Locsin wants to cancel contracts with Chinese companies on US blacklist

Duterte says he will not choose sides between US, China

Foreign Affairs Secretary Teodoro L. Locsin, Jr. said he would recommend cancelling local contracts of Chinese companies found involved in reclamation activities off the South China Sea following the release by the United States government of a blacklist.

This as President Rodrigo R. Duterte said he will not choose sides between the United States and China as tension brews over the involvement of a Chinese company blacklisted by the US in the Sangley Point International Airport project.

In an interview with CNN Philippines, Mr. Locsin said he would “strongly” recommend the termination of contracts if it is found that the Chinese companies were involved in the militarization of the South China Sea. This comes after the US said it will blacklist 24 Chinese companies found involved in military activity and environmental degradation in the disputed waters.

“If I find that any of those companies are doing business with us, then I would strongly
recommend we terminate that relationship with that company. If they were in any way involved
in the reclamation, then it becomes consistent on our part to terminate any contract with them,” he said.

He added, however, that he does not know specifically which companies these are nor does he have the final say in the termination of the contracts. He also said he would rather leave it to the Department of Trade and Industry and the National Economic Development Authority to handle it.

“On that specific issue, I’d rather wait for the two departments who are dealing with Chinese companies. And remember once these companies are already on, what do you do? Do you suspend the project? Those are the things that I want to ask them instead,” Mr. Locsin said.

Earlier this week, the United States Department of Commerce released a list of 24 Chinese companies linked to the reclamation of islands in the South China Sea.

The Philippines and China have long had a fraught relationship over the disputed South China Sea, with China disputing the Philippines sovereign rights on the West Philippine Sea portion which is an exclusive economic zone of the Philippines.

‘Prepare for the worst’

On the other hand, Mr. Locsin said China should “prepare for the worst” if its naval exercises cross into Philippine waters. This comes after China launched ballistic missiles in the South China Sea, said to be a threat to the US’ aerial activities in what China says are no-fly areas of the sea.

“I warned — and this kind of irritated Beijing — should those naval exercises spill over into my territory, then they must expect the worst,” he said.

A number of actions done by China have prompted Mr. Locsin to file diplomatic protests. Mr. Locsin said that despite the protests, he is wary about asserting the Philippines’ right to the West Philippine Sea and would rather keep its row with China between the two countries, without the help of the Arbitral Court of the United Nations Convention on the Law of the Sea (UNCLOS).

“What if it reopens (the case)? The question is, was it a violation of Philippine sovereignty? Our ruling already defined what’s ours. But if that is the question I’m going to bring up again to another court, they may reopen it. What if they change their minds? I’m even afraid that some of our neighbors may want to bring it up just precisely to lose it. I trust no one in this world,” he said.

The Philippines brought an arbitration case against the People’s Republic of China concerning a number of issues over the South China Sea. The Permanent Court of Arbitration ruled in favor of the Philippines in 2016.

Sangley Point

In a statement on Friday evening, Palace Spokesperson Harry L. Roque said “The Philippines considers the United States and China as special friends and trading partners. We hope that both partners of the Philippines will be able to draw an understanding and resolve any and all issues between them amicably and peacefully.”

He added that he hopes both China and the US will resolve any issues “amicably and peacefully.”

The statement comes after Cavite Governor Janvic C. Remulla said on Thursday that if there are security risks, he might terminate the contract with one of the subsidiaries of China Communications Construction Co. (CCCC) which is involved with the Sangley project. CCCC is among the Chinese companies blacklisted by the US Department of Commerce earlier this week for its link to reclamation activities off the South China Sea.

However on Friday, Mr. Remulla said he will leave it up to the national government to decide on the matter.

The first phase of the airport project is a joint effort of CCCC and MacroAsia Corp. and is expected to finish within a month.

Mr. Roque said that the President considers both the US and China as “special friends and trading partners” of the Philippines and has created an independent foreign policy. — Gillian M. Cortez