Territorial Disputes in the South China Sea - Defence LK

Territorial Disputes in theSouth China SeaJing Huang

Navigating Rough Waters

Andrew Billo

Territorial Disputes in the South China Sea

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Territorial Disputes in the South China SeaNavigating Rough Waters

Edited by

Jing HuangLee Foundation Professor on US-China Relations and Director, Centre on Asia and Globalisation, Lee Kuan Yew School of Public Policy, National University of Singapore

Andrew BilloAssociate Fellow, Asia Society

Selection and Editorial Matter © Jing Huang and Andrew Billo 2015All Remaining Chapters © Their Remaining Contributors 2015

All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission.

No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6–10 Kirby Street, London EC1N 8TS.

Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages.

The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988.

First published 2015 byPALGRAVE MACMILLAN

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v

Contents

Acknowledgements vii

Centre on Asia and Globalisation, Lee Kuan Yew School of Public Policy, National Univeristy of Singapore ix

Notes on Contributors x

Introduction: Unknotting Tangled Lines in the South China Sea Dispute 1Jing Huang and Sharinee Jagtiani

Part I Origins

1 Origins of the South China Sea Dispute 15 Nguyen Thi Lan Anh

Part II Legal Dimensions

2 “Setting Aside Disputes and Pursuing Joint Development” at Crossroads in South China Sea 39

Zhang Xinjun

3 The Philippines v. China Case and the South China Sea Disputes 54

Robert C. Beckman

Part III The Role of ASEAN: Challenges and Choices

4 ASEAN’s Position on the South China Sea and Implications for Regional Peace and Security 69

Yee Kuang Heng

5 A Critical Assessment of ASEAN’s Diplomacy Regarding the South China Sea 82

Walter Lohman

vi Contents

Part IV Regional Perspectives

6 Philippines’ Approaches to the South China Sea Disputes: International Arbitration and the Challenges of a Rule-Based Regime 99

Angelo A. Jimenez

7 Taiwan in the South China Sea Disputes: Policies and Prospects 128

Hui-Yi Katherine Tseng

Part V Solutions and Future Prospects

8 The United States, China, and Cooperation in the South China Sea 149

Patrick M. Cronin

9 The South China Sea Disputes: Whither a Solution? 164 Yang Fang

Conclusion: Harmony from Disunity: Core Issues and Opportunities in the South China Sea 189Andrew Billo

Index 205

vii

Acknowledgements

This publication is a joint effort of all the contributing authors, whose research expertise has made this volume rich with perspective and analysis. This volume would not have been possible without funding from the Centre on Asia and Globalisation (CAG), Lee Kuan Yew School of Public Policy, National University of Singapore. The chap-ters in this volume are a product of a conference co-hosted by CAG and Asia Society that was held at the latter’s headquarters in New York, in March 2013. Apart from the contributing authors, the conference welcomed Ambassador Christopher Hill, Dean of the Josef Korbel School of International Studies, University of Denver; Ms. Nguyen Thi Thanh Ha, Director General of Department of International Law and Treaties, Ministry of Foreign Affairs of Vietnam; Ambassador Stapleton Roy, Director of Kissinger Institute on China and the Unites States, Woodrow Wilson International Center for Scholars; Jerome A. Cohen Professor of law, New York University School of Law; General Zhu Chenghu, Dean of the Defense Affairs Institute, China’s National Defense University of the People’s Liberation Army; Bernard Oxman, Richard A. Hausler Professor of Law, University of Miami; Duncan McCargo, Professor of Southeast Asian Politics, University of Leeds; Professor David Denoon, Professor of Politics & Economics, Director, New York University Center on US-China Relations, and Mr. Henry S. Bensurto, Jr. Secretary General, Commission on Maritime and Ocean Affairs Secretariat, Department of Foreign Affairs, Philippines. These experts were a key part of this confer-ence as speakers, session moderators, and discussants. Their invaluable comments were used by contributors when revising their papers for publication.

In addition, a number of staff from CAG and Asia Society deserve acknowledgement for their valuable assistance in both the prepara-tion of this volume’s contributions for publication and for helping to run the research project that the volume stems from. The team at the Centre on Asia and Globalisation – Jasmin Kaur, manager at CAG, and Research Associates Yang Fang and Chen Huaiyan–played an essential role in ensuring that the conference held in March 2013 was a great success. The team at Asia Society included Tom Nagorski, Asia Society’s executive vice president, and Michael Roberts, former executive director

viii Acknowledgements

of Asia Society’s New York Public Programmes Division, who ardently supported providing a platform for discussion of South China Sea terri-torial disputes. In addition, Diana Choi, former Asia Society Programme Officer, spent many hours supporting the project’s development, including significant liaison with the conference attendees and handling numerous other logistical arrangements. Yoshie Ito, Asia Society’s assistant director for Business Programmes, Ann Kirkup, manager in the New York Public Programs Department, Feng Feng, James Kochien, Bart Orr, Jenna Pan, and Krystal Sevilla also assisted in implementing the conference programme.

Our deep appreciation also goes to Andrew Baird at Palgrave for his helpful and timely correspondence and coordination with us in the process of publication. Further, we thank the copy editors who have scrutinised the chapters for consistency.

Last but not least, Sharinee Jagtiani is indispensable for the publica-tion of this volume. As a researcher at CAG, not only did she carry out the painstaking task of copy-editing, but she also acted as the “gate-keeper” for all the chapters to make sure the analysis is factually accurate and logically sound.

ix

Centre on Asia and Globalisation, Lee Kuan Yew School of Public Policy, National University of Singapore

The Centre on Asia and Globalisation (CAG) at the Lee Kuan Yew School of Public Policy, National University of Singapore, is a leading research institute focused on producing quality academic research relevant to public policy. Its motto “Objective Research with Impact” reflects the centre’s commitment to ensuring that its analysis informs policy practi-tioners, academics, and the general public of the trends of political and economic development in Asia and its implications to global peace and stability. This takes place through a combination of rigorous academic inquiry, expert collaboration, high-level dialogue, public outreach, stra-tegic networks, and capacity building and training. The institute, staffed by an international team of researchers, is uniquely placed to bridge Asia and the world on issues of global significance. Within this remit, the centre focuses on four main areas:

Great Power Relations in the Asia-Pacific ●

Developing Asia Pacific’s Last Frontier ●

Public Goods Issues ●

Major Issues in maintaining Regional Peace and Development ●

In recognition of the complex inter-relationship between levels of decision-making, CAG investigates the above fields at global, regional, national, and sub-national levels. It welcomes exchange with other researchers, governments, business, civil society, and other stakeholders.

x

Notes on Contributors

Angelo Azura Jimenez is of counsel at the Jaromay Laurente and Pamaos Law Offices in the Philippines. He is also executive vice presi-dent of the Asia Pacific Basin for Energy Strategies, Inc., a Manila-based energy and economic think tank recently granted special consultative status by the United Nations Economic and Social Council (ECOSOC). Until 2007, he was deputy administrator of the Philippines’ Overseas Workers Welfare Administration (OWWA). He was Philippines’ labour attaché to Japan, Kuwait, and Iraq. While in government, he special-ised in crisis management, handled special assignments such as hostage rescue and negotiations in Iraq from 2004 to 2005, and was chair of the crisis management committee under the Department of Labour during the war in Lebanon in 2006. He took his degrees in Sociology and Law at the University of the Philippines, and his Masters in Public Management degree at the National University of Singapore, Lee Kuan Yew School of Public Policy. He completed a semester as a Lee Kuan Yew fellow at the Harvard Kennedy School of Government in 2012.

Robert Beckman heads the ocean law and policy program and is the director of the Centre for International Law at the National University of Singapore (NUS), which was established in 2009. Beckman is also an associate professor at the NUS Faculty of Law. He currently teaches Ocean Law and Policy in Asia and Public International Law. He is an expert on the issues of law of the sea in Southeast Asia, including piracy, maritime security, the South China Sea, and the Straits of Malacca and Singapore. He served for several years as a regional resource person in the workshops on managing potential conflicts in the South China Sea. Professor Beckman also lectures in the summer programme at the Rhodes Academy of Oceans Law and Policy in Rhodes, Greece.

Andrew Billo is an associate fellow with the Asia Society in New York, having worked there previously as assistant director for policy programmes. Billo provides frequent commentaries, op-eds, and research reports for international news outlets including CNN, Project Syndicate, The Atlantic, and a range of regional publications, including the Straits Times Singapore, Bangkok Post, The Diplomat, and the South China Morning Post. Prior to working at the Asia Society, he worked for seven years as

Notes on Contributors xi

an officer with the International Organization for Migration and was posted to Vietnam, Jordan, and Cambodia. Billo holds a master’s degree in Public Policy from the Lee Kuan Yew School of Public Policy, National University of Singapore and a master’s degree in International Affairs from Columbia University’s School for International and Public Affairs (SIPA).

Patrick Cronin is a senior advisor and senior director of the Asia-Pacific Security Program at the Center for a New American Security (CNAS). Previously, he was the director of the Institute for National Strategic Studies (INSS) at National Defense University, United States, and has a nearly 30-year career inside government and academic research centres. He used to serve at the London-based International Institute for Strategic Studies (IISS) and the Center for Strategic and International Studies (CSIS). In 2001, he was confirmed by the Senate to the third-ranking position at the US Agency for International Development. Dr. Cronin received both his MPhil and DPhil degrees from the University of Oxford, and graduated with high honours from the University of Florida.

Yang Fang commenced her doctoral studies with the Strategic and Defence Studies Centre at the Australian National University in July 2014. Previously, she was a research associate at the Centre on Asia and Globalisation (CAG) at the Lee Kuan Yew School of Public Policy, Singapore from 2011 to 2014. She was an Associate Research Fellow with the Maritime Security Programme at S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University from 2009 to 2011 and received her MSc from RSIS in 2009. Her research interests lie in maritime security issues ranging from maritime boundary disputes in East Asia, to naval development in the Asia-Pacific, Asian countries’ interest in the Arctic, and non-traditional maritime security issues.

Jing Huang is a Lee Foundation Professor on US-China Relations and Director of Centre on Asia and Globalisation (CAG) at Lee Kuan Yew School of Public Policy. As an internationally recognised expert on Chinese politics, China’s foreign relations and security issues in Asia-Pacific, Huang has written three books and numerous journal articles, book chapters, policy papers, and op-eds on Chinese politics, China’s development strategy, China’s foreign policy, US-China relations, the military, and security issues in the Asia-Pacific. His book, Factionalism in Chinese Communist Politics (Cambridge: Cambridge University Press,

xii Notes on Contributors

2000), won Masayoshi Ohira Memorial Prize in 2002. Huang is also a columnist for several English and Chinese newspapers and magazines. Before joining the Lee Kuan Yew School, Huang was a Senior Fellow at the John Thornton China Center at the Brookings Institution (2004–2008). He also worked at Harvard University (1993–1994), Utah State University (1994–2004) and Stanford University (2002–2003). Huang received his PhD in Political Science from Harvard University, MA from Fudan University, and BA from Sichuan University. Huang was a Residential Fellow at the Rockefeller Foundation Bellagio Center in 2012 and a Richard von Weizsäcker Fellow from the Robert Bosch Stiftung in 2014.

Sharinee Jagtiani is a research associate at the Centre on Asia and Globalisation (CAG) at the Lee Kuan Yew School of Public Policy, Singapore. She has a master’s degree in International Relations from the University of Bristol, United Kingdom, and an undergraduate degree in Mass Media Journalism from the University of Mumbai, India. Her current research focuses on the regional security in Asia in the context of the Obama-endorsed “strategic re-balance” to Asia and China’s rise. Before CAG, she was a visiting research analyst with the South Asia Programme of the S. Rajaratnam School of International Studies, Nanyang Technological University.

Yee Kuang Heng is an associate professor and assistant dean (Research) at the Lee Kuan Yew School of Public Policy. Dr. Heng’s research interests include security risks in the age of globalisation; Singapore’s experience of managing global risks as a global city; “soft” power strategies in the Asia-Pacific; great power politics; and strategic studies and the evolution of strategic cultures. Dr. Heng holds a PhD in International Relations from the London School of Economics and Political Science (LSE), UK, where he also taught from 2002 to 2003. Before joining the Lee Kuan Yew School, he was a lecturer (assistant professor) in International Relations at the University of St Andrews, UK (2007–2011). He was also a lecturer (assistant professor) in Political Science at Trinity College, Dublin, Ireland (2004–2007).

Nguyen Thi Lan Anh is the vice dean of the International Law Faculty, Diplomatic Academy of Vietnam, where she has taught since 2000. She teaches courses in Public International Law, International Law of the Sea, and International Dispute Settlement. She is also a research fellow at the Institute for East Sea (South China Sea) Studies. Lan Anh received a bachelor of arts in Law from Hanoi Law University in 1998, a bachelor

Notes on Contributors xiii

of arts degree in International Relations from the Diplomatic Academy of Vietnam in 1999, and a master of arts in International, European and Commercial Law degree from the University of Sheffield in 2004. She obtained a PhD in International Law from the University of Bristol in 2008.

Walter Lohman is director of The Heritage Foundation’s Asian Studies Center. Lohman joined Heritage in 2006 as senior research fellow for Southeast Asia, Australia, and New Zealand. He is also currently an Adjunct Professor at Georgetown University leading a graduate seminar on American foreign policy interests in Southeast Asia. Before joining Heritage, Lohman served as senior vice president and executive director of the US-ASEAN Business Council. The other part of Lohman’s career has been spent as a Senate staff member. In 2002, he served as senior professional Republican staff advising Sen. Jesse Helms (R-NC) on issues affecting East Asia. From 1991 to 1996, he served as a policy aide to Sen. John McCain (R-AZ) advising McCain on foreign policy, trade, and defense issues. Lohman has a bachelor’s degree in humanities from Virginia Wesleyan College and a master’s degree in foreign affairs from the University of Virginia.

Hui-Yi Katherine Tseng is a research associate in the East Asian Institute. She obtained her doctoral degree with the University of Wisconsin, Madison, United States, after which she worked at the Beijing Arbitration Committee, studying arbitration issues in modern China. She has a master’s degree from Cambridge and New York University and was a part of the WTO negotiation team for the Taiwanese Government. Her research interests cover international dispute settlement, law of the sea, and international law and history.

Zhang Xinjun is an associate professor of Public International Law at Tsinghua University, Beijing, China. His research interests include the Law of the Sea, International Environmental Law, Non-proliferation Law, and the Law of Treaties. He is the executive director of the Centre for the Law of the Sea Study in Tsinghua Law School.

Map of South China Sea.

Reproduced with permission from a map prepared by Clive Schofield and Andi Arsana of the Australian National Centre for Ocean Resources and Security (ANCORS), University of Wollongong, Australia, included with the January 2013 issue of the American Journal of International Law © 2013 American Society of International Law. All rights reserved.

1

With a constant resurgence of tensions over territorial disputes in the South China Sea, the prospects of developing an effective and long-term “solution” to the issue are becoming increasingly challenging. The dispute exists within a complex web composed of claims of historical sovereignty, legal ambiguities, and a relatively constrained Association of Southeast Asian Nations (ASEAN). Most importantly, Southeast Asian regional security hinges on the geopolitical climax of two major powers, the United States and China, both seeking to establish a primary and lasting presence in the region. While the shadow of external actors weighs heavily over choices and decisions of Southeast Asian countries, leaders in claimant countries have used sovereignty disputes as rallying points to solidify the legitimacy to govern their own people. As a result, the disputes now involve an irreversible nationalistic sentiment that leaders themselves might find challenging to dismiss when it comes to making compromises while negotiating solutions.

The South China Sea is a semi-enclosed sea located south of main-land China and Taiwan, east of Vietnam, west of Philippines and north of Brunei and Malaysia. It has a vast number of insular features, most of which are uninhabited. Of these, the most important (hence most contested) island groups are the Paracels and the Spratlys. The claims by China, Vietnam, Philippines, Malaysia, Brunei, and Taiwan (Republic of China) over these groups of islands and rocks, which have been occu-pied by various claimant countries, have been an on-going source of tension and even conflict in the South China Sea, which in turn under-mine the peace and stability of the entire Asia-Pacific region.

Introduction: Unknotting Tangled Lines in the South China Sea DisputeJing Huang and Sharinee Jagtiani

2 Jing Huang and Sharinee Jagtiani

History Offers Little to Solve the Disputes

Since the early days, the Chinese, Vietnamese, Filipinos, and Malays have been fishing in the South China Sea. Moreover, the area was a key route through which trade, together with cultural and religious exchanges, was carried out between China, India, the Gulf, and the Middle East. The Chinese seafarers were well aware of the navigational challenges of sailing across the area and the Spratlys and Paracels were seen as a source of danger. While archaeological evidence suggests that Admiral Zheng He (1405–1433) may have visited various islands, the purpose was to map out a safe sailing route rather than acquiring territory. Furthermore, the notion of sovereignty over areas of land or sea, rather than people, was a fundamentally modern concept that was unknown in those days (Till, 2008, p. 27).

Despite the unprecedented voyages of Zheng He however, the Ming Dynasty (1368–1644) carried on the policy of banning maritime trade for the sake of internal security. The vacuum of maritime governance in the South China Sea facilitated the opening up of the sea to the Europeans, who began appearing in the Indian Ocean (Chao, 1987). This made it difficult for the Chinese, or anyone else in the area, to challenge the Western intruders and their ideas of territorial sovereignty (Till, 2008). Though the Qing dynasty (1644–1911) had established a “flourishing” trade between the East and West over the South China Sea, there was no tradition of China clearly marking its maritime territory (Elleman, 2011). Thus, historical activities in the South China Sea can hardly provide sufficient justification to the sovereignty claims made by the claimant countries, including China, in the modern world.

The Roots of Sovereignty Claims and Entangling UNCLOS

It was the Western imperial powers that brought the concept, and hence the practice, of sovereignty to the region. This marked the early stages of sovereignty disputes, that persist even today. Apart from the concept of sovereignty, the Europeans also brought the concept of “freedom of navigation.” There was a major distinction between land and sea, where the former was to be divided into territories with mapped and demar-cated borders, while the latter was to be free for all, except for a narrow band of territorial waters along the coast (Tonnesson, 2002, p. 6).

Japan’s victory in the Sino-Japan War of 1885 stimulated its consider-able interest in establishing claims over territorial features in the South China Sea (Gregor, 1989). During the Second World War, China and

Unknotting Tangled Lines 3

Vietnam claimed sovereignty over the islands and atolls in the South China Sea by virtue of being under Japanese and French administration respectively (Gregor, 1989). Japan used its bases in the South China Sea as a key strategy against the United States and the allied powers. It was through bloody battles that the United States managed to quash the Japanese forces until the latter relinquished all its territorial claims in the South China Sea by acceding to the Potsdam Declaration on 26 July 1945, which was later formalised as the San Francisco Treaty in 1951.

The Second World War hence demonstrated the strategic importance of the South China Sea in modern global affairs, in the maintenance of regional peace and stability. While the United States became the most dominant naval power in the region by the end of the Second World War, it took little interest in the territorial features in the South China Sea. The most active claimant became the Republic of China (ROC), which, under the governance of Chiang Kai-shek, sent naval expeditions to the Paracels and the Spratlys in 1945–46. In 1947, the ROC Ministry of Interior renamed 149 of the islands, set up sovereignty markers, and then published the Map of the South China Sea Islands in November, with permanent presence on Woody Island and Itu Aba (Tonnesson, 2002). It was on this map that the internationally controversial U-shaped line was drawn, encompassing virtually all of the South China Sea. In 1949, the People’s Republic of China (PRC) was established under the Chinese Communist Party (CCP) while the ROC Nationalists were driven to Taiwan. Nevertheless, the cartography illustrating the same dashes can be found emanating from the PRC even now (Franckx & Benatar, 2011). The map later became standard in Taiwan and mainland China, although its legal status has not been clarified (Tonnesson, 2002).

The ambiguity in the sovereignty of the islands was further compli-cated due to the process of decolonisation that ensued, and the crea-tion of new Southeast Asian states that later became active claimants to territorial features of the South China Sea. Some of these states based their claims on those of their colonial predecessors. The Vietnamese claim, for instance, was not only based on historic activities from the Nguyen Dynasty (seventeenth to nineteenth centuries), but by the right of succession from a French claim to the islands first made in 1933. The Philippines, on the other hand, based its claim on the act of “discovery” by a Filipino businessman, Thomas Cloma, in 1947. Malaysia and Brunei are more recent claimants, making their claims based on the 1982 Law of the Sea Convention (Joyner, 1999).

