On contracts with Chinese firms: Not easy to terminate

on contracts with chinese firms not easy to terminate - On contracts with Chinese firms: Not easy to terminate

THE SENATE committee on foreign relations is ready to look into proposals to terminate existing contracts with Chinese companies that are involved in reclamation activities in the South China Sea, but its chairman noted that aborting signed deals is not that simple.

“The problem with terminating contracts entered into is that this can open us (the country) to lawsuits,” Senator Aquilino L. Pimentel III, the committee chairman, said in a phone message on Monday.

He said any termination must be based on the failure to meet terms in the  contracts.

“It is better to look at the delivery or satisfaction of the deliverables in each contract. Those non-compliant (like delay, substandard work) shall be terminated,” Mr. Pimentel said.

Foreign Affairs Secretary Teodoro L. Locsin, Jr. last week recommended to cancel contracts signed with Chinese companies that have been blacklisted by the United States.

The American government last week imposed a restriction on 24 China-owned companies that took part in the illegal construction of artificial islands in the disputed sea.

This comes after the US categorically declared in July that most of China’s territorial claims are illegal, and expressed support for the Hague ruling won by the Philippines in 2016.

Mr. Pimentel said, “The question to ask is: Why did we in the first place enter into contracts with these companies? Do we have such poor intel work?”

The senator said hearings on the issue will be conducted once a resolution or bill has been formally filed and referred to the committee.

He added that the committee may recommend adopting Mr. Locsin’s proposal “for future contracts.”

“The executive branch can expressly specify that (involvement in South China Sea activities) as a negative criterion,” Mr. Pimentel said. — Charmaine A. Tadalan

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