In 1946, after hijacking our war against Spain and keeping us for nearly 50 years as a colonial possession, the United States of America gave us back our freedom. That freedom was empty and meaningless because it was given with many strings attached. Our leaders accepted it because they thought this was still better than a mere promise. Moreover, our people hoped that America, victorious in war, would have the decency to help our country rise from the devastation of the war, which after all was America’s war.
Two of the sturdiest strings that kept us fastened to America’s political and economic life long after independence were the Military Bases Agreement and the Laurel-Langley Agreement. The bases agreement of March 1947 allowed the US to keep practically all its military bases in the Philippines and enjoy almost full extraterritorial sovereignty in the lands they occupied. The lease was supposed to run for 99 years, but this was reduced to 44 years in 1966, renewable under a new treaty. In a rare moment of nationalist sensibility, the Philippine Senate rejected a new treaty that sought to extend the term of US facilities in the country beyond September 1991.
The Laurel-Langley Agreement has received far less public attention. The agreement, a revised version of the Bell Trade Act of 1946, was basically a trade arrangement. But in addition, it gave Americans equal rights as Filipinos to exploit the country’s natural resources, engage in any business activity they chose, and own land. These rights were known as parity rights because they were meant to be reciprocal — Filipinos were to enjoy the same rights in the United States. Everyone knew that parity was absurd. But our desire to obtain full war damage compensation made us swallow our pride. We signed it in September 1955 and looked forward to its expiration in 1974.
Filipinos had become habituated to American domination of the economy that hardly anyone noticed that the agreement was due to expire. Only the growing nationalism of the youth in the ‘60s and early ‘70s kept the issue alive in the public consciousness. In August 1972, a month before Marcos declared martial law, the Supreme Court ruled on a question posed by William Quasha, an American lawyer residing in the Philippines. Quasha wanted to know if he could remain the owner of a piece of agricultural land acquired under the Laurel-Langley Agreement after 1974.
To Quasha’s and America’s dismay, the Supreme Court (which included Roberto Concepcion and JBL Reyes) ruled not only that American ownership rights would not be honored beyond 1974 but that such ownership had been illegal since 1946! This was a court that said No to America, antedating by 20 years the Senate that said
No to a new bases treaty in 1991. Such have been the peaks of Filipino nationalism; they all took shape against the vibrant background of student activism.
Quasha’s woes were however relieved by Marcos soon after he seized power as a dictator. To win American approval for martial law, Marcos told American firms that they would not lose their landholdings without just compensation. He assured them that notwithstanding the Supreme Court ruling, these properties would not be confiscated. A presidential decree he issued blunted the Supreme Court order, and gave American firms until May 1975 to submit divestment plans for the lands they occupied, assuring them of zero disruption in their operations, as they would be allowed to lease the same lands. Sure enough, many of these companies entered into paper arrangements with their Filipino employees or partners, ceding ownership to local entities but leasing the same properties back.
Others, like Getty Oil Company, opted to play the altruist game by donating these lands to educational institutions like the University of the Philippines. The deed of donation from Getty to UP was absolute and unconditional. It covered five parcels of land in Pandacan. But its consummation was made contingent upon UP’s willingness to sign a 25-year leaseback agreement based on terms dictated by the American donor. As in 1946, the American was saying: “Here’s your land – take it as a gift. But you can have it only if you agree to let me use it for as long as I want.” I do not know by what name lawyers refer to such immoral agreements between two highly unequal parties. But I am certain that the 1974 Supreme Court would not have countenanced such charades.
Getty’s holdings and rights in the country were subsequently transferred to Pilipinas Shell Petroleum Corporation, the local subsidiary of Shell, the multinational firm whose vaunted corporate social responsibility it advertises so abundantly. The lease contract with the UP for the Pandacan property expired in May 2000, and UP wants the land back. Shell demands that it be automatically renewed for another 25 years, pursuant to a 1977 amendment. The understanding is that, while the lease could be renewed only by mutual agreement, if there is a change in law or policy that makes it permissible later for alien corporations to lease lands beyond 25 years, the renewal of the lease would be automatic.
Shell thinks the Investor’s Lease Act of 1993, which allows aliens to lease land for 75 years, fulfills this condition. On this basis, it wants UP to automatically renew the lease on the same terms as the 1975 agreement. UP opposes automatic renewal and, at the very least, it demands an adjustment in the terms of the contract. Shell has sued.
This is more than a question of law; this is a question of what it takes to achieve a freedom that is more than an empty shell.
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