In this region, fast economic growth amidst globalisation, since the 1970s, made prominent the maritime-resource dimension of the dispute,


as it coincided with the developments in international law towards regarding a codification of customary principles, and the emerging trends concerning the use of oceans were epitomised by the UNCLOS (United Nations Convention on the Law of the Sea) process. Countries began intensifying the legal rights over claims during the 1970s, when petroleum exploration became real and the 1982 Law of the Sea (LOS) emerged as the standard for demarcating offshore jurisdictional limits for resource exploitation (Joyner, 1999). The prospect of finding oil provided new incentive for pursuing sovereignty claims assertively, and hence made it more acceptable to spend on maintaining military resources in hostile environments (Tonnesson, 2002, p. 14).

UNCLOS has gained widespread acceptance by most countries in the world, and all South China Sea littoral states (excluding Taiwan) are party to it. The Southeast Asian states sprang at the opportunities emerging from the new legal regime, as it granted littoral states the right to establish a territorial sea up to a limit of 12 nautical miles (Article 3) and an Exclusive Economic Zone (EEZ) of not more than 200 nautical miles from the their baselines (Article 57). States would also be granted the sovereign right to exploit marine resources (notably fish) in their respective EEZs. While an international legal regime over maritime delimitation might have aimed to bring clarity to maritime disputes, it in fact added new complexity to them in the context of the South China Sea. As per UNCLOS, lying to the north of the South China Sea, China would not be able to project a mari-time claim from the mainland to the centre where the Spratly Islands are located. Only if the Spratly islands were under Chinese sovereignty would it be entitled to claim large maritime zones based on whether the features are classified as rocks or islands under Article 121 of the LOS convention (Thang & Tao, 2012). Chapters 2 and 3 throw greater light on the legal complexities of the dispute, and through this analysis, it is evident that the disputes cannot be resolved solely through legal solutions, but need political ones that might encourage a compromise.

Development, Nationalism, and Security

Over the years, the disputes have been shrouded in greater complexity, making a compromise even more challenging to attain. This is due to three main reasons, which the various chapters in this volume address. The first and most important challenge is related to economic develop-ment. Globalisation has integrated littoral, regional, and extra regional economies to a great extent, making the sea lines of communication that traverse through the South China Sea vital for various countries’


development. According to the US Energy Information Administration (EIA), more than half of the world’s annual merchant fleet tonnage passes through the Straits of Malacca, Sunda, and Lombok, with the majority continuing on to the South China Sea. Almost a third of global crude oil and over half of the global LNG trade passes through the South China Sea, making it one of the most important trade routes in the world. EIA also estimates that the South China Sea contains approxi-mately 11 billion barrels of oil and 190 trillion cubic feet of natural gas in proved and probable reserves (EIA, 2013).

Moreover, the South China Sea is a vital source of fisheries, accounting for one-tenth of the world’s global fishery catch, and playing host to a multi-billion dollar fishing industry (Lucio Blanco Pitlo III, 2013). It has recently been argued that fisheries, more than fossil fuels, can ignite regional conflict as long-range commercial fishing and declining fisheries around coastal areas have pushed fishermen into the disputed waters of the South China Sea (Lucio Blanco Pitlo III, 2013). Conflicts over fishing incidents are potentially dangerous and, in fact, the 2012 Scarborough Shoal standoff was triggered by Chinese fishing boats in disputed waters. The Chinese eventually gained control of the outcrop after Manila backed down. This has now become an international case where Philippines has sought UN arbitration to settle the dispute, a move rejected by China. As recently as January 2014, tensions arose between the two countries over a ruling by the former requiring foreign fishing vessels to secure permission to enter much of the South China Sea. Hence, the economic value of claims in the South China Sea makes it very challenging to achieve a compromise. Often, the conflicts with fishermen resonate with the domestic politics of Southeast Asian nations. The fisheries sector provides direct and indirect employment to over one million people, or about 5% of the national labour force in the Philippines (FAO) and close to two million in Vietnam (Ministry of Fisheries and the World Bank, 2005).

Harassment of fisher folk has fuelled strong anti-China sentiment in Vietnam and the Philippines. This brings us to the second chal-lenge in dealing with the disputes – domestic politics and the rise of nationalism. As key states involved in sovereignty disputes in the South China Sea, Vietnam, and Philippines have not hesitated from asserting their interests in it. Claims over the South China Sea resonate deeply within the historical narrative that forces them to take a strong position over territorial claims. Since 2009, there has been an increase in Sino-Vietnamese tensions, sparking anti-China protests in the country. While the Vietnamese government made attempts to cool, if not crack down


on the demonstrations as it would undermine relations between two countries as well as domestic political stability, protests held in June–July 2011 accused the government of being too soft on China (Storey & Schofield, 2009).

However, progress has been made on this front. While both coun-tries have established a hotline to deal with fishery incidents in South China Sea waters, considerable anger reigns amongst Vietnamese people, echoing a deep domestic resentment (Xinhua, 2013). Despite strong communist party links between Vietnam and China, neither government can afford to overlook the political implications of rising nationalism at home. This makes negotiations even more challenging in the long run.

Tensions between China and Philippines increased since Benigno Aquino III took office in 2010, have further raised serious concerns over a possible escalation that could lead to a conflict in the South China Sea. The previous administration under President Arroyo took a moderate posi-tion on Beijing and was more open to being a recipient of Beijing’s charm offensive. She was later accused of trading Philippine territory for Chinese development assistance in the South China Sea. Sino-Philippine relations began to sour in the early 1990s, post China’s occupation of the Mischief Reef. This only intensified with the Arroyo administration’s alleged “selling-out” to China. A study of Philippine public opinion conducted in 2012, after the Reed Bank and Scarborough Shoal standoff between the Philippines and China, revealed that not only did the Filipinos blame China for the incidents, but they also blamed their own government for being too weak, complacent and lacking a strategic approach towards China (Gallardo & Baviera, 2012). This has substantially restrained Manila’s manoeuvring space in negotiating with Beijing, making it diffi-cult for any bilaterally acceptable solutions in the near future. Since January 2013, the case of Philippines versus China has been pending in the Permanent Court of Arbitration in the Hague. The case concerns the legality of China’s nine-dotted line claim over the South China Sea under UNCLOS. The case has cast an ominous shadow over Sino-Philippine rela-tions and, by extension, the South China Sea disputes.

In comparison to Vietnam and the Philippines, both Malaysia and Brunei have been quieter claimants as they have managed to sustain rela-tively strong economic and diplomatic ties with China, thus reducing the possibility of territorial spats in the South China Sea area. Taiwan, on the other hand, is in an awkward position. To begin with, the ROC government, which has ruled Taiwan since 1949, is the historical author of the U-shaped lines. In addition, the one-China policy adopted by the claimant countries in Southeast Asia has prevented them from having


any normal relationship with Taiwan. Thus, while PRC does not directly challenge Taiwan/ROC’s claims, considering its claims as their own, the lack of internationally recognised legal status prevents Taiwan from participating in multilateral accords or conducting bilateral negotia-tions (ICG, 2012). Although Beijing has hinted at a joint position and development with Taipei in the South China Sea, the latter is reluctant to join hands with Beijing because this might backfire on its ‘informal’ but important relations with the United States and ASEAN.

Moreover, Taiwan’s position in the South China Sea is defined by domestic politics. While the ruling Kuomintang party (KMT) favours stronger ties with Beijing, its rival, the Democratic Progressive Party (DPP), is against any kind of cooperation with Beijing in the South China Sea for fear that this would help to promote Beijing’s agenda of reunification. Meanwhile, Taiwan is very much a party to the friction in the South China Sea and has clashed with Manila and Hanoi over the disputed waters. The division amongst the two parties in Taiwan signi-fies how the disputes ring a strong domestic chord and are closely inter-twined with different political identities, hence the different expressions of nationalism in Taiwan. Chapter 7 of this volume discusses the unique position of Taiwan in greater depth.

Last, but not the least, the dispute exists in the context of the ques-tion of the national and maritime security of all the claimant countries and the entire region. China has a bitter memory of the intrusions by the Western imperialist powers who had dominated the South China Sea during the colonial period. The fight against Japanese forces in Southeast Asia during the Second World War, in alliance with the United States, further cemented the understanding that the South China Sea is geopolitically vital for China’s security. As China is growing into a global power with an ambition to build up a blue water navy, the area becomes strategically more important to the rising power (Huang, 2010). Whoever controls the South China Sea controls the western Pacific.

Moreover, as Geoffrey Till argues, so long as the value of the resources increases in tandem with a growing world population, the sea will remain central to the world trading system. This inevitably implies that naval and other maritime forces play an essential role in the handling of the maritime disputes. This makes the tensions in the South China Sea potentially explosive, especially when naval forces are directly involved. With a vast number of untapped resources and its strategic importance, the region stands geopolitically between the two major global powers, the United States and China, both of which have a substantial military presence in the region, while the other claimant countries are all seeking


to modernise their military forces, to the best of their means. After all, China and Vietnam went to war in 1974 and 1988 over disputed territo-ries in the South China Sea.

Indeed, nowadays most Southeast Asian concerns stem from Beijing’s hard-line position in the South China Sea. Despite China’s cooperative approach in the late 1990s, which resulted in the establishment of a Declaration on the Conduct of Parties in the South China Sea in 2002, China’s increasing “new assertiveness,” together with its impressive mili-tary build-up, has raised serious security concerns and anxiety among not only the claimant countries but also the entire Asian-Pacific commu-nity, including the United States (Huang, 2013a). Since 2005, China has increased its patrolling activities and the frequency with which foreign fishing vessels are seized, and strengthened its constabulary forces and maritime enforcement agencies (Patalano, 2013). China’s aggressive behaviour is mostly just a product of it being a growing economic power that uses its air and naval influence to protect its vulnerable trade routes (Yahuda, 2012). Beijing’s seemingly “Sinocentric” approach has given rise to growing suspicion of its claimed “peaceful rise” on the one hand and increasing desire among the ASEAN member-countries for a substantive US presence in the region on the other. Meanwhile, the US involvement in the South China Sea affairs is justified by its important interests in main-taining peace and freedom of navigation in these waters (Huang, 2013b).

Given the number of regional and extra-regional countries involved in the disputes, ASEAN, as a regional institution, is facing an unprece-dented opportunity as well as formidable challenges. Given its pragmatic approach, ASEAN’s capability to deal with these challenges has become a core test for its unity. While it has come a long way since the time of its inception, the ASEAN community is still struggling to achieve a unani-mous position over how to manage China’s rise in the context of the disputes. Chapters 4 and 5 address the sharp differences that exist over Southeast Asian positions. These chapters reflect the unlikely chance that any major solutions from ASEAN are devised in the near future.

With these issues in mind, the primary theme and objective of this volume is to provide an in-depth analysis of the complexities of the on-going territorial dispute in the South China Sea region through a multi-tude of perspectives and approaches, including those of ASEAN, China, and the United States. Through nine chapters, it aims to unpack the historical, legal, and political aspects of the dispute, taking into account the difference in viewpoint coming from authors on either side of the Pacific. It recog-nises that the dispute has the potential to destabilise East and Southeast Asia, and even the entire Asia-Pacific, if it is left unattended.


Structure of the Book

The volume begins with a chapter by Nguyen Thi Lan Anh, who gives a broad overview of what makes the South China Sea dispute extremely problematic and difficult to resolve. She argues that colonisation resulted in an unclear legalistic arrangement, especially with regard to determining the sovereignty of the islands. While she does discuss the legal limitations of the UN Convention on the Law of the Sea (UNCLOS) in this regard, she emphasises how no international judicial body has compulsory jurisdiction to settle a dispute over sovereignty without the consent of states concerned. The geo-strategic and economic importance of the disputed territory is significant enough for there to be great power involvement in supporting different claimant states. In addition, factors such as nationalism and the emergence of strong and effective public opinion influence more aggressive postures amongst claimant states.

In chapter 2, Tsinghua University’s Zhang Xinjun argues that UN rules concerning peaceful settlements of disputes are in-fact compatible with Deng Xiaoping’s policy of setting aside sovereignty and pursuing joint development. He argues that UNCLOS does not apply to most sovereignty-related disputes in the South China Sea, given that the convention does not provide substantial rules governing the ownership of islands/features. Hence, general international law ought to be consid-ered. The author remains sceptical about Philippines’ arbitration case, on the grounds that it might have a negative impact upon the ASEAN-China track in managing the South China Sea disputes and accelerate competition amongst states that consolidate claims by a stronger physical presence.

National University of Singapore’s Robert Beckman provides a detailed and thorough analysis of the arbitration case. The author discusses the issues, limitations, and implications of the legal claims made by the Philippines. He concludes by stating that even if the tribunal rules that China cannot make claims to maritime space based on history and the nine-dashed line, it will not clarify the areas for joint development. This is because there is no established legal framework as of now to determine which claimant has greater legitimate sovereignty over the islands.

To further discuss the complexities of the dispute, authors Yee Kuang Heng and Walter Lohman discuss ASEAN’s inability to provide durable and lasting solutions to the issue in chapters 4 and 5 respec-tively. The disparity amongst members is one such reason, given that each Southeast Asian country is willing to sacrifice regional interests for national ones. Since the end of the Cold War, most countries favoured


a dual Sino-American regional presence. While most Southeast Asian countries are wary of Chinese aggression, they are careful not to take very overt anti-China positions at the cost of damaging bilateral rela-tions. Both Heng’s and Lohman’s chapters reflect upon how domestic national interests corrode ASEAN solidarity. Taking this point further, Angelo Jimenez and Katherine Tseng discuss the domestic politics in Philippines and Taiwan respectively, and how this influences their posi-tions in relation to the South China Sea disputes.

While both the legal papers in this volume may differ in terms of argu-ment, they converge over the fact that political solutions are required to help resolve issues, given the fact that there are many factors that the tribunal cannot resolve by itself. Patrick Cronin and Yang Fang discuss strategies for the eventual resolution of the dispute. Yang Fang concludes that a solution is not feasible in the immediate future; however, there should be greater emphasis on crisis management. Cronin looks at how the issue can be eased in the context of increased Sino-US cooperation and multilateral forums.

Management: An Essential Step towards Solutions

The complexity and seeming impasse over the South China Sea disputes have become an essential source of instability and even conflict in the region, involving not only the claimant countries but also the other global powers like the United States. This volume, which resulted from presentations at a conference sponsored jointly by the Centre on Asia and Globalisation (CAG) and Asia Society in New York in March 2013, is not aimed at providing any solution to this thorny issue. Instead, our goal is to provide in-depth discussions and contemporary analysis of the complexities of the disputes in the South China Sea. The authors in this volume are experts in specific issue areas (international law, strategic analysis, historic studies, and international relations) of the South China Sea disputes and originate from countries that are directly involved in these affairs or from countries with the capacity to further influence the claimant countries so as to change the status quo. Essentially, the authors of various chapters offer their own individual viewpoints over the South China Sea issue. Hence, the editors, and their associated insti-tutions have no specific disposition as to which viewpoint might be deemed accurate and/or appropriate. Essentially, the volume makes four key assertions:


While international law can provide legitimate guidance to the 1. management of the South China Sea disputes and the tension arising from these disputes, it cannot by itself form a framework for solutions.Although the rise of China presents certain opportunities for the 2. region, it has also caused serious challenges to peace and stability, especially in the South China Sea; and this is further complicated by the US rebalancing policy.Domestic politics in the claimant countries make compromises 3. needed for solutions increasingly difficult, if not entirely impossible, in the foreseeable future.Given the apparent impasse and lingering tensions in the region, a 4. critical, and indeed the most feasible, step is to work out a mechanism to manage the disputes so that the tensions will not escalate into conflict. This would mean a stable, communicative, and consultative US-China relationship with respect to the South China Sea issue and, more importantly, proactive negotiations between China and ASEAN on a code of conduct (COC), which provides a formal management mechanism.

It is hoped that this volume will make a significant contribution to the existing literature and analyses on the South China Sea disputes. Given the rapidly developing nature of the issue, the concluding chapter of the volume provides the most updated account of the issue at the time of writing. The way these constantly escalating tensions are managed between key stakeholders will be an essential determinant of regional peace and security for years to come.

References

Chao, Z. (1987). On the Ban of Maritime Trade of the Ming Dynasty. Journal of Shandong University, 2, 120–127.

EIA (Energy Information Administration). (7 February, 2013). South China Sea. Retrieved 5 March 2014, from Analysis Briefs: http://www.eia.gov/countries/regions-topics.cfm?fips=SCS.

Elleman, B. A. (2011). China’s 1974 Naval Expedition to the Paracel Islands. In B. A. Paine (ed.), Naval Power and Expeditionary Wars: Peripheral Campaigns and New Theatres of Naval Warfare (pp. 141–150). Oxon: Routledge.

FAO (Food and Agriculture Organisation). (n.d.). Women in Agriculture, Environment and Rural Production. Retrieved February 2014, from Food and Agriculture Organisation: ftp://ftp.fao.org/docrep/fao/008/ae946e/ae946e00.pdf.


Franckx, E., & Benatar, M. (2011). Dotted Lines in the South China Sea: Fishing for (Legal) Clarity. In T. T. Thuy (ed.), The South China Sea: Towards a Region of Peace, Security and Cooperation (pp. 210–232). Hanoi: The Gioi Publishers.

Gallardo, S. M., & Baviera, A. S. (2012). Filipino Media and Public Opinion on the Philippines – China Disputes in the South China Sea: A Preliminary Analysis. Paper presented at the 4th International Workshop on “The South China Sea: Cooperation for Regional Security and Development,” organized by the Diplomatic Academy of the Vietnam and the Vietnam Lawyers’ Association, 18–21 November.

Gregor, A. J. (1989). In the Shadow of Giants: The Major Powers and the Security of Southeast Asia. Stanford, CA: Hoover Institution Press.

ICG (International Crisis Group). (2012). Stirring up the South China Sea (I). Beijing/Brussels: International Crisis Group.

Joyner, C. C. (1999). The Spratly Islands Dispute in the South China Sea:Problems, Policies, and Prospects for Diplomatic. In R. K. Singh (ed.), Investigating Confidence-Building Measures in the Asia-Pacific Region (pp. 53–108). Washington, DC: Stimson Center.

Lucio Blanco Pitlo III. (24 July 2013). Fishing Wars: Competition for South China Sea’s Resources. Retrieved 25 February, 2014, from Pacific Forum CSIS, Honolulu, Hawaii: https://csis.org/files/publication/Pac1357.pdf.

Ministry of Fisheries and the World Bank. (16 February 2005). Vietnam: Fisheries and Aquaculture Sector Study – Final Report. Retrieved 25 February 2014, from World Bank: Openk Knowledge Repository: https://openknowledge.world-bank.org/bitstream/handle/10986/8533/316950VN0white11official0use0only10.pdf?sequence=1.

Patalano, A. (2013). Sea Power, Maritime Disputes, and the Evolving Security of the East and South China Seas. The RUSI Journal, 158(6), 48–57.

Storey, I., & Schofield, C. (November 2009). The South China Sea Dispute: Rising Tensions, Increasing Stakes. Retrieved 25 February 2014, from Academia.edu: https://www.academia.edu/2062121/The_South_China_Sea_Dispute_Rising_Tensions_Increasing_Stakes.

Thang, N.-D., & Tao, N. H. (2012). China’s Nine-Dotted Lines in the South China Sea: The 2011 Exchange of Diplomatic Notes. Ocean Development & International Law, 43(1), 35–56.

Till, G. (2008). The South China Sea dispute: An International History. In R. E. Sam Bateman (ed.), Security and International Politics in the South China Sea: Towards a Co-Operative Management Regime (pp. 26–41). Oxon: Routledge.

Till, G. (2013). Seapower: A Guide for the Twenty-First Century. Oxon: Routledge.Tonnesson, S. (2002). The History of the Dispute . In T. Kivimäki (ed.), War Or

Peace in the South China Sea? (pp. 6–23). Copenhagen: NAIS Press.Xinhua. (21 June 2013). China, Vietnam Ink Agreement on Fishery Hotline.

