Cotabato, and almost entirely within the Bangsamoro Region. Map Courtesy of Geo MAPS Cebu. facebook.com/geomapscebu
Take note of the two phrases “huge reservoir of natural gas” and “part of ancestral domain”. That is, if BBL passes in its original form, the BangsaGov will have sole power over Liguasan Marsh.
Is Bangsamoro oil even real?A leaked 2006 diplomatic cable from the US Embassy in Manila to the Central Intelligence Agency et Al states [Wikileaks]:
The DENR has identified natural gas and oil deposits in three areas of Mindanao and the Sulu Archipelago: the Cotabato Basin; the Davao-Agusan Basin; and, an area straddling Tawi-Tawi and Sulu. The Cotabato Basin, notably, includes the 288,000 hectare Liguasan Marsh, straddling the provinces of Maguindanao, North Cotabato, and Sultan Kudurat (sic).”
WikiLeaks is an international non-profit, journalistic organization that publishes secret information, news leaks, and classified media from anonymous sources [AntiWar].
Subsequent developments confirmed this leak.
In 2012, President Benigno Aquino (PNoy) himself, upon the request of MILF chair Murad Ebrahim, ordered a halt on all oil and gas drilling projects in ARMM pending a final agreement on wealth-sharing via the BBL [Inq].
“We have rich mineral resources in the area. It is only a matter of exploiting these resources,” Murad said [Rap].
A day later, the Manila Standard reported that the Malaysian government, through state-owned oil company Petronas Carigali, offered 2 billion ringgit (P 23 billion) to the Moro Islamic Liberation Front (MILF) for oil exploration rights in Liguasan Marsh [MS].
Under current laws, this offer is illegal. Under an enacted BBL, however, it’s perfectly possible.
Who gets the final say on ARMM oil?Everyone observed PNoy’s moratorium on ARMM oil exploration in as late as May 2014, with Energy Sec. Jericho Petilla having excluded ARMM from the 5th Philippine Energy Contracting Round (PECR5) [Rap]. In PECR5, the government essentially auctions oil exploration and exploitation contracts in various areas in the country to third parties.In September 2014, however, the ARMM Regional Board of Investments announced the accreditation of the Bangsamoro Oil and Fuels Corporation as the latter poured in P848 million capital for a petroleum exporting venture in the autonomous region. The firm has trading links with Malaysian petroleum exporting companies [Star].
The catch? Malaysia’s primary oil exporting company is state-owned Petronas Carigali [Petronas], the same company that offered to give the MILF P23 billion for exploration rights in 2012.
Maguindanao’s Mamasapano Clash happened four months later in January 2015 [GMA]. This was used to justify BBL’s non-passage.
Two weeks after the clash, Senator Ferdinand “Bongbong” Marcos Jr. (BBM) said, “I don’t know about dying but it is in a coma. [Rap]”
“If both houses of Congress vote today, I dare say not only this version but maybe any version [will not pass] because of course, emotions are running high and it is against the MILF because of the atrocities committed against our policemen,” BBM added.
What’s interesting, however, is BBM’s move half a year later.
In August 2015, BBM filed a revised Bangsamoro bill that included this new clause on page 76 [SB 2894]:
SECTION 165. NATURAL RESOURCES
The Bangsamoro Regional Government shall have the… power… over… natural resources… provided, that the strategic minerals such as… petroleum… and all sources of… energy shall remain under the control and supervision of the National Government.
In response, Peace Panel Chair Prof. Miriam Coronel-Ferrer, “Classifying fossil fuels and other sources of potential sources of energy as strategic is problematic. Aside from being non-scientific, it exposes all natural resources to arbitrary classification as strategic [Gov].”
Yes, ARMM oil and “strategic resources” are real.
So who gets to drill?Philex Petroleum is interested in ARMM oil, as evidenced by their 2015 bid on the Sulu Sea exploration contract in PECR5 [MS].
For now, let’s assume that the original BBL bill becomes law, i.e. BangsaGov gets full authority over what to do with their oil.
FIRST, the country doesn’t have enough locally-available technology to extract hydrocarbons so a 60-40 joint venture with a foreign company is necessary.
The foreign company will most probably be Petronas Carigali, as Malaysia has strong ties with the ARMM [TV5]. Moreover, as stated in the previous section, the Bangsamoro Oil and Fuels Corporation have close links to Malaysian oil exporters.
For this reason, it’s pretty clear that MVP’s Forum Energy [TP: Karen Davila] is out of the picture. Moreso for Indonesia’s state-owned oil company Pertamina, in case someone out there wishes to cite MVP’s Indonesian links via his overlord Anthoni Salim [TP: del Rosario].
SECOND, with Petronas’s likely 40% participation in the joint venture, the next step is to find a Filipino counterpart for the rest of the 60%.
ThinkingPinoy has reason to believe that Bangsamoro Oils and Fuels Corporation (BOFC) is still a relatively small company and it does not have the same kind of financial backing that MVP’s Philex Petroleum enjoys.
The catch, however, is Malaysia’s P25 billion offer to MILF in exchange for oil exploration rights. With the receipt of P25 billion, BOFC can meet capitalization requirements overnight.
That is, BOFC’s potential P25 billion can easily dwarf Philex Petroleum’s capitalization of just P 2 billion [Star].THIRD, some may argue that MVP can just give Philex Petroleum a boost, but judging fromFEC Resources’ 2012 Annual Report, bridging the P 23 billion gap will be difficult, as I quote [US SEC]:
“We have had a history of operating losses which may affect our ability to continue operations. We… (have an) accumulated deficit totaling $18,963,479 as of… 2012… As a result, we may not be able to sustain operations in the future without additional debt or equity financing.”
Philex Petroleum is FEC Resources's parent company [FEC].
In short, it will not be Philex Petroleum.
The Philippine National Oil Corporation (PNOC) ? Perhaps, if Congress will somehow find the political will to revitalize PNOC.
But Philex Petroleum? Most probably not.
Every other oligarch-owned Filipino firm? Most probably not.
To cut the long story short, the BBL in its original form is disadvantageous for the country’s oligarchs. As to whether that’s one of main reasons behind BBL’s non-passage, I don’t know.
But if I were an oligarch, the answer is yes.
After all, all these happened when the PNoy administration was still anticipating a President Roxas in 2016. If MVP and del Rosario can get us into war over their Reed Bank interests [TP:Trillanes], why can't they influence a Roxas administration wage war in ARMM? [ThinkingPinoy]
UPDATE: Some people raised the issue that the BBL didn't pass because it's unconsitutional, that it empowers backwards shariah law, etc. Let's assume that that is true. The question, however, is what does power over natural resources have anything to do with it?
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