The Supreme Court has ruled that the province of Palawan is not entitled to share in the proceeds of the Camago-Malampaya natural gas project.
In a decision written by Associate Justice Noel Tijam, the high court granted the petition of the national government seeking to reverse and set aside the Dec. 16, 2005 decision of the Regional Trial Court of Palawan, Branch 95, in Civil Case 3779 declaring that Palawan “is entitled to the 40 percent share” of the government’s earnings derived from the Camago-Malampaya natural gas project since Oct. 16, 2001.
The high court also denied the petition for review filed by Bishop Arigo Pedro Dulay, which questioned the constitutionality of Executive Order 683 of President Gloria Macapagal Arroyo authorizing the release of funds for development projects in Palawan pursuant to the Provisional Implementation Agreement between Palawan and the national government for being violative of the Constitution and the Local Government Code.
Palawan premised its claim on the ground that it had territorial jurisdiction over the Camago-Malampaya reservoir.
The Camago-Malampaya natural gas project is covered by Service Contract 38 between the national government and the contractor, which was subsequently composed of a consortium of Shell Philippines Exploration B.V. and Occidental Philippines Inc.
The tribunal held that there was no debate that the natural resource in the Camago-Malampaya reservoir belonged to the State, noting that Palawan’s claim was anchored not on ownership of the reservoir but on a revenue-sharing scheme that allows local government units to share in the proceeds of the use of national wealth provided they are found within their respective areas.
However, the high court found that the existing laws do not include the Camago-Malampaya reservoir within the area or territorial jurisdiction of the Province of Palawan.
“As defined in its organic law, the province of Palawan comprises merely of islands. The continental shelf, where the Camago-Malampaya reservoir is located, was clearly not included in its territory,” the high court said.
The Court also held that Presidential Decree 1596, which constituted Kalayaan as a separate municipality of the Province of Palawan, could not be the basis for holding that the Camago-Malampaya reservoir formed part of Palawan’s territory.
It declared that the delineation of territory in PD 1596 referred to Kalayaan alone and that the inclusion of the seabed, subsoil, and continental margin in Kalayaan’s territory could not by simple analogy be applied to Palawan.
Likewise, the tribunal also ruled that the definition of “Palawan” under Republic Act 7611 should not be taken as a statement of territorial limits for purposes of Section 7, Article X of the 1987 Constitution, but in the context of RA 7611 which is aimed at environmental monitoring, research and education.