Retrieved 25 February 2014, from Xinhua: http://news.xinhuanet.com/english/china/2013–06/21/c_132475771.htm.

Yahuda, M. (2012). China’s Recent Relations with Maritime Neighbours. The International Spectator: Italian Journal of International Affairs, 47(2), 30–44.

Part I

Origins

15

As with most territorial disputes, the ones that emanate from the South China Sea are extremely complex and multi-layered. The contested status of the territorial features in the sea are rooted in the region’s deep colonial history on one hand, and the legal regime of islands in accord-ance with international law on the other. The geostrategic importance of these features and the presence of rich natural resources around them have culminated in uneasy tensions in the South China Sea region between multiple states that claim sovereignty over the features. This has been fuelled by domestic politics and the rise of nationalism within certain claimant states. This chapter aims at providing an overview of the various layers that have contributed to the current complexity of the South China Sea dispute. It also highlights the challenges preventing the parties from reaching a resolution of the dispute in the near future. To arrive at this, it will first discuss the early history of the region in the colonial period. It then examines the influence of different factors, such as international law, economics, the geo-strategic significance of features, and the domestic situations in claimant states that trigger the South China Sea dispute.

Colonisation: Early Beginnings of the Dispute

Before the presence of colonies in the region, the Persians, Arabs, Indians, Chinese, and the people of Southeast Asia used various sea routes in the South China Sea for trade. The islands and territorial features – which are the subject of the disputes as they exist today, existed as points on trading networks, or as navigational markers. The colonial footprint over the region emerged as early as the sixteenth century. The United Kingdom, France, Netherlands, and Spain entered the South China

1Origins of the South China Sea DisputeNguyen Thi Lan Anh

16 Nguyen Thi Lan Anh

Sea with the aim of establishing trading stations and natural resource suppliers in the region. They divided the littoral territories of the South China Sea into their respective spheres of influence, namely, Malaya, the northern Borneo colonies, and Hong Kong (the United Kingdom), Indo-China (France), East Indies (the Netherlands), and the Philippines (Spain). The Portuguese maintained a short colonial presence in the East Indies before its occupation by the Netherlands. Similarly, the Americans followed the Spanish in occupying the Philippines. Additionally, the region witnessed the rise of Japan and its southeastwardly expansion to China, Vietnam, and some features in the South China Sea.

As an ocean that connects all littoral territories of Southeast Asia, the South China Sea has been used for centuries due to its vital location. Western colonialism established empires in Southeast Asia due to the maritime routes in the South China Sea. Several archipelagos in the South China Sea were marked and named on world maps by Western adven-turers and colonisers. For instance, the name “Amphitrite,” given to a

Figure 1.1 Territories colonised in Southeast Asia.

Source: Hunt, Martin, Rosenwein, Hsia, and Smith, 2005.

Origins of the South China Sea Dispute 17

group of territorial features in the Paracels, stems from the shipwreck of the Amphitrite under the reign of King Louis XIV in 1698, when it was on its way to China from France (Madrolle, 1939).1 The Spratly islands received their name from British seafarers in 1762. In 1821, the British Admiralty published charts for the South China Sea (Hancox & Prescott, 1995; Odgaard, 2002, p. 64). In 1864, the British Royal Navy ship, HMS Rifle, reportedly came across a few islands situated in the South China Sea. The islands received their name from the captain who carried out the discovery, Richard Spratly.

The Paracels and Spratlys are two groups of islands occupying vast areas in the middle of the South China Sea. The Paracels contains the groups of Amphitrite and Crescent and some other adjacent islands and features. It covers an area of 305 square kilometres. The shortest distances from the Paracels to the Hainan Island of China and the Ly Son Island of Vietnam are approximately 140 nautical miles and 123 nautical miles respectively. The Spratlys even covers a much larger area of 160 square kilometres. The shortest distances from littoral states to the centre of the Spratlys is measured as about 200 nautical miles from the Brooke’s Point of the Philippines, 330 nautical miles from the Southern coast of Vietnam, 247 nautical miles off the coast of Malaysia, 405 nautical miles from southern islands in the Paracels archipelago, 540 nautical miles from the Hainan Island of China, and 860 nautical miles from Taiwan.2

Before and during the early stages of the colonial period, the Paracels and Spratlys appeared in the world navigation maps as dangerous grounds in busy navigation routes of the South China Sea. However, their mere presence in these maps sowed the seeds for sovereignty disputes for a long time to come.

In 1877, the British colony of Labuan, an island to the North of Borneo, issued a license for a group of businessmen to plant the British flag on the Spratly Island and use them for commercial purposes. The group’s search for guano stopped after a killing incident, hence no flag was planted (Catley & Keliat, 1997, p. 6).3

In 1927, the French began occupying the islands when they carried out patrol trips in the South China Sea to combat smuggling and conduct scien-tific surveys of the Paracels and Spratlys islands.4 In April 1930, during the second expedition to the Paracels and Spratlys by the ship La Malicieuse, France declared its formal possession of the Paracels and Spratlys by hoisting a French flag on the highest point of an island called Ile de la Tempete (Monique, 1996, p. 44: note 4). On 26 July, 1933, France formally declared its sovereignty over the Paracels and Spratlys and took physical possession of the archipelagos. It was noteworthy that the declaration clearly stated


the name of some features in the Spratlys (as they exist today), such as the Spratly Island, Amboyna Cay, Itu Aba Island, Sin Cowe Island, Loaita Reefs, Thitu Island, and Northeast and Southeast Cays as well as all adjacent reefs and shoals (JROF, 1933, p. 7837).5 The declaration was also followed by marking a stone pillar on which was written “République Francaise – Royaume d’Annam – Archipel des Paracels 1816 – Ile de Pattle – 1938” (Republic of France – Royal of Annam – Paracels Archipelago 1816 – Pattle Island) (Monique, 1996, p. 46: note 4).6

The first to protest against the French sovereignty declaration of 1933 was Japan, on the grounds that the archipelago had been mined for years by various Japanese phosphate companies (Catley and Keliat, 1997, p. 25, note: 5). Japan’s interest in the South China Sea region began in the early twentieth century after it occupied Taiwan in 1895 and the Pratas Island in 1907 (Samuels, 1982, p. 63: note 6). Ho Ji Nien who was granted the exploi-tation rights by the Guangtung Province authority to exploit phosphate in the Paracels was actually backed by Japanese phosphate companies based in Taiwan. During the late 1920s and early 1930s, Japanese phosphate compa-nies also began operating in the Spratlys (Samuels 1982, p. 63: note 6). While Japanese engagement in the archipelagos was limited to economic interests, it did not make any sovereignty claim until it protested against French claims and occupied the Paracels and Spratlys by force in 1939. During the Second World War, Japan maintained its occupation and placed the two archipel-agos under the jurisdiction of the Governor General of Taiwan through the Kao-hsiung District (Samuels 1982, p. 63: note 6).

Despite the fact that the validity of each acquisition activity may be chal-lenged, the discoveries and occupations during the colonial period have been used by claimants to justify sovereignty over the Paracels and Spratlys, even now. Taiwan’s claim is partly based on the occupation of Japan. Similarly, Vietnam’s claims are derived from the succession of the sovereignty declara-tion and occupation of France. After gaining independence in 1984, Brunei inherited a continental shelf partially delimited by the United Kingdom, based on which it already protested against the Malaysian claim to the Louisa Reef on its 1979 map.7

The Second World War ended with the cease of occupation by Japan and France in the Paracels and Spratlys, still leaving the fate of the archipelagos unclear. There were four international documents, namely the San Francisco Treaty, The Cairo Declaration, The Potsdam Declaration, and the Joint Communiqué between the People’s Republic of China (PRC) and Japan. The Cairo Declaration of 27 November 1943, was issued by the United Kingdom, United States, and Chiang Kai-Shek’s Nationalist China. The Potsdam Declaration of 26 July 1945 and the Joint Communiqué of 29 September


1972 between the People’s Republic of China and Japan addressed the issue of territories occupied during the Second World War by Japan. Nevertheless, none of these gave an explicit or decisive answer to the question of the sovereignty of the Paracels and Spratlys.

In the Treaty of Peace with Japan (also known as the San Francisco Treaty), Japan declared that it “renounces all right, title and claim to the Spratlys Islands and the Paracels Islands.”8 It did not however explicitly determine the status of the sovereignty of the Paracels and Spratlys after the Japanese renouncement.

The Cairo Declaration stated that it was the purpose of the Allied Powers to strip Japan of “all the islands in the Pacific which she seized or occupied since the beginning of the First World War in 1914, and that all the territo-ries that Japan had stolen from the Chinese, such as Manchuria, Formosa and the Pescadores, shall be restored to the Republic of China” (Cario Declaration, 1943). This Declaration excluded the Paracels and Spratlys from the “stolen territories to be restored to China” (the Manchuria, Formosa and the Pescadores). It still did not, however, clarify the sovereignty status of the Paracels and Spratlys.

The Potsdam Declaration stated that, “the terms of the Cairo Declaration shall be carried out and Japanese sovereignty shall be limited to the islands of Honshu, Hokkaido, Kyushsu, Shikoku and such minor islands as we determine” (Potsdam Declaration, 1945, para: 8).

The relevant contents of the Cairo Declaration and Potsdam Declaration were again transferred and reaffirmed in the Joint Communiqué between China and Japan. Point 3 in the Joint Communiqué provided that, “the Government of the People’s Republic of China reiterates that Taiwan is an inalienable part of the territory of the People’s Republic of China. The Government of Japan fully understands and respects this stand of the Government of the People’s Republic of China, and it firmly maintains its stand under Article 8 of the Potsdam Proclamation” (JMFA, 1972).

The lack of clarity regarding the sovereignty of the islands in these legal documents paved the way for different and conflicting interpre-tations (Valero, 1994). China and Taiwan assimilated the Paracels and Spratlys with those given to them under the Cairo Declaration. Vietnam based its claims on the French occupation and declaration. Moreover, they reaffirmed their claims since the Cairo Declaration excluded the Paracels and Spratlys as stolen territory by the Japanese from China. Since the end of the Second World War, given the lack of clarity in the status of the two island groups, the Philippines regarded them as terra nullius, or belonging to no one, thus giving other countries the freedom to make claims.


Development of International Law

Given the complicated and murky history of the sovereignty of the Paracels and/or Spratlys, some claimants have, independently or through their colonial masters, made various attempts to assert their sovereignty over them. Arguably, the significance and legal validity of these attempts can only be concluded by application of international law. There are three sets of international law governing the South China Sea dispute. These include the Law concerning Territorial Acquisition, the Law of the Sea and the Law on Dispute Settlement. This section analyses the extent to which the application of international law can help claimants resolve territorial disputes in the South China Sea region. It also discusses whether international law itself, due to its ambiguity or imperfectness, has exacerbated the dispute. In other words, it questions the extent to which International Law is the root and solution of the highly multi-layered issue.

The first set of rules that could be applied to the dispute is the law concerning territorial acquisition. Having originated from the West, the law has been crystallised under customary international law. Under this, a title to territory can be obtained through five modes: occupation, prescription, cession, conquest and accession (Brownlie, 2003, p. 123; Shaw, 2003, p. 409; Malanczuk, 1997, p. 147; Jennings & Watts, 1992).9 If a territory is considered terra nullius, it is open to acquisition through legal process of occupation.10 This process begins with its discovery, which creates an initial title, inchoate title. This is followed by an actual and durable taking of possession within a reasonable time, that is, the continuous and peaceful display of territorial sovereignty, effectivités, to obtain a full title.11 In a slightly different mode, prescription “is a portmanteau concept that comprehends both a possession of which the origin is unclear or disputed and an adverse possession which is in origin demonstrably unlawful” (Jennings, 1963, p. 23). If a state is successful in establishing a title but after that, fails to maintain a reason-able level of state activity, that is, abandonment, the state may lose the title.12 Other states may establish their title by occupation. Again, the occupation under prescription only leads to lawful title if it is supported by effectivités. In the two modes of occupation and prescription, effec-tivités are of central importance for the purpose of both the acquisition and maintenance of title (Schwarzenberger, 1957). Occupation and prescription must be conducted on behalf of a state, not on individual capacity. Regarding sovereignty claims, acts of individuals by themselves are no substitution for the display of state authority. Unless authorised


in advance or subsequently ratified, the activities of individuals can be neither attributed nor imputed to the state whose nationals they are.13

Since these rules have Western origins, it can be argued that littoral states did not have sufficient knowledge and their claims were not made in full accordance with international law concerning acquisition. The law concerning territorial acquisition was also applied inconsistently to inter-pret the claims during the colonial period resulting in the current state of multiple conflicting claims over sovereignty of the Paracels and the Spratlys. For instance, China based its claim on the activities of Chinese fishermen, not the activities of Chinese state. Vietnam uses early exploita-tion activities of the Vietnamese kings as evidence of their sovereignty over the islands. They had established the Hoang Sa and Bac Hai companies on the islands and their King Gia Long visited the Paracels in 1816, where, he declared the possession of the archipelago by an official ceremony and hoisted the Vietnamese flag (Jean-Louis, 1837). Unfortunately, these activi-ties were not followed by an official declaration to the world, which is a requirement for the full acquisition under international law.

The second set of rules concerning the South China Sea dispute was the law of the sea, codified in customary international law and three conferences on the law of the sea led by the United Nations. Accordingly, the role of islands was emphasised. Islands are not only subjects for terri-torial claims, but also eligible to generate maritime zones equal to main-land for the owner states. In general, seabed elevations are classified into three legal groups: islands, low tide elevations, and submerged features, which are always under the water even at low tide. Of the three groups, islands are the most important as they allow states to generate title and entitlement to certain maritime zones. The maritime zones of islands depend on a further distinction, in which, due to human habitation and economic life, some islands are only entitled to a territorial sea and contiguous zone, whereas others are enabled to generate all maritime zones including territorial seas, contiguous zones, exclusive economic zones, and continental shelves (UNCLOS, 1982).14

The importance given to islands under the law of the sea, provided incentives for new claimants to assert sovereignty over territorial features in the South China Sea since the 1970s. This began with the changing position of the Philippines in 1971, followed by Malaysia and Brunei in 1979 and 1984. The controversy of the legal regime of islands in the international law of the sea had vague and imprecise wording, with no quantitative criteria to assert the two conditions of “sustaining human habitation” or “economic life.”15 This further complicated the dispute. Despite the tiny size and the inhabitable conditions of


the features in the Spratlys, China has lodged its claim to the United Nations to generate exclusive economic zone and continental shelf for the Spratlys,16 resulting in potential significant overlapping claims with maritime zones of littoral states from their boundaries.

The third set of rules concerning the South China Sea dispute is the law on dispute settlement. As far as the question of sovereignty is concerned, no international judicial body has compulsory jurisdiction to settle a dispute without the consent of the states concerned. This rule helps a country easily block the settlement of a dispute by not accepting the jurisdiction of a judicial body. At present, China still insists on settling the dispute over the Spratlys through bilateral consultation and negotiation with the countries directly concerned.17 In addition, as members of the United Nations Convention on the Law of the Sea, the parties to the dispute are bound by the dispute settlement mechanism stipulated under Part XV of the Convention. However, the very nature of the South China Sea dispute, issues related to sovereignty, maritime delimitation and historic title, falls within the optional exception to the applicability of Part XV. This means a member state can opt out certain type of disputes from compulsory dispute settlement of the Convention.18 Accordingly, China has made its declara-tion in 2006 that it “does not accept any of the procedures provided for in Section 2 of Part XV of the Convention with respect to all the categories of disputes referred to in paragraph 1 (a) (b) and (c) of Article 298 of the Convention.”19 This includes all disputes concerning sovereignty, mari-time delimitation, historic titles, and so on. Given China’s declaration, the sovereignty, maritime delimitation, and historic title aspects of the South China Sea dispute are not subjected to the compulsory dispute settlement of the Convention, making it very difficult to find a definite solution for the South China Sea dispute by a judicial measure. Furthermore, if a judge-ment or an award were given for the South China Sea dispute, the lack of an enforcement body in the international legal system means that there is no guarantee that judgement will be implemented. This is particularly true if the judgement or award goes against the interests of a big power.20 The absence of a binding dispute settlement mechanism and the arbitrary interpretation and application of international law have made the South China Sea dispute become even more complicated, and a definite solution is still far from being reached.

Economic Factors

Most of the claimant states are indeed dynamic economies of the world. Due to this, the potential presence of rich natural resources available in


the South China Sea acts as a major contributing factor to the complexity of the dispute.

Among the several natural resources, hydrocarbons are always the most attractive as countries within the region have the highest rate of hydrocarbon-resource consumption in the world. It is estimated that the rate of its consumption in the region can reach 30% by 2035, and China is expected to account for 43% of this increase (EIA, 2013). Furthermore, the South China Sea is estimated to possess a large quantity of oil and gas reserves. It is important to note, however, that the estimation is not based on any solid proof through exploration because of the sensitivities of the issue involving sovereignty and territorial disputes. In November 2012, the Chinese National Offshore Oil Company (CNOOC) estimated that the South China Sea has 125 billion barrels of oil and 500 trillion cubic feet of natural gas in undiscovered resources. In a recent report at the time of writing, the Energy Information Administration estimated that the South China Sea contains approximately 11 billion barrels of oil and 190 trillion cubic feet of natural gas in proven reserves. Particularly, the Spratlys may contain significant deposits of undiscovered hydro-carbon resources of up to 2.5 billion barrels of oil and 25.5 trillion cubic feet of natural gas in undiscovered resources (EIA, 2013).

In addition to potential oil and gas reserves, the South China Sea is also one of the richest fishing grounds in the world, with many varie-ties of fish such as round scads, sardines, big-eye scads, mackerel, and tuna. It ranks fourth on the list of the world’s richest world fishing zones (Kivimaki, 2002, p. 44). Fishing capacity is estimated at 7.5 tonnes per square kilometre per year in the waters around the Spratlys alone (Dupont, 1998, p. 53). Annually, the South China Sea states produce over 8 million metric tonnes in terms of live weight of marine fish, accounting for 10%of the total world catch and 23%of that of Asia, making it vital for the fishing industries of regional countries (Dupont, 1998, p. 53).

The massive expansion of China’s fishing industry is attributed to its rapid development in the past 20 years. In 1990, the fishery export revenue of China reached around US$ 1.6 billion and in 2009, the revenue was increased by about six times to over US$ 10 billion. Statistics in 2009 showed that China ranked sixth amongst the world’s fishery importers, with the total import revenue amounting to US$ 4.9 billion. Taiwan is also a major player in world fisheries with a fishery export revenue of US$ 1.6 billion in 2009 (FAO, 2011). In other Southeast Asian countries like Vietnam, Malaysia, and the Philippines, the livelihood of many people heavily depends on their work in the fishing industry in


the South China Sea region. In 2009, Vietnam ranked the fourth among world fishery exporters with the fishery export revenue of US$ 4.3 billion. Malaysia and the Philippines also possess considerable fishing industries worth US$ 665 million and US$ 569 of million fishery export revenue respectively, from capture and aquaculture in 2009 (FAO, 2011). Fish from these waters also provide about 25% of the protein necessary for the 500 million people of the surrounding littoral states (Snyder, Glosserman, and Cossa, 2001, p. 5). Therefore, ensuring the access and control of maritime space in the South China Sea also serves the purpose of human security and economic development.

Besides natural resources, the South China Sea and its several archi-pelagos offer a promising opportunity for developing tourism. Malaysia has been successfully operating a diving resource in the Swallow Reef and China also plans to develop its tourism industry in the Paracels. Vietnam has also sent a tourist group to the Spratlys.

