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Making China pay

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Jemy Gatdula

Being Right

US Secretary of State Mike Pompeo began the week with a blast: “There’s enormous evidence that… the virus originated in Wuhan, China.” His comments followed weeks of strident demands from many other countries — from Australia to the UK to Germany and Japan — for the totalitarian regime to open up regarding the events that led to this pandemic.

Law commentators suggest holding China liable by way of the international law on State responsibility, particularly as to public health. The possibilities on that front, however, remain to be seen: China has not conceded jurisdiction to the International Court of Justice, remains a permanent member of the Security Council with veto power, refused to join the International Criminal Court, and is suspected of inordinate closeness to the World Health Organization.

On the State to State level, the legal options of making China responsible seem minimal. One route is the World Trade Organization (WTO), which foresees global trade contracting by 13%-32%. For the Philippines, OFW remittances are expected to slow down to 2% (from 3%), and exports to fall by $300 million.

The WTO’s dispute settlement system under GATT Article XXIII theoretically allows cases to be filed when an act — any act — by a WTO member (and China is one recognizing the WTO Dispute Settlement Body’s jurisdiction) causes another member’s trade to suffer.

Another avenue for the Philippines is to offset possible pandemic related damages against its debts to China, which (as of March 2019) was at $980 million. Aside from the humongous trade loss mentioned above, the Philippine economy (at least according to the University of Asia and the Pacific’s Peter U) was set to grow by 6.5% this year. Most analysis now peg it at around 2%. Add P275 billion of the National Budget now realigned under the Bayanihan Law, P600 billion in additional economic stimulus, a $1.5 billion ADB loan, plus individual and corporate losses, related deaths, bankruptcies, and such.

Domestically, the first step for the Philippines should be to simply enforce its laws: criminal, tax, smuggling, and immigration.

As far as hauling China or its officials before a Philippine court, it’s a longshot. Yet there are avenues worth looking at. One is RA 9851: Thus, any person or group committing a “crime against humanity” against Filipino citizens, even though such a person is a foreign official, can be held liable by a Philippine court. Admittedly, regarding foreign officials, “international law may limit the application” of RA 9851. Nevertheless, the law itself is open to the possibility of such a suit being “within the bounds established under international law.”

Finally, two enterprising upper-class UA&P students with a knack for studying finance, military and political history, and law put forward another tact: to hold instead the Communist Party of China (CCP) liable.

Rob Ong and Carlos Victa argue that the CCP may be classified as a non-resident foreign entity with its own distinct legal personality separate from the People’s Republic of China (PROC). Thus, though sovereign immunity may (for the sake of argument) attach to PROC officials, as such, nevertheless, the CCP wholly controls and directs the actions of the PRC and its instrumentalities. The CCP effectively helms China’s activities within the Philippines, whether it be through a corporation owned by the PRC or any of its instrumentalities. And yet the CCP, not being a government agency, is not covered by sovereign immunity.

This line of argument does have some basis, particularly considering Yaodi Hu v Communist Party of China, 2012 WL 7160373, at *3 (W.D. Mich. Nov. 20, 2012), which precisely held that the CCP is not entitled to sovereign immunity under the US Foreign Sovereign Immunities act.

If the argument holds, then cases can be filed (as example but not limited to) for quasi-delict, Corporation Code violations or of environmental laws, and the abovementioned RA 9851, by our government motu proprio or by private Filipino citizens before our courts against the CCP or its officials, specially if the CCP has physical or business presence here in the Philippines. Assuming causal relation between the damages incurred by the Filipinos (death, physical injuries, loss of profit, or employment) and the CCP’s fault or malice (e.g., concealment of valuable information) is proven, then China’s funds or assets here in the Philippines can be garnished to answer for such damages.

All the foregoing, however, is merely meant to initiate studies on the matter. And note the options discussed here were limited to the legal. There are diplomatic, financial, technological, or other such alternatives worth researching.

Frankly, this should be a non-partisan issue among Filipinos. If indeed China is responsible for this pandemic and if indeed it is possible to hold China to account, then we should unite in exerting all efforts that justice be done. That is, assuming our government is so inclined, has Filipino interests in mind, and possessed of the political will and foreign affairs savviness to do so.

 

Jemy Gatdula is a Senior Fellow of the Philippine Council for Foreign Relations and a Philippine Judicial Academy law lecturer for constitutional philosophy and jurisprudence.

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