Furthermore, the waters provide a popular navigation route for goods and cargo transportation by sea. The South China Sea has five straits that act as five gates for vessels coming in and out of the area: the Malacca Strait at the southwest, the Sunda and Lombok-Macassar Straits at the southeast, and the Luzon and Taiwan Straits at the north-east. Travelling from or to the Indian Ocean in the southwest, vessels can pass through the Malacca Strait, follow the sea between Vietnam and the Spratlys, and exit through the Luzon or Taiwan Straits to arrive in the East China Sea or continue to the Pacific Ocean. This is the most popular sea route, which makes the Malacca Strait the second busiest in the world after the English Channel (Kivimaki, 2002, p. 57: note 37). Vessels travelling to and from Africa also frequently pass through the Sunda and Lombok-Macassar Straits into the region; these entrances are primarily used by Australian North-South trade (Kivimaki, 2002, p. 57: note 37). Annually, more than 50% of the world’s merchant fleet tonnage which has approximately a third of global crude oil and over half of the global liquefied natural gas, passes through the three straits of the South China Sea, namely the Malacca, Sunda, and Lombok (EIA, 2013).

The economic value of the South China Sea has made it a major cause for conflict among claimant states. The unsettled dispute over the sovereignty of the territorial features and their waters have made the claimant states resort to assertive means to exploit resources and control the maritime spaces as much as possible. Recently, incidents involving clashes with fishing vessels have been on the rise, worsening regional tensions.

Figure 1.2 Shipping lanes in Southeast Asia.

Source: Beckman, 2005.


Geo-Strategic Importance of the South China Sea

The presence of rich natural resources in the South China Sea has inten-sified issues amongst claimant states in the region. That said, the most visible and direct economic benefits to date only come from fishing. Hydrocarbon resources remain estimations. Even if the estimations were true, the requirement of a deep water drilling technique will increase the cost for exploiting such resources and make the South China Sea lose its attractiveness in comparison to other hydrocarbon resource suppliers from the Middle East and Africa. That is to say, economic benefit may not be the sole attraction that the South China Sea may bring to the parties. It is the geostrategic importance that is usually the main reason for the parties to strengthen their claim over the Spratlys and the Paracels. The South China Sea is the gateway to access to the world ocean, the nexus for navigation as well as a security fence for several littoral states. As maritime security such as safety and freedom of navigation are not only the interests of littoral states, but also those of other sea users which sometimes lead to their competition to secure those interests.

First, the South China Sea provides a vast ocean of access for countries in the region. China is world’s fourth largest land territory, but has a strategic disadvantage in terms of limited maritime space. It is China’s gateway to the world. China’s desire to push through the first island chain stems from the view that21 it has the same effect of “containing” China. For other Southeast Asian littoral states, the South China Sea is a common asset that naturally connects them in a semi-enclosed sea where they share both the prosperity that the sea may bring.

It is also the strategic supply route to most economies in the region and its sea-lanes of communication provide vital security for many countries. As one of the largest crude oil and gas importers in the world, this is essential for securing China’s energy security, especially for the transportation of oil and gas resources. The United States’ Energy Information Administration estimated that in 2011, 4.5 million barrels of crude oil and 0.6 trillion cubic feet of liquefied natural gas were trans-ported through the South China Sea to China per day. This number tends to grow as China develops rapidly.

For some Southeast Asian littoral states, the South China Sea also has a significant role to play in terms of security. Historically, it has played this role when littoral nations faced direct military threats during the colonial era and the Cold War. For Vietnam, Malaysia, and Brunei, the South China Sea is the only sea that abuts their long coastlines. Vietnam faced a series of these threats throughout its history since 1856, when


it was attacked on its Da Nang coast by France and air stroked by the United States as a result of the Gulf of Tokin incident in 1964. Malaya (now Malaysia and Brunei) was also conquered by Japan during the Second World War from the South China Sea. This gave rise to the stra-tegic importance of the Spratlys in the security policies of the littoral states.22

The United States has an interest in protecting the open and stable maritime commons of the South China Sea because of its essential role in international trade and prosperity (ICG, 2012, p. 1). The United States Maritime Strategy issued in 2007 declared that “the maritime domain ... carries the lifeblood of a global system that links every country on earth” (US Navy, 2007). The paper then stated that the United States “will not permit conditions under which [their] maritime forces will be impeded from freedom of manoeuvre and freedom of access ... nor permit an adversary to disrupt the global supply chain by attempting to block vital sea-lines of communication and commerce” (US Navy, 2007). Hence, the secretary of state, Hilary Clinton, had insisted that the United States has a national interest in the freedom of navigation (Clinton, 2010). This policy is also reiterated in the Senate Resolution No. S.Res.524 dated on 2 August 2012, on the South China Sea (US Government, 2012).

Most importantly, the South China Sea is under the sphere of competing influence between China and the United States. On the one hand, there are growing tensions between a rising China, poised to exer-cise greater influence in the region, and on the other hand, the United States, as the “status quo power,” is determined to preserve its presence in a region of growing strategic salience (Yuan, 2012). China believes that the South China Sea is its historical area of influence over which it enjoys sovereignty. Control over the South China Sea would enable it to monitor ship movements, especially naval reconnaissance craft. As the Spratlys are located in the middle of the sea, they offer an ideal site for monitoring the South China Sea waters to prevent them from launching “leap-frog” attacks from the Spratly features to the Mainland. The waters also provide China with a large area to exercise its naval forces to demonstrate its power and to operate its strategic attack subma-rines that could pose a credible nuclear threat or deterrent against the United States, according to a rear admiral and former commander of the Japanese Maritime Self-Defence anti-submarine air wing (Yoshida, 2012). This forms a complex dynamic, given the Obama administra-tion’s “rebalancing” strategy towards Asia-Pacific. The United States places high emphasis on the maritime domain, particularly the South


China Sea, aimed at managing China’s rise and to ensure that it remains peaceful and within the established order in the international system. China perceives this as an attempt by the United States to meddle in regional “internal affairs” and to rally neighbouring countries into its anti-China alliance. China holds the view that the United States’ mili-tary activities in its exclusive economic zone, along with its surveillance and intelligence gathering in the South China Sea, is a serious threat to its national security. Furthermore, the United States has an interest in protecting its allies in the region, namely, the Philippines, Japan, and South Korea. As a claimant of the disputed islands in the South China Sea, Philippines has recently been experiencing Chinese assert-iveness in the region. While Japan and South Korea also face territorial disputes with China in the East China Sea, their interests are at stake with tensions in the South China Sea, since the majority of oil and gas importation is transported through its waters.

In recent years, the dynamic and military competition observed in the arms sector of the region threatens to militarise the South China Sea dispute. Littoral states have also began to exercise their military and paramilitary activities, leading to growing military expenditure, driving up nationalism, and increasing chances of incidents at sea.

The geo-strategic significance of the South China Sea has transformed the disputes in the South China Sea from a regional to an international dispute. It has gradually become a strategic chessboard for great power presence and involvement.

Domestic Factors

In many ways, the South China Sea dispute is not one between states, but within each state itself. Within each claimant state, the election cycles and the subsequent leadership change may result in more deci-sive and hard-line policies towards territorial competition, such as is seen in the South China Sea. The competition between different agen-cies and actors in order to obtain greater power and budgets results in a degeneration of the scenario in the South China Sea. Public opinion or nationalism can act as a major barrier for any form of concession towards the South China Sea dispute.

In recent years, a wave of nationalism has swept over claimant coun-tries, making the dispute a key issue in the public opinion. In China, there was a strong resurgence of the Middle Kingdom mentality, known as “Tianxia,” based on a book authored by Zhao Tingyang titled “The Tianxia System: A Philosophy for the World Institution” in 2005. The


book received widespread public appreciation. Under the “tianxia” worldview, the Chinese believed that no dispute exists between China and littoral states in the South China Sea because Southeast Asian states were traditionally vassals of China. The South China Sea was long within the sphere of influence of China where it has “historical rights” and “sovereignty.” As “tianxia” – which means the world at large – belongs to the Chinese emperor who established his own rules for the way the world was run. Accordingly, China finds it unnecessary to be bound to follow the contemporary international law of the sea, which was established much after China established its historic rights in the South China Sea.23 There are loud voices in the Chinese public opinion that echoed this worldview and have driven the government to teach Southeast Asian states a lesson for stealing Chinese natural resources in the South China Sea. In a technology-driven era, the internet and mass media play an important role in shaping and influencing public opinion. For instance, the Global Times and the electronic version of the Chinese People’s Daily, usually carries this hawkish and hard-line stance on the South China Sea.

In both Vietnam and the Philippines, public opinion over the disputes has also skyrocketed. Anti-China rallies broke out in Vietnam and the Philippines following some assertive activities of China in the South China Sea in 2011, particularly when a group of Chinese law enforce-ment boats harassed the Binh Minh seismic surveillance vessels . Another incident occurred in 2012 when China opened the bidding for nine oil blocks deep within Vietnam’s continental shelf. It was the first time in Vietnam that the National Assembly had a hearing session on the terri-tory and maritime boundary of the South China Sea. The prime minister of Vietnam, Nguyen Tan Dung, even discussed the government’s poli-cies and measures to protect its maritime interests with the National Assembly, which were broadcasted live on TV. The Filipino president also frequently appeared in public to affirm its hard-line stance on the South China Sea, particularly after the Scarborough incident in 2012, when China blocked the access of Filipino fishermen to their traditional fishing grounds in the Scarborough shoal, which also lies within the Philippines’ Exclusive Economic Zone.

The change of national leadership in several littoral countries in recent years, most notably China, Philippines, Taiwan, and Vietnam has strongly influenced these countries’ policies on the South China Sea. Chinese leaders, for example, toughen their stance on territorial issues, as doing otherwise would be seen as sign of weakness and invite their political competitors’ criticisms ahead of the critical ten-year leadership


change. It is believed that the Scarborough incidents and other tensions in the South China Sea in 2012 served to divert public attention and anger from a most severe political and corruption scandal involving Bo Xilai, the highest ranking Communist Party official to date to be charged with corruption, in order to calm the public, ahead of the eighteenth Party Congress. The South China Sea was also embroiled in domestic politics of the Philippines. The policies of the Philippines under the leadership of President Aquino differed sharply to those under the President Arroyo, as “change” was Aquino’s motto for rallying support. In the process of changing leadership, many candidates also used the South China Sea as their campaign strategy for obtaining public support. For instance, President Abe of Japan pursued a hard-line policy towards territorial and maritime disputes and provided great support to the Philippines in the South China Sea. In another assessment, the recent litigation action of the Philippines against China at the tribunal also rallied great public support under President Aquino. It is even more dangerous that the South China Sea dispute was used to distract public opinion from some domestic problems to gather national unity.

In each claimant state, there is a proliferation of national actors that implement their own policies in the South China Sea. These include the military, law enforcement agencies, fishermen, oil companies, the media, and so on. For example, in China alone, there are at least nine to ten active players on the South China Sea, according to the International Crisis Group (2012, note: 49). The participation of several actors in the South China Sea dispute seems to have diluted the authority of the central government in managing the dispute and efficiently coor-dinating activities of the relevant agencies. Moreover, different actors may use the South China Sea dispute as a tool for their own interests. The International Crisis Group report analysed the interests of various Chinese actors in the South China Sea, the so-called dragons, and found that each has its own agenda and motivation to stir-up the South China Sea. The Chinese navy usually makes use of nationalism to support more assertive actions in the South China Sea, and as justification for military modernisation. Various law enforcement agencies are moti-vated by power and budgetary competition, which induce them to take aggressive actions to beg for the central government’s attention and allocation of the budget pie. A number of other agencies (mainly local government) try to expand economic activities in the disputed area with the aims to foster economic growth (ICG, 2012). Most recently, the “search and board” regulation issued by the Hainan authority has raised great concern about sparking naval clashes and damaging the regional


economy. It was interpreted by the Foreign Ministry spokeswoman, Hua Chunying, as local rules formulated by the Hainan provincial govern-ment to strengthen border controls with the aim of tackling crime, maintaining peace at seas, and having the same scope as the 1999 rules (Blanchard, 2012).

Playing with the nationalism card is like using a double-edged sword. Arousing nationalism and public opinion make it harder for leaders of the claimant states to reach a compromise for disputes in the South China Sea.

Conclusion

The South China Sea is one of the biggest semi-enclosed oceans in the world. Its geostrategic location and resources are factors that individu-ally and in combination make the South China Sea of vital strategic interest to littoral states. The development of the International Law of the Sea with the increasing role of islands in generating maritime zones and the loose effect of other sets of rules in territorial acquisition and dispute settlement further provide incentives for new claims, and block definite settlements for the disputes. Historical developments with the presence of various colonisers and the current influence of big powers as well as the sensitive domestic factors in claimant states have increased the complexity of the dispute. These have together made the South China Sea one of the most complicated territorial and maritime disputes in the world and present challenges to any feasible solution in the fore-seeable future.

Notes

1. However, no document was found to prove a connection. 2. Statistics from different sources including Monique (1996) and Cheng-yi

(1997). 3. See Tonnesson (2006). 4. France previously intended to install a lighthouse in the Paracels in 1899

and carry out a scientific survey in this archipelago. This plan was not imple-mented due to the lack of finance. See Monique (1996, p. 44: note 4); Samuels (1982); The 1927 survey was conducted by the crew of the SS De Lanessan. Cf. Kelly (1993).

5. This information was recorded in the Official Journal of the France Republic, 26 July 1933, p. 7837.

6. See also in Lưu Văn Lợi, Cuộc Tranh chấp Việt-Trung về Hai Quần Ðảo Hoàng Sa và Trường Sa, Hà Nội: Nhà xuất bản Công an Nhân dân, 1995, p. 194 (with a picture of the stone pillar).


7. Although the claim of Brunei took place in the 1980s, it shared the same nature as the claim of Malaysia.

8. See Article 2(f) of the treaty. 9. These modes were described in many text books of international law such

as Brownlie (2003), Shaw (2003), Jennings & Watt (1992), and Malanczuk (1997).

10. This definition was clarified in the case of Western Sahara. See Western Sahara, Advisory Opinion, ICJ Reports (1975) para. 79.

11. This requirement was illustrated in interpretation of terminology employed in the special agreement between the Netherlands and the United States in the award of the Island of Palmas case. See RIAA (1928, p. 829).

12. For further information see, Brownlie (2003, p. 138: note 20).13. Separate opinion of Judge Hsu Mo in the Anglo-Norwegian Fisheries case, see

ICJ Reports (1951) para.157.14. See Article 121 UNCLOS (1982).15. For a discussion of the difficulty in interpreting this Article, see Charney

(1999), and Kwiatkowska and Soons (1990, p. 174); E. D Brown commented on the wording of Article 121(3) and stated that, “in its present form, Article 121(3) appears to be perfect recipe for confusion and conflict.” See Brown (1978, p. 206).

16. Notes Verbal of China dated on 14 April 2011. See UN (2011).17. Foreign Ministry spokesman Hong Lei spoke during the press conference

on 31 January 2013 to make the remarks after Chairman of the US House Committee on Foreign Affairs, Ed Royce, met with the Philippines officials and expressed his view that China should agree to face the Philippines before a UN arbitration tribunal to avoid regional turbulence.

18. See Article 298 of UNCLOS (1982).19. Declaration made by China after ratification on 25 August 2006, See DOALOS

(2006).20. For example, the reaction of the United States in the Case concerning mili-

tary and paramilitary activities in and against Nicaragua (Nicaragua v. the United States), (ICJ, 1986).

21 For an example of this view, see Li (2013).22. For example, the monograph of the Philippines Ministry Defense in 1992

remarked that, “It may be recalled that the territory was used by Japan in World War II as a staging area for the conquest of the Philippines, Indonesia, and Malaysia. Kalayann group is therefore considered vital to the national defense and security of the Philippines. Adversarial occupation of these islands by an unfriendly power will constitute a threat to the national secu-rity and territorial integrity of the Philippines” (Catley and Keliat, 1997, p. 98, note: 5). However, these security considerations might have been changed since then. With the development of modern technology, monitoring can be conducted by satellite.

23. For an extensive discussion on the evolution of competing China’s world-view that affect the policies and activities of China in the South China Sea dispute, see Son (2012).


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Part II

Legal Dimensions

39

On 22 January 2012, the Philippines initiated Annex VII Arbitration “with respect to the dispute with China over the maritime jurisdiction of the Philippines in the West Philippine Sea (Philippines term for part of the South China Sea)” (emphasis added) through a written notification accompanied by a statement of claim (hereafter “Notification”) (DFAP, 2013). On 19 February 2013, the spokesperson of the Chinese Foreign Ministry responded to a question from the press, confirming that China has refused to accept the note and its attached notice and returned it to Manila (MFA PRC, 2013).

There are several factors that explain China’s resistance towards settling the dispute through judicial means: remnants of the socialist/communist ideology, status as a developing country, relative newness to the Euro-centric international legal system, and its experience with the West in the past “Century of Humiliation.”1 Despite its position, China is beginning to ease its resistance towards the judicial settlement of international disputes in certain areas. For one, if a dispute arises over the interpretation or application of a treaty with another state party, it agrees to possible resolution of the dispute through judicial process via a “compromissory clause” in that treaty. The clause provides that in such situations, an international court or tribunal may resolve disputes. China’s gradual acceptance of the judicial process has been particu-larly noticed in the field of ocean and sea management. It ratified the 1982 United Nations Convention on the Law of the Sea (UNCLOS) in June 1996, and in doing so accepted a complex dispute-settlement mechanism. The mechanism, in principle, favours an ultimate judicial settlement for disputes concerning interpretation or application of the Convention. It does so, however, with certain limitations and excep-tions, which will be discussed in this chapter. Nevertheless, China has

2“Setting Aside Disputes and Pursuing Joint Development” at Crossroads in South China SeaZhang Xinjun

40 Zhang Xinjun

always maintained a policy of “setting aside disputes and pursuing joint development” with regard to controversies concerning maritime space. Moreover, it has been extremely averse “internationalisation” of South China Sea disputes. This position has not been seriously challenged until the Philippines initiated arbitral proceedings against China on 22 January 2013.

This chapter deconstructs the legal dimensions of the Chinese policy of “setting aside disputes and pursuing joint development” with special reference to the ongoing arbitration initiated by the Philippines and its implication on dispute settlement in connection with the contested features and maritime space in the South China Sea. For this purpose, it is divided into three sections. The first provides a historic overview of China’s “setting aside disputes and pursuing joint development” policy. The next section reviews its implications and implementation in the context of general international law as well as within the UNCLOS dispute settlement mechanism. Essentially, it argues that this policy is in fact compatible with the United Nations’ rules. Lastly, it addresses issues of a preliminary nature arising from Filipino invocation of the arbitration case against China in January 2013. The chapter makes some key observations over the legal positions of both parties. It highlights the limitations in the existing legal framework and complexities of the disputes. The article concludes that arbitration does not provide a long-term and lasting solution to the dispute.

“Setting Aside Disputes and Pursuing Joint Development”

By the end of the 1990s, China had successfully settled most of its land boundary disputes with neighbouring countries (Zhang, 2012, pp. 309–310). In contrast, disputes relating to maritime space in the Yellow Sea, East, and South China Sea, remain uresolved among eight countries,including, Democratic People’s Republic of Korea, Republic of Korea, Japan, Vietnam, Philippines, Malaysia, Indonesia, and Brunei (MFA PRC, 2006). These disputes are labelled “maritime space disputes” in order to distinguish them from other maritime issues in China’s surrounding waters. An example of the latter would be its dispute with the U.S. concerning its military operations within and above China’s Exclusive Economic Zone (EEZ).2

At the risk of oversimplification, China’s maritime space disputes can be roughly categorised into four groups. Type A disputes are territorial disputes over islands and/or insular features in some of these waters. Type B disputes involve issues pertaining to territorial seas, EEZs, and

Setting Aside Disputes 41

continental shelves. Under “the land dominates the sea” principle3 territorial disputes imply that jurisdiction of the surrounding waters is also disputed. Type C disputes are essentially maritime delimitation disputes arising from overlapping EEZs and/or continental shelf claims extending from land territory (disputed or not). Lastly, Type D disputes concern maritime claims based on historical title/right on one hand and EEZ and/or continental shelf- based claims on the other hand (type D disputes exist only in the South China Sea).

China’s first test in handling these kinds of disputes was in 1979, in relation to the Diaoyu/Senkaku Islands in East China Sea. The Chinese government proposed to its Japanese counterpart, through diplomatic channels, that it was willing to jointly develop resources in the waters of the disputed Diaoyu/Senkaku Islands. This was the first time that China formally articulated the policy of “setting aside disputes and pursuing joint development” as its position on the settlement of territorial/mari-time disputes with littoral states (MFA PRC, 2000). The PRC has main-tained this policy consistently since then, not only towards Japan on the East China Sea disputes,4 but also with regards to formulating policy with regard to those that exist in the South China Sea.5 In the Yellow Sea, China and North Korea reached a Joint Development Agreement on 24 December, 2005 – making it the very the first case in which the concept of “setting aside disputes and pursuing joint development” became a reality (MFA PRC, 2006). In the East China Sea, China and Japan reached a “Principled Consensus on the East China Sea Issue” on 18 June 2008.6 The accord, however, was immediately followed by sharp discrepan-cies in the parties’ interpretations of the document. This resulted in the apparent stalling of the process of negotiating further measures required for the implementation of the Consensus (Zhang, 2011).

The Policy in the Context of International Law: UN Law and UNCLOS

China’s 1979 policy of “setting aside disputes and pursuing joint devel-opment” had been formulated before the UNCLOS was adopted in 1982. In terms of legal procedure, this policy deems bilateral negotiation as the primary means of dispute resolution. This section will first review this policy under general international law on peaceful settlement of disputes, bearing mind that China is bound by Article 2(3) and Article 33(1) of the Charter of the United Nations (hereafter the UN Charter).7

Article 2(3) of the UN Charter obliges states to settle their international disputes by peaceful means in a certain manner so that international

42 Zhang Xinjun

peace, security, and justice are not endangered.8 “Setting aside disputes and pursuing joint-development” is intrinsically non-violent. But when this proposal is not accepted by other parties to the disputes, and the continuance of a dispute is likely to endanger international peace and security, does “setting aside disputes” policy appear compatible with the UN rules? This chapter will argue that it does.

Under Article 33(1) of the UN Charter, in an aforementioned situation, the parties to that dispute shall “first of all, seek a solution by negotia-tion, enquiry, mediation, conciliation, arbitration, judicial settlement, resort to regional agencies or arrangements, or other peaceful means of their own choice.” Importantly, it emphasises that the listed procedures, together with “other peaceful means” must be the parties “own choice.” Hence, the option parties choose, depends on mutual consent. In effect, unless parties to a dispute agree in negotiation to enter into other proce-dures, they are not bound by any particular procedure prescribed in Article 33(1), even if this may lead to an impasse.9 Free choice of proce-dures in practice may stay at the level of negotiation only (Nordquist, Nandan, & Rosenne, 2002).

If one party believes that only negotiation may bring about satis-factory solution, while the other may consider that other third party options would do so, Article 33(1) provides no means to resolve this dilemma (Nordquist, Nandan, & Rosenne, 2002). In this case, “setting aside disputes” and simultaneously negotiating for practical measures to prevent a situation from degenerating into one where the maintenance of international peace and security is endangered, is plausible under Article 33(1) of the UN Charter.10

That said, the question that now arises is whether China as a Party State to UNCLOS, can still maintain this policy when the UNCLOS dispute settlement mechanism shall be applied as lex specialis or “law governing a specific subject matter” for the peaceful settlement of disputes? The fundamental difference between the UNCLOS dispute settlement mechanism (Part XV) and that of the UN system in general is that, any dispute concerning the interpretation or application of UNCLOS shall be submitted at the request of either party to the court or tribunal that has jurisdiction over these matters, under Section 2 of Part XV (compulsory procedure entailing binding decisions).

The disputes within the South China Sea concern islands/insular features (type A disputes). A critical point to note here is that all the procedures under UNCLOS – including compulsory a procedure entailing binding decisions – only apply to disputes concerning the interpretation or application of the Convention.11 Since UNCLOS does not prescribe substantive rules regarding the ownership of islands/insular features, it is


in fact general international law that applies to the disputes in the South China Sea (Zhang, 2011). Party States to type A disputes are obliged to settle them peacefully under general international law. Hence, since the ownership of the islands in the South China Sea is disputed, the waters (territorial seas, EEZs, and continental shelves) inevitably remain disputed, making them Type B disputes. Hence, these also do not fall within the UNCLOS framework.12

Since type A and B maritime space disputes involve the question of ownership, they do not involve interpretation or application of UNCLOS, unlike type C and type D disputes. Article 287(1) of UNCLOS consists of a list of binding procedures for state parties to settle their disputes concerning the interpretation or application of this Convention.13 According to paragraph 3 of Article 287,14 since China has not chosen a particular procedure, another UNCLOS party state may unilaterally invoke Annex VII arbitration against China with respect to type C and type D disputes.

The application of the Annex VII arbitration is subject to certain condi-tions, in particular, those prescribed in Article 286.15 These said condi-tions have been framed by the Barbados v. Trinidad and Tobago case. First, according to Article 298, in Section 3 of Part XV, States may exclude themselves from the judicial procedures in times of dispute (Barbados v. Trinidad and Tobago, 2006, para. 192). Second, in matters where parties are unable to reach a settlement in accordance to the general provisions mentioned in section 1 of Part XV, the immediately relevant proce-dures are found in Article 281, 282, and 283 (Barbados v. Trinidad and Tobago, 2006, para. 200, 201). Third, as a matter of general international law as well as application of Article 286, the existence of the dispute is also a determinant factor (Barbados v. Trinidad and Tobago, 2006, para. 193–199). The above issues in relation to Article 286 were taken up by the Tribunal in the Barbados v. Trinidad and Tobago arbitration as juris-dictional issues, over which the Tribunal has the final say (Barbados v. Trinidad and Tobago, 2006, para. 209).16

Under this framework, the compatibility of China’s policy in South China Sea can be assessed with respect to type C and D disputes. Article 298 prescribes these optional exceptions to compulsory binding proce-dures in certain categories of disputes. According to 298(1)(a)(i), these include disputes concerning sea boundary delimitations, or those involving historic bays or titles.17 On 25 August 2006, China submitted the following written declaration to the UN General Secretary:

The Government of the People’s Republic of China does not accept any of the procedures provided for in Section 2 of Part XV of the Convention with

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respect to all the categories of disputes referred to in paragraph 1 (a) (b) and (c) of Article 298 of the Convention.18

Type C disputes concern exactly those that involved the interpreta-tion or application of Articles 74 and 83, which relate to sea boundary delimitations and are undoubtedly excluded from compulsory binding procedures. This only leaves type D disputes. It is debatable whether type D disputes are excluded by the same declaration. This argument arises on the grounds that historic title is not provided for in the Convention and/or that the nature and contents of the U-shaped line has been kept within a certain degree of ambiguity.

Another important article to consider is Article 281.19 According to this article, arbitration is applicable in two situations. The first being one in which no settlement has been reached, despite pursuing the agreed route; the second being the case where their agreement does not exclude any further procedure (Barbados v. Trinidad and Tobago, 2006, para. 200). In the case of the South China Sea, China has indeed obtained a consensus (a formal agreement or otherwise) from other claimant states, to settle their disputes through negotiation (such as the Declaration of the Code of Conduct).20 It is also debatable whether this agreement amounts to the exclusion of any further procedure.

Moreover, since there is no alternative binding dispute settlement procedure in between or among the claimant states in the South China Sea dispute, it will not bar the invocation and application of Annex VII Arbitration.21

Finally, Article 283 defines obligations to exchange views. It states that when a dispute arises between States Parties concerning the interpreta-tion or application of this Convention, the parties to the dispute are obliged to exchange views regarding its settlement through negotiation or other peaceful means. This provision is likely to set a temporary bar on the invocation of Annex VII Arbitration.

The reasoning in the Barbados v. Trinidad and Tobago case makes it clear that the UNCLOS dispute settlement mechanism also sets out circum-stances and the means for excluding a dispute from arbitral proceeding. With this in mind, the Philippines’ invocation of Annex VII Arbitration will be examined.

The Challenge: The Philippines’ Notification and Statement of Claim on 22 January 2013

According to the Philippines, neither country made declarations pursuant to Article 287(1). Hence, as UNCLOS State Parties they are


deemed by operation of Article 287(3) to accept Arbitration as a means for resolving the dispute. With this standing, Philippines unilaterally invoked Annex VII Arbitration in accordance with Article 287(5) (DFAP, 2013, para. 35, 36). In doing so, it relied exclusively on the compromis-sory clause, that is, UNCLOS Article 286 as the sole basis of the jurisdic-tion for its submission.

In section 3 of its Notification, the Philippines presented 10 points of its “claims,” with 13 points on “relief sought” (DFAP, 2013, para. 31, 41). Since the claims are not final but may be subsequently supplemented or amended (DFAP, 2013, para. 43), it is difficult to fix all the specific issues of the submitted dispute at the present stage. Thus far, the claims present in the Notification roughly involve three categories of substan-tial issues relating to maritime jurisdiction.22 The first is on the validity of the China’s U-shaped line; the second is on the legality of the alleged Chinese occupation of the Mischief Reef, McKennan Reef, Gaven Reef, and Subi Reef as “submerged” features;23 the third is on the status of Scarborough Shoal, Johnson Reef, Cuateron Reef, and Fiery Cross Reef, claiming that they are “rocks” under Article 121 (3) of the UNCLOS, and therefore cannot generate maritime zones beyond 12 nautical miles. As far as procedural matters concerned, Philippines maintained that it had fulfilled obligation of exchange of views under Article 283 (DFAP, 2013, para. 25–30). It further contended that the its claims do not fall within China’s Declaration of 25 August 2006, which excluded certain categories of maritime space disputes under Article 298(1) (DFAP, 2013, para. 37–40).

For the claim relating to China’s U-shaped line, a key challenge can be raised as to whether the Philippines raised a hypothetical question. According to China’s communication dated 7 May 2009, the line repre-sents China’s claims on the “sovereignty over islands and adjacent waters” and “sovereign rights and jurisdiction over relevant waters as well as seabed and subsoil thereof” in the South China Sea (UN, 2009). Philippines believes this to be the first official statement on the U-shaped line (UN, 2009, para. 11). However, China has not yet stated the basis for making such a line or clarified the legal nature of the line. In other words, its status remains ambiguous. In this context, it can be argued that it is not ripe for the Philippines to request the Tribunal to make a judgment on the validity of the line. Moreover, it is clear from the baselines established around China’s mainland coasts and Xisha/Paracel Islands that the U-shaped line is not a line claiming China’s territorial seas or internal waters. China has also officially declared that freedom of navigation in the South China Sea, including relevant waters within the U-shaped line, shall not be impeded (MFA PRC, 2012). Hence, it can

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be argued that claims relating to freedom of navigation within U-shaped line are perhaps hypothetical and without factual basis.

It can, however, be argued that China’s claim of sovereign rights and jurisdiction over relevant waters within the U-shaped line is based on the notion of historical title/right. This may be based on two grounds. The first being the incidents concerning exercise of sovereign rights and jurisdiction in the overlapping marine area of the U-shaped line and the Philippines’ claimed EEZ or continental shelf; Secondly, in accord-ance to China’s 1998 EEZ, Continental Shelf legislation24 and the 2009 communication.25 Had this been further promulgated and ascertained by the Chinese government, it would have given rise to a type D dispute, as described earlier in this chapter. This would invariably raise the ques-tion of whether it has been excluded by China’s declaration made under Article 298.26 “Historical title” is not categorically defined in Article 298 but only mentioned in territorial sea delimitation in UNCLOS Article 15.27 Therefore, it can be asserted that “historical titles” in Article 298(1)(a)(i) refers to sovereignty – equivalent to territorial waters or internal waters. If so, and since China’s U-shaped line is not a line claiming her territorial seas or internal waters, China cannot exclude this type D dispute by referring to its 2006 Declaration made under Article 298.

As for this argument, a remaining unsettled problem is the difference between the term “historic titles” in the second half of subparagraph of Article 298(1)(a)(i) and “historic title” in Article 15. Arguably, they could mean the same thing, apart from the apparent plural form used by Article 298. Such an interpretation28 will make the exclusion of “historic titles” in the second half of subparagraph (a) redundant, because in the first half of that provision, “disputes concerning the interpretation or application of articles 15” has already included disputes with regard to historical title. Since “historic title” in Article 15 refers to a marine area subject to sovereignty of coastal states, it implies that the further excluded “historical titles” does not mean the exact same thing. Hence, “historical titles” refer to a more generic notion of historical right, which indicates not only the “historic title” of a marine area subject to sover-eignty, but also to other marine areas.29 In that case, the U-shaped line dispute shall be covered by the Chinese 2006 declaration of exclusion.

The other two categories of the Philippines’ claims will be analysed. Claims relating to submerged features have been made on the propo-sition that they are “part of the seabed and cannot be acquired by a State, or subject to its sovereignty, unless they form part of that State’s Continental Shelf under Part 6 of the Convention” (DFAP, 2013, para. 30). The Philippines claims that two of them, Mischief Reef and McKennan


Reef, are part of its Continental Shelf under Part 6 of the Convention. By virtue of this claim and under the circumstance that the Philippines’ continental shelf is at stake, it can be argued that this category of the claims constitute disputes that are subject to delimitation of Continental Shelf, which fall into jurisdictional exceptions under Article 298(1).

On the Philippines’ third category of claims that certain insular features are indeed only “rocks” under Article 121 (3) of the UNCLOS and therefore can only generate territorial seas but not EEZs or Continental Shelves. In order for the Philippines to establish its legal standing in requesting a declaratory judgment on the status of the insular features, the Philippines must indicate that its asserted EEZ or Continental Shelf are under threat by the extended marine area that the insular features would have generated. Nevertheless, this will turn the dispute into what is believed to be “inherently related to maritime delimitation and should be excluded due to the optional exception of one (or both) of the disputant States” (Klein, 2009, p. 276).

Looking Forward

China’s “setting aside disputes and pursuing joint development” policy, and its compatibility with the UNCLOS dispute settlement mecha-nism, has been challenged by the Philippines’ invocation of an arbi-tral proceeding. China’s 2006 Declaration under UNCLOS 298 has set a main defence line for its long lasting policy on dispute settlement. The territorial-rooted dispute in the South China Sea also renders China a reasonable objection to the arbitration, whose jurisdiction does not cover territorial dispute according to UNCLOS 286 – the sole jurisdic-tional basis for the Philippines to initiate the proceeding. Whether the Tribunal will decide for or against these jurisdictional objections in the present case is not the purpose of this study. However, in reviewing China’s policy and the Philippines’ move for arbitration with regard to the settlement of their dispute, some preliminary observations are warranted and have been reflected upon in this chapter.

First, although unilateral invocation of Annex VII arbitration by the Philippines cannot be taken as an abuse of right, the declaratory judge-ments that the Philippines requested on various issues from the arbi-tration look to be too “luxurious” in today’s international legal order, unless the Philippines has established that its rights and interests are under imminent threat. Second, to avoid hypothetical questions and concerns that the arbitral tribunal indeed can hardly attempt to answer, it is wished that the obligation of exchanges of views under Article 283

48 Zhang Xinjun

is undertaken in due course. Third, since the South China Sea is a typical semi-enclosed sea under Article 122, the obligation of bordering states’ to cooperate is particularly significant. By itself however, it will not prevent a state from seeking other procedures prescribed in the UNCLOS. Fourth, also in this regard, the Association of Southeast Asian Nations (ASEAN) is deemed to play an important role in the management of disputes in the semi-enclosed sea, and has made some achievements, for example, the Declaration on the Conduct of Parties in the South China Sea (DOC). A unilateral invocation of the Annex VII arbitration may either have a negative impact on the ASEAN-China track in managing the South China Sea issues, or, more likely, damage the Philippines’ inter-ests if the ASEAN-China track is sustained. Fifth, notwithstanding how Philippines has packaged its claims, the maritime jurisdictional disputes are rooted in territorial disputes over insular features. Concerning the colonial history in this region and relatively recent exercise of actual control over these features by claimant states, the unilateral invocation of Annex VII arbitration may accelerate the competition among these states in consolidating their territorial claims by a more positive physical presence – the “durable resolution of the dispute in the West Philippine Sea” faces a dim future.

Notes

1. See Zhang (2010). 2. Such as the EP-3 incident (2001); the USNS Bowditch incident (2002); the

USNS Impeccable incident (2009). 3. The land dominates the sea: See North Sea Continental Shelf Case (1969,

p. 51: para. 96); Aegean Sea Continental Shelf Case (1978, p. 36: para. 86); Case Con Maritime Delimitation and Territorial Questions between Qatar and Bahrain (2001, p. 97: para. 185).

4. See MFA PRC (2004). 5. For China’s position on the South China Sea Joint Development, see MFA

PRC (2011). 6. The text of the Principled Consensus was concurrently released by the

Foreign Ministries of China and Japan. The Chinese release can be found at http://www.fmprc.gov.cn/mfa_chn/fyrbt_602243/dhdw_602249/t466568.shtm. The Japanese release can be found at MFA JAP (2008). The English version appears at the Chinese Foreign Ministry website. This English version is attached as an Annex in Gao (2009).

7. It is noted that they were also codified in UNCLOS Article 279. 8. This provision sets up obligation for the State Parties. See Simma (1994,

p. 101). 9. This provision sets up obligation for the State Parties. See Simma (1994,

p. 101).


10. When the continuance of the dispute is in fact likely to endanger the main-tenance of international peace and security, the Security Council shall make recommendations (Article 37) or decide measures to maintain or restore international peace and security (Article 39). However, whether or not it will endanger international peace and security, and justice, is a matter of appreciation which will be handled within the Security Council decision-making process, which normally involves difficult political process, and the resolution (in case of Article 39) shall be subject to veto from any of the five permanent members (Article 27.3). Here at lease the permanent members of Security Council seem to enjoy certain privilege when they believe that setting aside disputes and negotiating other measures would do best for settling disputes that they involve.

11. UNCLOS Article 279–284, Article 286.12. However, A state party to UNCLOS may arguably initiate a LOS proceedings

upon article 286 with regard to whether the EEZ or continental shelf has been made in conformity with article 57 or article 76, whether strait base line has been made in conformity to article 7 of the Convention, or the disputed maritime feature is a land or a rock and whether it has its EEZ or continental shelf or not according to article 121. The scope of this chapter does not permit lengthy discussion of this much argued question.

13. Art. 287 (1) “1. When signing, ratifying, or acceding to this Convention or at any time thereafter, a State shall be free to choose, by means of a written declaration, one or more of the following means for the settlement of disputes concerning the interpretation or application of this Convention:(a) the International Tribunal for the Law of the Sea established in accord-

ance with Annex VI;(b) the International Court of Justice;(c) an arbitral tribunal constituted in accordance with Annex VII;(d) a special arbitral tribunal constituted in accordance with Annex VIII for

one or more of the categories of disputes specified therein.”14. Art. 287 (3): “A State Party, which is a party to a dispute not covered by a

declaration in force, shall be deemed to have accepted arbitration in accord-ance with Annex VII.”

15. Article 286: “Subject to section 3, any dispute concerning the interpreta-tion or application of this Convention shall, where no settlement has been reached by recourse to section 1, be submitted at the request of any party to the dispute to the court or tribunal having jurisdiction under this section.”

16. Also see, UNCLOS Article 288 (4).17. Article 298(1)(a)(i): “1. When signing, ratifying or acceding to this Convention

or at any time thereafter, a State may, without prejudice to the obligations arising under section 1, declare in writing that it does not accept any one or more of the procedures provided for in section 2 with respect to one or more of the following categories of disputes:(a) (i) disputes concerning the interpretation or application of articles 15,

74 and 83 relating to sea boundary delimitations, or those involving historic bays or titles, ... ”

18. This English version is slightly different from the Chinese one posted in the official website of the Chinese Ministry of Foreign Affairs. See (Oceans and Law of the Sea, UN, 2006). The Chinese version explicitly specifies “disputes

50 Zhang Xinjun

related to sea boundary delimitations, territorial disputes, military activi-ties and etc., explaining the categories of the precluded disputes. When addressing the procedures to be precluded, it states directly that China will not be subject jurisdiction of international judicial and arbitrational process.” See MFA PRC (2006).

19. Article 281(1): “If the States Parties which are parties to a dispute concerning the interpretation or application of this Convention have agreed to seek settlement of the dispute by a peaceful means of their own choice, the proce-dures provided for in this Part apply only where no settlement has been reached by recourse to such means and the agreement between the parties does not exclude any further procedure.”

20. The text of DOC is reprinted in Ocean Development & International Law. See Thao (2003).

21. Article 282: “If the States Parties which are parties to a dispute concerning the interpretation or application of this Convention have agreed, through a general, regional or bilateral agreement or otherwise, that such dispute shall, at the request of any party to the dispute, be submitted to a procedure that entails a binding decision, that procedure shall apply in lieu of the proce-dures provided for in this Part, unless the parties to the dispute otherwise agree.”

22. In the Philippines’ Note Verbale (No. 13–0211), it has been stated quite clearly that the Notification submitted is “with respect to the dispute with China over the maritime jurisdiction”. However, the claims and requests in the Notification also extend to issues such as “rights to navigation” and requests for remedies in various issue areas (DFAP, 2013).

23. There is no definition of “submerged features” in the Convention. The reefs mentioned in the Philippines’ claims are arguably “low tide elevations,” which “is a naturally formed area of land which is surrounded by and above water at low tide but submerged at high tide” (UNCLOS, Article 13).

24. See Article 14 (1998).25. Stating that “the above position is constantly held by the Chinese

Government, and is wildly known by the international community.” See UN (2009).

26. But in the level of jurisdictional argument, the dispute concerning interpre-tation or application of Article 298 seems not to be sufficient by itself for establishing jurisdiction; otherwise that reasoning would turn to be circular.

27. Article 15 of the UNCLOS provides: “The above provision [the median line rule] does not apply, however, where it is necessary by reason of historic title or other special circumstances to delimit the territorial seas of the two States in a way which is at variance therewith.”

28. See Treves (2001, p. 121).29. Juridical Regime of Historic Waters, Including Historic Bays. See UN (1964,

p. 25) and UN (1958, p. 37).

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http://www.un.org/depts/los/convention_agreements/texts/unclos/unclos_e.pdf.

Zhang, H. (18 May 2011). UNCLOS Is Not the Only Legal Basis for the South China Sea Dispute Resolution. Retrieved 13 November 2013, from Guangming Daily: http://theory.people.com.cn/GB/14668824.html.

Zhang, X. (April 2010). China’s “Peaceful Rise.” “Harmonious” Foreign Relations, and Legal Confrontation – and Lessons from the Sino-Japanese Dispute over the East China Sea. Retrieved 11 November 2013, from Foreign Policy Research Institute: http://www.fpri.org/articles/2010/04/chinas-peaceful-rise-harmo-nious-foreign-relations-and-legal-confrontation-and-lessons-sino-japanese-dispute-over-east-china-sea.

Zhang, X. (2011). Why the 2008 Sino-Japanese Consensus on the East China Sea Has Stalled: Good Faith and Reciprocity Considerations in Interim Measures Pending a Maritime Boundary Delimitation. Ocean Development and International Law, 42(1), 53–65.

Zhang, X. (2012). International Law in Managing Unsettled Maritime Boundaries: A Report on the Sino-Japanese Dispute Over the East China Sea. In M. H. Nordquist, & J. N. Moore (eds.), Maritime Border Diplomacy (pp. 309–320). Leiden: Brill Publishers.

54

On 22 January 2013, the Philippines officially notified China that it had instituted arbitral proceedings1 against China under Annex VII of the 1982 United Nations Convention on the Law of the Sea (UNCLOS). This chapter will examine the role of UNCLOS and international law in the South China Sea disputes, and will focus in particular on the signifi-cance of the arbitration instituted by the Philippines. It will explain the legal issues raised by the Philippines’ Statement of Claim. It will also analyse the possible impact of the case on the disputes concerning mari-time claims in the South China Sea, including China’s claim to rights and jurisdiction in the maritime space inside the infamous nine-dash line on the Chinese map of the South China Sea.

Legal Disputes in the South China Sea

Disputes on Sovereignty over Off-Shore Islands

The fundamental dispute in the South China Sea concerns sover-eignty over offshore islands. Brunei Darussalam, China, Malaysia, the Philippines, and Vietnam claim some or all of the islands in the Spratly Islands. China and the Philippines claim the islands in Scarborough Shoal, and China and Vietnam claim the Paracel Islands. In addition, Taiwan claims the same islands as China.

The international law on the acquisition and loss of territory (including islands) is set out in the principles and rules of customary international law. There are no provisions in UNCLOS on how to deter-mine which State has the better claim to sovereignty over a disputed territory. UNCLOS only sets out what maritime zones can be claimed from land territory (including islands), as well as the rights and jurisdic-tion of States in such maritime zones.

3The Philippines v. China Case and the South China Sea DisputesRobert C. Beckman

Philippines v. China Case 55

The fundamental principle of international law governing the settle-ment of disputes is that a dispute between two States on an issue of international law cannot be referred to an international court or tribunal without the consent of both parties to the dispute. Therefore, the disputes on which State has the better claim to sovereignty over the disputed islands in the South China Sea cannot be referred to any form of third party dispute settlement without the consent of all parties to the dispute.

Disputes Concerning UNCLOS

All of the States bordering the South China Sea and claiming sover-eignty over the islands in the South China Sea are parties to UNCLOS. Therefore, UNCLOS is critically important when analysing the legal disputes in the South China Sea. UNCLOS assumes that it is known who has sovereignty over land territory, including offshore islands. It sets out what maritime zones can be claimed by States from their land territory and islands, and the rights and duties of coastal States and other States in the various maritime zones.

When a State becomes a party to UNCLOS, it consents in advance to the dispute settlement provisions in Part XV of UNCLOS. The general principle in Part XV is that if a dispute arises between two parties on the interpretation or application of a provision in UNCLOS and the dispute cannot be resolved by consultation and negotiation, either party to the dispute may unilaterally bring the dispute before an international court or arbitral tribunal (Art. 286, UNCLOS) and the decision of the court or tribunal is legally binding on both parties to the dispute (Art. 287, UNCLOS).

Court or Tribunal with Jurisdiction to Hear a Dispute under UNCLOS Part XV

When a State becomes a party to UNCLOS, or at any time thereafter, it has a right to elect in advance its preferred forum for the resolution of any disputes to which it is a party (Art. 287, UNCLOS). By making a formal declaration to the UN secretary-general, a State Party can declare that it prefers one or more of the following courts or tribunals: (1) the International Tribunal for Law of the Sea (ITLOS); (2) the International Court of Justice (ICJ); (3) an arbitral tribunal established under Annex VII of UNCLOS; or (4) a special arbitral tribunal established under Annex VIII of UNCLOS.

If the Parties to a dispute have elected the same court or tribunal, that court or tribunal will have jurisdiction to hear the case, unless the

56 Robert C. Beckman

Parties otherwise agree (Art. 287(4), UNCLOS). If the States Parties to the dispute have not chosen the same court or tribunal (Art. 287(5), UNCLOS), or have made no choice (Art. 287(3), UNCLOS), then the dispute will go to arbitration under Annex VII, unless the Parties other-wise agree (Art. 287(5), UNCLOS).

Neither China nor the Philippines has made a declaration indicating a preference for a particular court or tribunal.2 Therefore, the Philippines instituted arbitral proceedings against China under Annex VII.

Decision of the Arbitral Tribunal Has Binding Force

Article 296 provides that any decision rendered by a court or tribunal having jurisdiction under this Section (Section 2) shall be final and shall be complied with by all the parties to the dispute (Art. 296(1), UNCLOS). Further, any such decision shall have no binding force except between the parties and in respect of that particular dispute (Art. 296(2), UNCLOS). These provisions are the same as those with respect to decisions of the ICJ.

Optional Exceptions from the Dispute Settlement Procedures in UNCLOS

Because certain categories of disputes are very sensitive in some coun-tries, Article 298 of UNCLOS provides that States may make a formal declaration to the UN secretary-general, giving notice that they do not accept the compulsory procedures entailing binding decisions in Section 2 of Part XV for certain categories of disputes. These categories are (Art. 298(1), UNCLOS):

disputes concerning the interpretation or application of Articles 15, (a) 74, and 83 relating to sea boundary delimitations, or those involving historic bays or titles;disputes concerning military activities, including military activi-(b) ties by government vessels and aircraft engaged in non-commercial service;disputes in respect of which the Security Council of the United (c) Nations is exercising the functions assigned to it by the Charter of the United Nations.

In 1996, China made a formal declaration under Article 298 stating that it does not accept the system of compulsory procedures entailing binding decisions in Section 2 of Part XV of UNCLOS for any of the categories of disputes listed in Article 298.3 It is the only State bordering the South China Sea that has made such a declaration.4


Disputes Concerning unclos Provisions Not Excluded by China’s Declaration

If a dispute arises between one of the Association of Southeast Asian Nations (ASEAN) claimants and China concerning the interpretation or application of provisions of UNCLOS which are not within the categories excluded by China’s declaration under Article 298, and which cannot be resolved through consultations and negotiations, such disputes are subject to the compulsory procedures entailing binding decisions in Section 2 of Part XV of UNCLOS.

Limits of the Philippines’ Claim in the Philippines v. China Arbitration Case under Annex VII

On 22 January 2013, the Philippines officially notified China that it had instituted arbitral proceedings against China under Annex VII of the UNCLOS.5 The Philippines’ claim recognises that the Tribunal does not have jurisdiction to decide two categories of legal issues.

First, the Philippines’ claim recognises that the Tribunal has no jurisdic-tion over issues of territorial sovereignty.6 In other words, the Philippines recognises that the Tribunal has no jurisdiction to decide which State has the better claim to sovereignty over the disputed islands.

Second, the Philippines’ claim recognises that the Tribunal has no jurisdiction over certain categories of disputes, these being disputes that are excluded from the compulsory dispute settlement procedures in UNCLOS because of China’s declaration under Article 298 of UNCLOS.7 In its Statement of Claim, the Philippines expressly states that it is aware of China’s declaration under Article 298 of UNCLOS excluding certain categories of disputes, including disputes on sea boundary delimitation and historic titles, from binding dispute settlement.8 The Philippines further states that it has avoided raising any subjects or making any claims that China has excluded by its declaration under Article 298, especially those concerning boundary delimitation or historic titles.9

The Philippines argues that there are disputes between it and China on the interpretation or application of the provisions of UNCLOS other than those on territorial sovereignty, boundary delimitation or historic title. The disputes include:

whether China has interfered with the right of the Philippines to ●

exercise sovereign rights over the natural resources in its exclusive economic zone (EEZ);


whether China has claimed excessive maritime zones from small ●

islands it claims sovereignty over and occupies because these islands are “rocks which cannot sustain human habitation or economic life of their own” within Article 121(3) of UNCLOS and are thus not enti-tled to an EEZ and continental shelf of their own;whether China has illegally occupied and claimed sovereignty ●

over certain submerged features which are not subject to a claim of sovereignty because they are not islands, but instead are part of the seabed.

Main Issues Raised in the Philippines’ Case

The Philippines’ Notification and Statement of Claim raises four main issues. The most important is whether China can lawfully make any maritime claim based on its nine-dash line, either to sovereignty over the waters or to sovereign rights to the natural resources within the waters. The Philippines requests the Tribunal to rule that China can only claim rights to maritime space in maritime zones measured from land territory (including islands), and that claims from the nine-dash line are not consistent with UNCLOS. The main purpose of the case seems to be to challenge the legality of China’s claim to historic rights and jurisdic-tion inside the nine-dash line.

The second major issue raised in the Statement of Claim concerns the maritime claims that can be made from the disputed islands currently occupied by China, that is, Scarborough Shoal and three islands that are within the Kalayaan Island Group (KIG) claimed by the Philippines (these being Johnson Reef, Cuarteron Reef, and Fiery Cross Reef). The Philippines requests the Tribunal to rule that all of the “islands” occupied by China (the naturally formed areas of land above water at high tide) are “rocks” entitled only to a 12 nautical miles territorial sea because they cannot “sustain human habitation or economic life of their own,” as set out in Article 121(3) of UNCLOS. It also requests the Tribunal to declare that China has unlawfully claimed maritime entitlements beyond 12 nautical miles from these features and has unlawfully interfered with the exercise by the Philippines of its rights and freedoms in the maritime space surrounding Scarborough Shoal and Johnson Reef.

The third major issue raised in the Statement of Claim concerns the geographic features in the KIG that are currently occupied by China but do not meet the definition of an island as set out in Article 121(1) because they are not naturally formed areas of land above water at high tide (these being Mischief Reef, McKennan Reef, Gaven Reef, and Subi


Reef). The Philippines argues that such features are not subject to a claim of sovereignty and that China’s occupation of them is illegal because they are part of the continental shelf of the Philippines.

The fourth major issue raised in the Statement of Claim is that China has unlawfully prevented Philippine vessels from exploiting the living resources in the waters “adjacent to” Scarborough Shoal and Johnson Reef. The Philippines has requested the Tribunal to issue an Award that requires China to refrain from preventing Philippine vessels from exploiting, in a sustainable manner, the living resources in the waters “adjacent to” Scarborough Shoal and Johnson Reef, and from under-taking other activities inconsistent with UNCLOS “at or in the vicinity” of these features.

Procedural Issues

Effect of China’s Failure to Participate in the Arbitration

When the Philippines instituted proceedings on 22 January 2013 by giving the necessary Notification to China, it also nominated Judge Rüdiger Wolfrum of Germany as one of the five arbitrators to hear the case. China had 30 days from the date of this notification to nomi-nate one arbitrator. However, on 19 February 2013, just before the 30 days were up, China announced that it had rejected and returned the Philippines’ Notification, thus indicating that it did not intend to partic-ipate in the arbitral proceedings.

In accordance with Article 3 of Annex VII to UNCLOS, the Philippines then requested the president of ITLOS, Judge Yanai of Japan, to appoint an arbitrator on behalf of China. The remaining three arbitrators were to be appointed by agreement between the Philippines and China, within 60 days from the date of the Philippines’ Notification of Claim, failing which the remaining three arbitrators were to be appointed by the President of ITLOS.

Article 3 of Annex VII to UNCLOS requires that any arbitrators appointed by the president of ITLOS must be selected from persons on the UN List of Arbitrators (Art. 3(c), (d), and (e), Annex VII, UNCLOS). The UN List consists of the persons nominated by States Parties to UNCLOS.10 Annex VII also provides that the President of ITLOS must nominate one of the three arbitrators he selects to serve as the president of the Tribunal. The Tribunal will then be constituted and it will deter-mine its Rules of Procedure.

Because China failed to participate in the proceedings and the 60-day period had expired, Judge Yanai appointed Stanislaw Pawlak, the ITLOS


Judge from Poland, to serve as an arbitrator on behalf of China. On 24 March 2013, Judge Yanai appointed the remaining three arbitrators – Jean-Pierre Cot (ITLOS Judge from France), Thomas Mensah (Ghana), and Alfred Soons (the Netherlands). The president appointed Thomas Mensah as president of the arbitral tribunal (ITLOS, 2013). The case is being administered by the Permanent Court of Arbitration at The Hague. Rules of Procedure for the case were issued by the Tribunal on 31 August 2013. The Philippines submitted its formal written proceedings on 30 March 2014, which was the deadline set by the Tribunal.

The fact that China is refusing to participate in the proceedings will not stop the arbitral proceedings from going ahead. If China fails to appear to defend the case, the Philippines may request the Tribunal to continue with the hearing and make an Award.11 The absence of one of the parties to the dispute or the failure of a party to the dispute to defend the case is not a bar to the proceedings. Before making the Award in the absence of a party to the dispute, the arbitral tribunal must satisfy itself that: (1) it has jurisdiction; and (2) the claim is well founded in fact and law (Art. 9, Annex VII, UNCLOS).

The Philippines has attempted to craft its Statement of Claim so that it raises disputes on the interpretation and application of provisions of UNCLOS other than those on the delimitation of maritime boundaries and territorial sovereignty. Nevertheless, the Tribunal could hold that it has no jurisdiction over some of the issues raised in the Statement of Claim of the Philippines because they are inextricably linked to issues of sovereignty and maritime boundary delimitation. There is a good chance, however, that the Tribunal will decide that it has jurisdiction over at least some of the issues raised in the Philippines’ Statement of Claim and will proceed to hear the case.

In addition, if the Tribunal issues an Award, it will be legally binding on both China and the Philippines (Art. 11, Annex VII, UNCLOS). If China fails to implement the Award, or takes action contrary to it, the Philippines has the right to return to the same Tribunal and request further orders regarding the implementation of the Award (Art. 12, Annex VII, UNCLOS). This could be a potential source of embarrass-ment for China.

Intervention in the Case by Other States

In contrast to cases heard by ITLOS or the ICJ, there is no procedure for intervention by a third state party to UNCLOS in cases before an arbi-tral tribunal under Annex VII. Generally speaking, no right of interven-tion exists in relation to arbitrations, which is ultimately founded upon


the consent of the parties. Accordingly, no State may intervene in the proceedings without the consent of the parties to the dispute (Collier et al., 1999: pp. 208–209).

Settlement of the Case

The parties to a dispute governed by Part XV of UNCLOS can agree to settle the case through negotiations before the arbitration actually begins, or any time thereafter (Art. 280, UNCLOS). Therefore, China has several months to attempt to negotiate with the Philippines to agree to settle the dispute before the Tribunal makes a decision.

Philippines Could Request Provisional Measures

In the final paragraph of its Statement of Claim, the Philippines expressly reserved the right to preserve its rights under UNCLOS, including the right to make a request for Provisional Measures.12 If China responds to the Philippines’ claim by taking action to assert its rights in a manner contrary to the rights of the Philippines, the Philippines could seek a remedy by way of Provisional Measures from ITLOS or the Tribunal to preserve its rights, pending the final decision of the Tribunal.

If the Philippines had decided to request Provisional Measures in order to preserve its rights prior to the arbitral tribunal being estab-lished, it could have requested Provisional Measures from ITLOS (Art. 290(5), UNCLOS). Once the arbitral tribunal is established, any request for Provisional Measures must be made to the arbitral tribunal.

Before granting Provisional Measures, the court or tribunal must first establish that it prima facie has jurisdiction under Part XV of UNCLOS and that the urgency of the situation so requires the granting of the measures.

The Effect of the Award on the South China Sea Disputes

Legality of Maritime Claims within the Nine-Dash Line

If the Tribunal rules that China cannot make any maritime claims based on the nine-dash line and can only do so based on the positions of its islands, China would be under a legal obligation to bring its maritime claims into conformity with UNCLOS and claim rights and jurisdiction over resources only in maritime zones measured from islands over which it claims sovereignty. This would cast a dark shadow on the legitimacy of any claims made by China to resources in the maritime space within the nine-dash line that are not within a maritime zone claimed from an island.


As a matter of law, such a decision would be binding only on the two parties to the case. However, such a ruling would greatly benefit Brunei Darussalam, Malaysia, Vietnam, and even Indonesia, as the nine-dash line also overlaps with their EEZ claims.

Issues Concerning Islands and Rocks

One of the other important issues raised in the case is whether the islands occupied by China are rocks within Article 121(3) and entitled to a 12 nautical miles territorial sea, but not to an EEZ or continental shelf. Such a ruling would greatly benefit the Philippines, especially in the case of Scarborough Shoal, which is located in waters within the EEZ of the Philippines. It consists mostly of a submerged reef which contains 4–6 small rocks that are permanently above water at high tide. If the Tribunal held as a matter of law that these features are rocks within Article 121(3) and entitled only to a 12 nautical miles territorial sea, it would give the Philippines the sovereign right to explore and exploit all of the natural resources in and under the waters beyond 12 nautical miles from the rocks.

The broader significance of the Tribunal’s decision on Article 121(3) will depend on the Tribunal’s reasoning. The Tribunal could decide to rule only on whether the small islands occupied by China are rocks within Article 121(3), and confine its decision to the precise character-istics of those islands. This would leave open the question of whether any of the larger islands in the Spratlys (which are claimed by China but occupied by others) might in principle be entitled to an EEZ and conti-nental shelf of their own. This would enable China to claim an EEZ and continental shelf from the larger islands, which would result in a fairly large area of overlapping EEZ claims.

Issues Concerning Low-Tide Elevations and Submerged Features

The Tribunal could also decide that some of the features occupied by China are low-tide elevations as defined in Article 13 of UNCLOS, that is, they are naturally formed areas of land surrounded by and above water at low tide but submerged at high tide. If so, the Tribunal would rule that under UNCLOS no maritime zones of any kind could be claimed from such features. However, the Tribunal would also be likely to point out that under UNCLOS, if a low-tide elevation is within 12 nautical miles of a feature that meets the definition of an island, the low-tide elevation can be used as a base point in measuring the territorial sea from such island.

The Philippines has requested the Tribunal to rule that China’s occu-pation of the low-tide elevations is illegal because they are part of the


continental shelf of the Philippines measured from its main archipelago. However, if the Tribunal leaves open the question of whether any of the largest islands in the Spratlys are entitled to an EEZ and continental shelf of their own, then such low-tide elevations could be on the conti-nental shelf of such islands rather than the on the continental shelf of the Philippines measured from its main archipelago. Consequently, the Tribunal could rule that it cannot decide whose continental shelf such low-tide elevations are part of without engaging in maritime boundary delimitation, which is outside its jurisdiction.

Issues Concerning Interference with Sovereign Rights and Jurisdiction

The Philippines has also asked the Tribunal to rule that China has inter-fered with the right of navigation and other rights of the Philippines in waters surrounding the disputed features, which it asserts is within the EEZ of the Philippines. If the Tribunal decides that the islands on Scarborough Shoal are rocks within Article 121(3) and not entitled to an EEZ and continental shelf of their own, the area in dispute between China and the Philippines would be limited to the rocks themselves and the 12 nautical miles territorial sea adjacent to them. If the Tribunal also rules that China has no historic rights and jurisdiction within the nine-dash line, then the areas outside the 12 nautical miles territorial sea measured from the rocks would be within the EEZ of the Philippines. Therefore, the Tribunal could rule that it would be unlawful for China to interfere with the right of navigation or other rights of the Philippines in the waters surrounding Scarborough Shoal that are outside the terri-torial sea measured from the rocks.

Conclusions

First, it seems likely that the arbitral proceedings will continue without the participation of China, unless the parties agree to settle the case.

Second, although the Tribunal could hold that it has no jurisdiction to hear the case because the issues raised are inextricably linked to the issues of sovereignty and maritime boundaries, there is a good chance that it will rule that it has jurisdiction over at least some of the issues raised in the Statement of Claim of the Philippines.

Third, if the Tribunal issues an Award, it will be legally binding on both China and the Philippines and will not be subject to appeal.

Fourth, the decision of the Tribunal will not resolve the underlying dispute concerning which State has the better claim to sovereignty over


the disputed islands because this issue is not governed by UNCLOS and cannot be considered by the Tribunal.

Fifth, the decision of the Tribunal will not resolve the issue of how to determine the maritime boundaries in any areas of overlapping claims and is unlikely to address the issue of what effect should be given to the small islands in a maritime delimitation. This is because disputes on the delimitation of maritime boundaries are outside the jurisdiction of the Tribunal because of China’s declaration under Article 298.

Sixth, the Philippines will have achieved a major victory if the Tribunal rules in their favour on the most important issue to them – that China cannot make claims to maritime space based on history and the nine-dash line, but, like the Philippines and all other States Parties to UNCLOS, it can only make maritime claims from land territory and islands in accordance with UNCLOS and international law. A victory on this issue will be important not only for the Philippines, but for Vietnam, Malaysia, and Brunei Darussalam.

Seventh, there is also a possibility that the Philippines may be victorious on the nine-dash line issue and the issues concerning rocks and islands, but that the decision of the Tribunal will not clarify the areas of overlapping maritime claims. This is because the decision of the Tribunal on Article 121(3) may only decide that the islands occupied by China are rocks that are not entitled to an EEZ and continental shelf of their own. It may leave open the question of whether China may lawfully maintain that the larger islands in the Spratlys (currently occupied by Taiwan, the Philippines, and Vietnam) may in principle be entitled to an EEZ and continental shelf of their own. If this issue were left unresolved, China could lawfully maintain that much of the area in the KIG is an area of overlapping claims.

Finally, although it is impossible to predict how the case will turn out, it is hoped that the decision will clarify how the provisions in UNCLOS apply to the disputes in the South China Sea, and as a result of the deci-sion, all of the claimants, including China, will bring their claims into conformity with UNCLOS. This would set the stage for negotiations on what many observers believe is the only viable long-term solution to the legal disputes in the South China Sea – setting aside the disputes on territorial sovereignty and jointly developing the resources in the areas of overlapping maritime claims.

Notes

1. See PDFA (2013). 2. For the official texts of declarations and statements that contain the choice

of procedure under Article 287 of the UNCLOS, see OALS (2013).


3. See OALS (2013). 4. For the up-to-date official texts of declarations and statements that contain

optional exceptions to the applicability of Part XV, Section 2, under Article 298 of UNCLOS, supra note 2, see OALS (2013).

5. See the Notification and Statement of Claim, supra note 2 (PDFA, 2013). 6. See paragraph 47 of the Notification and Statement of Claim, supra note 2

(PDFA, 2013). 7. Declaration under Article 298, supra note 4 (OALS, 2013). 8. See paragraph 47 of the Notification and Statement of Claim, supra note 2

(PDFA, 2013). 9. See paragraphs 7 and 33–40, Notification and Statement of Claim, supra note

2 (PDFA, 2013).10. For the full list of arbitrators nominated by States Parties under Annex VII,

see UN (n.d.).11. See generally Article 9, Annex VII, UNCLOS (OALS, 2013).12. See paragraph 43 of the Notification and Statement of Claim, supra note 2

(PDFA, 2013).

References

Collier, J. G., & Lowe, V. (1999). The Settlement of Disputes in International Law: Institutions and Procedures. New York: Oxford University Press.

ITLOS (International Tribunal for the Law of the Sea). (25 April, 2013). Arbitrators Appointed in the Arbitral Proceedings Instituted by the Republic of the Philippines. Retrieved 5 March, 2014, from ITLOS: http://www.itlos.org/file-admin/itlos/documents/press_releases_english/PR_191_E.pdf.

PDFA (Philippines Department of Foreign Affairs). (22 January, 2013). Notification and Statement of Claim of the Philippines. Retrieved 5 March, 2014, from the Philippines Department of Foreign Affairs: file:///C:/Users/sppslj/Downloads/Notification%20and%20Statement%20of%20Claim%20on%20West%20Philippine%20Sea.pdf.

UN (United Nations). (10, December, 1982). Database. Retrieved 5 March, 2014, from United Nations Treaty Collections: https://treaties.un.org/Pages/ViewDetailsIII.aspx?&src=TREATY&mtdsg_no=XXI~6&chapter=21&Temp=mtdsg3&lang=en.

UNCLOS (United Nations Convention on the Law of the Sea). (25 August, 2006). Declarations and Statements: China. Retrieved 5 March, 2014, from Division for Ocean Affairs and the Law of the Sea: http://www.un.org/Depts/los/conven-tion_agreements/convention_declarations.htm#China after ratification.

UNCLOS (United Nations Convention on the Law of the Sea). (23 April, 2013). Settlement of DisputesMmechanism. Retrieved 5 March, 2014, from Oceans and Law of the Sea (United Nations): http://www.un.org/Depts/los/settlement_of_disputes/choice_procedure.htm.

Part III

The Role of ASEAN: Challenges and Choices

69

Since its founding in 1967, the Association of Southeast Asian Nations (ASEAN) has weathered its fair share of regional security challenges. Cold War conflicts in Vietnam and Cambodia to territorial disputes between its member states such as Malaysia, Singapore, Indonesia, Thailand, and Cambodia have long concerned ASEAN. Indeed, the Philippines’ claims to Sabah in 1968–1969 put a spanner in the works of regional integration. In the twenty-first century, territorial disputes in the South China Sea dominate ASEAN’s security agenda. Like all regional organi-sations such as the EU (European Union) or the NATO (Non-Atlantic Treaty Organisation), having to reconcile the varied national interests and ambitions of its component member states in order to present a concerted “regional” front is an extremely tall order. Even the EU, widely seen as the paragon of regional integration, struggled to convince northern members, such as Germany and Finland, to bail out southern members Greece and Spain. NATO members also differed over how to deal with the Kosovo crisis in 1999.

Member states of any regional organisation inevitably perceive different stakes on any given issue, a problem that has plagued ASEAN as it deals with the South China Sea problem. The underlying reason is simple: not all member states are claimants. Vietnam, the Philippines, Malaysia, and Brunei have staked out their claims in the South China Sea. Chinese and Philippine naval vessels squaring off near the Scarborough shoals in the Spratly Islands in April and May 2012 is only the latest in a long line of skirmishes dating back to the 1970s. In late March 2014, the Second Thomas Shoal emerged as another potential flashpoint, as the Philippines was prevented by Chinese coast guard vessels from resup-plying its Marines stationed on a rusting Second World War–vintage ship beached there to mark its claims. Other key members such as Thailand,

4ASEAN’s Position on the South China Sea and Implications for Regional Peace and Security Yee Kuang Heng

70 Yee Kuang Heng

Cambodia, and Singapore on the other hand are explicitly identifying themselves as “non-claimant” states. As Singapore’s prime minister Lee Hsien Loong explained, “Singapore has taken a clear and consistent posi-tion on the South China Sea issue. We are not a claimant country, take no sides in any of the territorial disputes, nor can we judge the merits of the various claims. However, Singapore does have certain critical inter-ests at stake” (Lee, 2012a). These interests include security of maritime sea-lanes of communication. Using this category of “non-claimant” state already suggests that solidarity with “claimant” states who also happen to be fellow ASEAN partners is not necessarily automatic.

This chapter is broken into three sections, beginning with an attempt to understand the various aspects of and limits to what can be consid-ered ASEAN’s common position as a regional entity on the South China Sea. Second, a discussion of the difficulties ASEAN has faced in forging consensus on a common position by all its member states. Finally, it examines the difficulties and implications for ASEAN centrality and its role in regional security.

ASEAN’s Position on the South China Sea: Maintaining ASEAN Centrality1

For analyst Mark Valencia, “ASEAN has no official position on the South China Sea disputes” (2012). This astounding conclusion that the organi-sation in fact does not take a stand requires some explanation, espe-cially in the face of continued claims by ASEAN leaders emphasising “ASEAN centrality” in addressing regional security issues. Former ASEAN secretary-general Surin Pitsuwan explained that “ASEAN has earned the place to play a central role in the evolving regional architecture by virtue of not only being the hub in economic integration initiatives in the region, but also by being able to provide the platform for political and economic dialogue and engagement among major global players” (Pitsuwan, 2010). This idea of “centrality,” however, does not necessarily mean that ASEAN will deal with the specific merits of delineation and settlement among claimant states. Instead, ASEAN’s goal is a more mini-malistic one: to set up a framework that would help facilitate claimant states negotiate a peaceful resolution of their competing claims. The issue of ASEAN “centrality” thus refers to its lead role in addressing the dispute on a multilateral basis, as opposed to Beijing’s preference to negotiate bilaterally with claimants. As Singapore’s foreign minister K. Shanmugam explained, “We have always been clear that ASEAN’s role – ASEAN as a whole, 10 states’ role – is in dealing with a framework

ASEAN’s Position on the South China Sea 71

and that’s a principle that has been accepted because ASEAN came up with the Declaration of Conduct (DOC) and the implementation guide-lines. So that’s really a non-contentious position. Singapore has taken a position of strict neutrality. That’s been our consistent position right through. We’ve always said claims are for the claimant states to settle, ASEAN should be neutral and certainly Singapore has always been and continues to be neutral on the claims” (CNA, 2012).

In 1992, the first ASEAN Declaration on the South China Sea, adopted at the 25th ASEAN Ministerial Meeting, took no sides and instead emphasised the non-use of force and urged all parties, whether these were ASEAN member states or China, to exercise restraint in order to create a positive climate for eventual resolution. It invited all claimants to adopt this declaration and to adhere to the principles of the Treaty of Amity as the basis for eventually establishing a code of conduct (COC). The Declaration on the Conduct of Parties in the South China Sea was signed by all the ASEAN foreign ministers – and China’s special envoy – in November 2002 but ironing out details of the COC has been pains-takingly slow. In 2004, ASEAN and China agreed on an action plan, and guidelines for implementation in 2011. A COC was supposed to be agreed upon by 2012 but the deadline has come and gone. After the Phnom Penh summit in July 2012, where ASEAN failed to release a joint statement for the first time ever, Indonesia helped salve the wounds afterwards to some extent by crafting “ASEAN’s Six-Point Principles on the South China Sea” released on 20 July 2012 reaffirming ASEAN’s commitment to:

the full implementation of the Declaration on the Conduct of Parties 1. in the South China Sea (2002);the Guidelines for the Implementation of the Declaration on the 2. Conduct of Parties in the South China Sea (2011);the early conclusion of a Regional Code of Conduct in the South 3. China Sea;the full respect of the universally recognised principles of the 4. International Law, including the 1982 United Nations Convention on the Law of the Sea (UNCLOS);the continued exercise of the self-restraint and non-use of force by 5. all parties; andthe peaceful resolution of disputes, in accordance with universally 6. recognised principles of International Law, including the 1982 United Nations Convention on the Law of the Sea (UNCLOS).

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The November 2012 ASEAN-China meeting in Beijing did not bring about a breakthrough. Instead, the ASEAN-China Joint Statement on the occasion of the tenth anniversary of the DOC reiterated the commit-ment of both ASEAN and China to start talks to craft a binding code of conduct.

Despite the lack of any tangible results, former Secretary-General Rodolfo Severino defended ASEAN’s performance regarding the South China Sea by saying, “Aside from deriving negotiating strength from the association in dealing with a behemoth that is China, ASEAN does operate as a group in a matter in which all its members, and not just the four claimants, have an interest. This is an acknowledged fact. ASEAN as a group holds discussions with China on the South China Sea in a number of forums” (2010, p. 46). The stakes are high for ASEAN, as Singapore’s prime minister Lee Hsien Loong highlighted, “the South China Sea is a major issue in the heart of ASEAN’s own region. For ASEAN not to address it would severely damage its credibility. ASEAN must not take sides on the various claims, but it has to take and state a position which is neutral, forward-looking, and encourages the peaceful resolution of issues” (Lee, 2012b).

Difficulties in Reaching a Common ASEAN Position

For ASEAN to remain “neutral” when some members are claimant or “frontline” states engaged in tense maritime stand-offs with China is becoming an increasingly difficult problem to solve. Differences between claimants and non-claimant states within ASEAN means that ASEAN’s long-standing method of slow methodical decision-making based on consensus, consultation, and proceeding are being put under strain. Even the sequencing of processes for drafting the COC caused some consternation. When former ASEAN secretary general Surin Pitsuwan announced that China might be invited to participate in the drafting of a COC, Indonesia agreed. Philippine foreign minister Albert Del Rosario however argued that ASEAN centrality was in jeopardy unless it first reached a consensus on a code among its members, and then negotiate with China. Manila was supported by Thailand and Vietnam. ASEAN members also differ over which dimensions of the DOC to emphasise in the COC. One aspect is the confirmation of peaceful resolution of terri-torial disputes and self-restraint of hostile attitudes. According to Sanae Suzuki (2012), the Philippines and Vietnam placed more importance on this first aspect of the DOC, seeking to incorporate dispute settlement procedures based on the United Nations Convention on the Law of


the Sea (UNCLOS). The other aspect is the enhancement of confidence building through mutual exchange of military personnel and coopera-tion in environmental research. China emphasised the second aspect; it saw a COC as useful for confidence building, not for a method of dispute settlement. Cambodia and Thailand, who are not claimants, sided with China.

ASEAN’s internal dissension is not lost on Beijing. China too has pointed to the different expectations on how it should negotiate with ASEAN as an organisation, as opposed to its member states. China’s Ambassador to ASEAN Xue Hanqin noted in 2010 that “the work (of discussing draft guidelines for implementing the DOC) got stuck mainly because of the difference over the modality of their (ASEAN member-states’) consultations. The key issue is whether ASEAN Member States should consult among themselves first before they consult with China. ASEAN members insist on such a consensual approach towards China, while the Chinese side does not think this is in line with the under-standing of DOC. The whole issue of South China Sea is not a matter between ASEAN as an organisation and China, but among the relevant countries. ASEAN could serve as a valuable facilitator to promote mutual trust among the Parties, but not turn itself into a party to the dispute” (Severino, 2010, p. 45). China wants these discussions to be bilaterally conducted with ASEAN claimant states, not with ASEAN as a whole. China’s “divide and conquer strategy” was, for some analysts, blatantly on show at the ASEAN Foreign Ministers’ Summit in June 2012 in Phnom Penh. Ironically, the official slogan of Cambodia’s turn as chair of ASEAN in 2012 was, “One Community, One Destiny,” a vision in tatters after the first ever failure of ASEAN foreign ministers to issue a joint communiqué. The Philippines’ insistence (with Vietnamese support) on a reference to China’s recent activities at Scarborough Shoal led to chair of the summit Cambodia, opting not to issue a statement rather than accede to Manila’s demands. Singaporean foreign minister Shanmugam (2012a) considered the failure “a severe dent in ASEAN’s credibility.” The meeting was “an unmitigated disaster due to sharp internal differ-ences” (Valencia, 2012). Singapore’s foreign minister noted that “the lack of a Joint Communiqué reflects disunity within ASEAN. ASEAN unity and centrality are key to the vision of the ASEAN Community. An ASEAN that is not united and cannot agree on a Joint Communiqué will have difficulties in playing a central role in the region” (Shanmugam, 2012b). Cambodian foreign minister Hor Namhong’s explanation that “we are not a tribunal to adjudicate who is right who is wrong’ points to the tensions inherent within the group, between claimant

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and non-claimant states who have differing expectations of the level of support from ASEAN. “What this indicates is that China has managed to break [ASEAN’s] insulation and influence one particular country,” said analyst Carlyle Thayer. Chinese foreign minister Yang Jiechi was quoted to have thanked Cambodia for its “staunch support for China on issues relating to China’s core interests” (cited in Xinhua News, 2012).

Additionally, the procedures of ASEAN summit meetings can also work against it. As Suzuki argues, “In ASEAN, the outcome of its meetings is affected by the interests and attitudes of the chair country because drafting a declaration is finally entrusted to that country. If a dispute exists, a member country inexperienced in hosting meetings often finds it difficult to utilise measures such as prior consultation and the offer of a compromise, resulting in an unsuccessful adjustment of interests” (Suzuki, 2012). Rather than sinister Chinese machinations, Japanese analyst Yamakage (2012) similarly agrees that the problem was more procedural and accidental due to Cambodia’s inexperience in drafting compromise statements. The inexperience of some of its members combined with ASEAN’s decision-making mechanisms has exacerbated “a divergence of views within ASEAN regarding the “ ‘China threat’ ” and since ASEAN makes decision by consensus, this divergence could reappear under stress” (Valencia, 1995, p. 42). The expansion of ASEAN from six to ten members between 1995 and 1999 to include Vietnam, Myanmar, Laos, and Cambodia has made it even more challenging for ASEAN to achieve consensus, especially since three of the four countries have close ties with China, and, “without a direct stake in the dispute, seem unwilling to rock the boat with Beijing” (Storey, 2012, p. 48). This is why Evelyn Goh argued that the “unfinished and urgent task of [ASEAN’s] internal consolidation acts as an important constraint to ASEAN’s ability to play its brokerage role vis-à-vis the great powers and regional order in East Asia” (2012, p. 113). Weatherbee reiterates the point that, “ASEAN’s incapacity to move to a politically integrative level above non-interference and respect for domestic sovereignty suggests that notwithstanding claims of community, interstate relations in the ASEAN region are not really different from relations among states in the world, governed by calculations of national interest and relative power” (Weatherbee, 2005, p. 123).

To make things even more complicated for ASEAN, the region is increasingly attracting attention of the world powers, with the South China Sea dispute embroiled within the maelstrom of larger power plays. The US re-balancing has seen closer military engagements with Vietnam and the Philippines. Japan’s new prime minister, Shinzo Abe, visited


several Southeast Asian countries in his first overseas foray. Tokyo is also donating patrol vessels to Manila and stressed its interest in the South China Sea disputes as a matter of safeguarding sea-lanes of communi-cation. “A great game is being played in this part of the world,” said Japan’s ambassador to ASEAN, Kimihiro Ishikane. “For ASEAN to play an important role, it must keep its centrality – its mind-set of independ-ence” (in Launey, 2012). Surin Pitsuwan identifies the same challenges in store for ASEAN: “We knew the game all along – we need to play this balancing act. We need to serve as a fulcrum of all sorts of power plays in the region” (Launey, 2012). This is why, in November 2012, Pitsuwan told journalists in Phnom Penh that, “ASEAN was seeing the first phase of conflict, competing, and contending interests in the region, ... ASEAN centrality is being tested.” Beijing maintained its support for ASEAN centrality, but Vice-Foreign Minister Fu Ying has also added a caveat: ASEAN playing a role “does not mean that ASEAN should speak for any one country because if ASEAN takes sides, then it will be very difficult” (cited in Goh, 2012).

Implications for ASEAN’s Role in Regional Security

Given the internal divisions within ASEAN as well as pressures from external great powers, the organisation’s claim to “centrality” in managing regional security is coming under scrutiny. ASEAN’s “tradi-tional” stance on conflict management is based on evolving consensus and defusing tensions while stressing non-interference in domestic affairs of member states. Over the years, with engagement on Myanmar and Cambodian domestic political issues and trans-national challenges such as the haze, this stance has been somewhat modified. ASEAN’s experience in conflict management may be assessed with reference to two interrelated domains. First is the intra-mural conflict management comprising of its sub-regional members and second, the extra-mural extending within and beyond the Southeast Asian region (Caballero-Anthony, 1998). If the first poses a thorny enough problem, the second presents a challenge of entirely different magnitude when external powers such as China are involved: “the Association has tried to set aside the problem of sovereign jurisdiction and to focus instead on confi-dence-building and conflict management in an attempt at mitigating the unequal power distribution in the South China Sea ... The difficulty for the Association has been therefore to apply its own model of conflict management and avoidance to a non-member state” (Emmers, 2010, p. 125). It is useful here to consider several key elements of ASEAN’s

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conflict management mechanisms and how they could be of use to the South China Sea disputes.

The 1976 Treaty of Amity and Cooperation (TAC) underpins ASEAN’s conflict management model, that includes the following principles: “Mutual respect for the independence, sovereignty, equality, territorial integrity and national identity of all nations”; “The right of every state to lead its national existence free from external interference, subver-sion or coercion”; “Non-interference in the internal affairs of one another”; “Settlement of differences or disputes by peaceful means”; and “Renunciation of the threat or use of force.” The non-use of force and peaceful settlement are principles contained in the 2002 DOC that China has signed. The TAC contains further specific provisions for convening a High Council comprising ministerial representatives of all contracting parties to a dispute. If all claimants agree, the High Council can convene to recommend appropriate means of dispute settlement, from offering its good offices, or constituting a committee of mediation, to inquiry or conciliation. Rules of procedure for the High Council were agreed upon in 2001, which states that when non-ASEAN signatories are involved in a dispute, the High Council shall include representatives from all ASEAN member states and one representative from the non-ASEAN states. None of the member states of ASEAN have thus far brought a dispute to the High Council, let alone convince China of its merits. Yet, China’s adherence to the TAC in 2003 signalled that Beijing supported ASEAN efforts in forging an informal COC based on self-restraint, the non-use of force and the peaceful resolution of disputes (Emmers, 2010, p. 126). According to Valencia (2012), the ASEAN-agreed elements on the COC in late 2012 reportedly included a dispute-resolution mechanism that first uses the High Council in the TAC, and failing that, the dispute settlement mechanisms of international law, including UNCLOS.

In late January 2013, however, Manila decided to jump the gun, unilaterally, bypassing ASEAN to instead approach the Tribunal of the UN Convention on the Law of the Sea (UNCLOS) to examine China’s nine-dash line claims in the South China Sea. It could ring the death knell for urgent negotiations on the COC with China. Philippine foreign affairs secretary Albert del Rosario explained that, “The Philippines has exhausted almost all political and diplomatic avenues for a peaceful negotiated settlement of its maritime dispute with China. To this day, a solution is elusive. We hope the arbitral proceedings shall bring this dispute to a durable solution” (cited in Today Online, 2013).

The responses of other ASEAN member states suggest that ASEAN’s “centrality” and collective worth as a regional conflict-management


framework is under threat, and smacks of uncoordinated measures between members. Singapore’s Ministry of Foreign Affairs spokesman said pithily, “What the Philippines has done is a national decision. Singapore first knew about this action from media reports” (MFA, 2013). There is little evidence here of any ASEAN consensus or prior consul-tation. Singapore has been at pains to rebut articles in the Philippine Star and Manila Bulletin published on 9 September 2012, claiming that Singapore supported the Philippines’ position in the South China Sea dispute. Singapore’s MFA spokesman was caustic: “We have seen the reports in question. You all know how free the Filipino media is; they can even be very free with the facts. There has been no change to Singapore’s position. When PM Lee met President Aquino on 8 September 2012, he reiterated Singapore’s consistent position, namely that we do not take sides on the merits or otherwise of the various specific disputes in the South China Sea ... Unlike the Filipino media reports you refer to, we deal with facts not fiction” (MFA, 2012).

Manila’s decision to take the Chinese to the UNCLOS tribunal could also possibly fatally undermine the principle of ASEAN centrality, inviting the UN as a global body to wade into a regional dispute that ASEAN has explicitly claimed pre-eminence. In many ways, Manila’s decision should not be surprising given that President Benigno Aquino previously warned that “The ASEAN route is not the only route for us. As a sovereign state, it is our right to defend our national interest” (cited in Alford, 2012). The principle of ASEAN’s centrality to the South China Sea disputes is being questioned by one of its very founding members.

Cambodia, seen as pro-China, claimed in November 2012 that ASEAN had agreed not to “internationalise” the disputes. This was flatly denied by Manila’s foreign secretary Rosario: “How can there be consensus? A consensus is 100 percent. How can it be consensus when two of us are saying we’re not with it?” (cited in Murdoch, 2012). Vietnam also objected. ASEAN’s policy of agreeing to disagree has drawn criticism by those who argue that ASEAN has “promoted the art of conflict avoid-ance, but not conflict resolution” (Jetly, 2003). Some writers suggest that given ASEAN’s recent disarray on the South China Sea, it cannot hope to realistically serve as a multilateral conflict-resolution plat-form for regional security issues. For Jones and Khoo, ASEAN should re-embrace great power politics and engage American help to counter-balance China (Jones & Khoo, 2013). Such views are echoed by Emmers: “the Association cannot operate on its own as an effective source of countervailing power and needs to rely on external military support to constrain China’s actions in the Spratlys” (2003, pp. 149–150). Others

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point to the success of Track-2 diplomacy and informal workshops on the South China Sea such that “the combination of elite interaction and regionalisation has successfully transformed the way China and ASEAN perceive and behave toward each other ... the trustbuilding process is, in itself, a peace-building mechanism, as it increases positive rela-tions and builds conditions for a stable peace” (Weissman, 2010). Yet, China’s signing of the DOC in 2002 was more of a political statement than a legally binding document. As China’s power rises, the resulting power asymmetry and security dilemma imperils the effectiveness of the ASEAN model such that “it is now debatable whether the applied model can mitigate the unequal power distribution problem. Significantly, the changing power distribution has not been matched by further progress in the implementation of conflict management mechanisms” (Emmers, 2010, pp. 127–128).

Conclusion

ASEAN’s awkward situation is aptly summed up by Ramses Amer, “The role that ASEAN can play is a rather complex one, since five of its member-states are involved in conflict situations within the South China Sea proper and four have sovereignty claims to all or parts of the Spratly Archipelago. This creates a situation in which ASEAN cannot play the role of a third-party mediator between the PRC and other claim-ants, as these claimants are member-states of the Association” (2002, p. 123). In 1995, Lee wrote that “ASEAN’s different perceptions of China and especially its own share of disputes in the South China Sea among Malaysia, the Philippines and Brunei would affect the formation of an ASEAN approach. In addition, the priorities of each member state in dealing with the South China Sea issue could be different” (1995, p. 535). Emmers concluded in 2003 that “ASEAN’s influence on the South China Sea dispute is clearly limited” because of its disunity (2003, p. 143).

Events since then have reinforced the accuracy of these observations and the implications for regional peace and security. The stakes are high for ASEAN’s ability to manage the South China Sea disputes: “there is a lot riding on the success of the venture – such as ASEAN centrality in security paradigms for the region, ASEAN solidarity and the tone and tenor of ASEAN-China relations” (Valencia, 2012). Singapore’s leaders are clearly aware that the broader strategic implications of how and whether ASEAN is able to deal with China transcend the South China Sea disputes. As Prime Minister Lee Hsien Loong (2012b) noted, “Many countries are watching us closely. They will read how China deals with


difficult bilateral problems with its neighbours as a sign of what China’s rise means for the world. They will scrutinise ASEAN to see if it can deal with difficult issues effectively. ASEAN and China must not allow this isolated issue to affect their overall positive relationship,” Former secretary-general Surin Pitsuwan summed up the challenge for ASEAN, “Knowing that the region is increasingly being interested and a lot of forces, a lot of players are converging on the region, therefore that prin-ciple of neutrality is extremely important. ASEAN must play a balancing act effectively” (cited in Kyodo News, 2012). Besides maintaining an increasingly fraught sense of unity amongst its members, ASEAN also has to engage with a slew of Great Powers from China, the United States, and Japan on regional security issues. Singaporean leaders have continued to maintain that, “only a united ASEAN can credibly play a central role in engaging major powers towards the common goal of promoting regional peace, stability and prosperity” (Shanmugam, 2012b). The Indonesian foreign minister too noted that in spite of periodic spats, “Indonesia believes we can have more influence if we are united. We need to quickly get ourselves back on track” (cited in Launey, 2012). ASEAN’s ability to present a united front and viable framework for conflict-management over the South China Sea could determine whether regional security is driven by balance of power politics as ASEAN claimant states indi-vidually seek out powerful backers or regionalised consensual arrange-ments that help mitigate the vast power asymmetries between China and smaller states in the region.

Note

1. Some of the information in section has been taken from the author’s confer-ence paper presented at Asia Society in March 2013. See (Heng, 2013).

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The Association of Southeast Asian Nations (ASEAN) is many things to its members. In part, it acts as a security community. Its successful effort in peacefully resolving conflict among its members is a matter of histor-ical record. It has been unable, however, to extend the norms accom-panying this success to managing the South China Sea dispute. Rather than unite in an effort to encompass China in the benefits of a security community, member countries have used the organisation to meet their individual national interests.

This has left the members divided. ASEAN is poorly serving some of its members in the South China Sea; the People’s Republic of China (PRC) is steadily expanding its physical presence in disputed territory at their expense even as it is engaged in the region’s ASEAN-centric diplomatic architecture. For other members, ASEAN is succeeding, by either meeting their narrow national interests or maintaining its broader historical mission to facilitate regional peace and prosperity. Overall, as an organisation, ASEAN’s diplomacy is failing to ameliorate the dispute.

The substance of ASEAN’s engagement with China on the South China Sea has essentially revolved around extension of three objec-tives: negotiation of a code of conduct, application of the UN Convention on the Law of the Sea (UNCLOS), and institutionalising “self-restraint.” Examining ASEAN’s failure on these specific objec-tives is essential to constructing an approach to community building capable of moderating China’s behaviour. This paper looks at each objective in turn and then examines the specific interests of several key members.

5A Critical Assessment of ASEAN’s Diplomacy Regarding the South China SeaWalter Lohman

ASEAN’s Diplomacy Regarding the South China Sea 83

Negotiation of a Code of Conduct (COC)

ASEAN’s hope for finding a solution to the South China Sea dispute that will allow its member countries continued positive relations with China has long revolved around negotiating a regional COC. Under the chair-manship of the Philippines in 1992, its foreign ministers “commend(ed) all parties concerned to apply the principles contained in the Treaty of Amity and Cooperation in Southeast Asia as the basis for establishing a code of international conduct over the South China Sea.” (ASEAN, 1992) (emphasis added). Ten years later, with the most serious of incidents at Mischief Reef (1995) occurring in the intervening period, it could still not reach agreement with China on a CoC.

Instead, in 2002, ASEAN settled for a non-binding “Declaration on Conduct of Parties in the South China Sea” (DoC). In negotiations with ASEAN, China had objected to specific reference to the Paracel Islands, physical claim to which it had consolidated in 1974. In turn, without precision concerning the area subject to the agreement, questions were raised over whether the CoC could be legally binding. Thus, according to the ASEAN secretary general at the time, Rodolfo Severino, the agree-ment was left to apply to the South China Sea in general and made a political “declaration” as opposed to a legally binding “code” (Severino, 2010). This catch-22 continues to be a barrier to agreement on a COC today. China objects to a legally binding code by stipulating a condi-tion – disregard for Vietnam’s interests – that ASEAN cannot possibly honour.

ASEAN acceded to another Chinese demand in the “DoC” that has since haunted its efforts to engage China effectively on the dispute. The 2002 declaration clearly stipulates that “territorial and jurisdictional disputes” should be resolved “through friendly consultations and nego-tiations by sovereign states directly concerned” (ASEAN, 2002). There is no way around China’s continued insistence on the word of the agreement. As written, the declaration gives the PRC strong grounds for barring ASEAN-China discussion of the territorial disputes them-selves, and plausible grounds, when it suits its purpose, to argue against engaging ASEAN as the “means” of conflict management.

Interested ASEAN states have tried to recoup this position almost from the moment it was conceded. Development of guidelines to imple-ment the DoC have been deadlocked for nine years on ASEANs interest in what it sees as the multilateral spirit of the agreement. (After all, all ASEAN members – claimant and non-claimant – were signatories to the 2002 agreement). ASEAN continues to seek multilateral, ASEAN-based

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mechanisms for managing the disputes in order to offset the PRC’s powerful advantages. The effort to draft guidelines only concluded in 2011 when ASEAN relented on its insistence on prior consultation among its members (Thayer, 2012). As a result, having failed for almost 20 years to conclude a code of conduct for the South China Sea, ASEAN settled for yet another aspirational reference to it in a document that ultimately only calls to implement joint cooperative activities and confi-dence building measures.

Negotiations of a COC is now the central element around which almost all regional diplomacy on the South China Sea, including America’s, revolves. Hope for its eventual realisation – preferably in time for ASEAN’s November 2012 Summit – became a relief valve when the preceding July meeting of the ASEAN foreign ministers (AMM) in Phnom Penh collapsed. (It will be remembered that for the first time in 45 years, due to the refusal of the Cambodian chair to incorporate references to the South China Sea reflective of the proceedings and implicitly critical of China, the AMM failed to produce a joint commu-niqué summarising its proceedings.) “The Statement of ASEAN Foreign Ministers on ASEAN’s Six-Point Principles on the South China Sea” produced by Indonesian foreign minister Marty Natalegawa’s subse-quent round of damage control shuttle diplomacy prominently lists “the early conclusion of a Regional Code of Conduct” as among its six points. There was some hope that it would be addressed during then-expected working level meetings that advanced the November Summit and perhaps approved at the Summit. That did not occur – despite an Indonesian supplied draft and support of other ASEAN members. Although the Chinese remained nonchalant to the idea of a COC (Thul, 2012), ASEAN, including its 2013 Chair, Brunei, and new secre-tary general of ASEAN Le Luong Minh, have continued to emphasise its central role in management of the South China Sea problem (Brereton-Fukui, 2012).

Application of United Nations Convention on the Law of the Sea (UNCLOS)

The 2012 ASEAN foreign ministers statement brokered by Minister Natalegawa also listed among its principles “the full respect of the universally recognised principles of international law, including the 1982 United Nations Convention on the Law of the Sea.” The Chairman’s Statement from November 2012 made a similar reference to UNCLOS in its discussion of the South China Sea.


Beginning with the ASEAN Ministerial Meeting Communique of 1996, ASEAN documents are replete with reference to the critical importance of UNCLOS in the management and resolution of the South China Sea dispute. However, as Amitav Acharya points out in Constructing a Security Community in Southeast Asia, from the beginning of its engagement with ASEAN on the issue, China has been ambivalent. During the 1995 ASEAN Regional Forum (ARF) meetings in Brunei, the Chinese both committed for the first time to the application of UNCLOS and repeated its contra-dictory, extra-legal formulation of “indisputable sovereignty over the islands and their adjacent waters” in the South China Sea (Acharya, 2009).

The 2002 DoC formally committed China to resolving “territorial and jurisdictional disputes ... in accordance with universally recog-nised principles of international law, including the 1982 Convention on the Law of the Sea.” More than ten years since then, however, the crux of the problem continues to be the Chinese claim to terri-tory encompassed by its nine-dash map, and the routine reference to sovereignty over waters “adjacent” to its “island” claims – neither of which declarations has any standing in international law. The Chinese have left the legal relationship between these formulations, vague. The political status of the nine-dash map, however, is quite clear; in 2009, the PRC included it as part of in a Note Verbale to United Nations Secretary-General Ban Ki-Moon protesting Vietnamese and Malaysian submissions to the UN Commission on the Limits of the Continental Shelf.

In January 2013, the Philippines initiated proceedings for an arbi-tral panel under UNCLOS, which if it proceeds, has the potential to settle this contradiction. The Philippines is challenging “the validity of China’s nine-dash line claim to almost the entire South China Sea (SCS) including the WPS (West Philippines Sea) and to desist from unlawful activities that violate the sovereign rights and jurisdiction of the Philippines under the 1982 UNCLOS.” It is a very carefully drafted document. “Sovereign rights” does not refer to territorial sovereignty over land features in the South China Sea claimed by the Philippines but to rights that accrue to the Philippines by virtue its continental shelf and other “maritime zones.” (Republic of the Philippines, 2013)

On 19 February 2013, citing legal and historical inaccuracies, the Chinese ambassador to Manila rejected the Philippines’ initiative. UNCLOS procedures for arbitration allow the case to proceed and the Philippines has formally indicated that it will continue to pursue it

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without Chinese cooperation. Whether the panel accepts jurisdiction, how it finds, and whether China abides by an adverse finding will deter-mine whether ASEAN’s emphasis on UNCLOS over these 20 years was the right approach. Depending on how the arbitral panel finds, the case will also reveal how ASEAN regards its own principles and how its members weigh these principles against their individual interests in their respective relationships with the PRC.

Initial reactions to the Philippines case from ASEAN and its constit-uent members have been cautious (Torode, 2013). They have generally recognised the role of UNCLOS and acknowledged that the Philippines is within its rights to appeal to it. Nothing in their reactions, however, can be construed to constitute “support” for the Philippines. Certainly, any expectations that the organisation as a whole would support the Philippines are wholly unfounded under the circumstances. In fact, the organisation and its principle stakeholders appear more interested in insulating ASEAN and the on-going discussions about a COC from fallout from the Philippines’ initiative.

Exercising Self-Restraint

In the 2002 DoC, the members of ASEAN and China agreed to “exercise self-restraint in the conduct of activities that would complicate or esca-late disputes and affect peace and stability.” This, as it relates to the use of threat to the use of force, is a central ASEAN norm and the heart of any effective security community. It was formalised in the 1976 Treaty of Amity and Cooperation in Southeast Asia (TAC) and the ASEAN Charter. China, it should be noted, became a signatory to the TAC in 2003.

After many mostly quiescent years following the conclusion of the DoC and China’s accession to TAC, the situation began to heat up in 2009. Following Chinese confrontations with American naval vessels, the USNS Impeccable and the USS John McCain, there were a handful of incidents involving Vietnam and Indonesia. Then in 2011, compli-cating Chinese “activities” vis-à-vis other parties to the dispute, became routine. Indeed, it is this stepped up activity that has driven the esca-lation of the dispute and the regional response. There were 13 provo-cations by the Chinese in 2011, mostly involving the Philippines and Vietnam, and seven incidents in 2012.

These incidents range from warning shots to cut cables and unilat-eral fishing bans to the promulgation of imposing maritime regulations. A prominent flare up was the two-month long stand-off between the Philippines and China over Scarborough Shoal in 2012. The dispute


ended when the Philippines, believing it had reached mutual agree-ment to withdraw government vessels, left the vicinity of the shoal. The Chinese side failed to withdraw and remain at the shoal today blocking Filipino fishermen from entering the waters partially enclosed by the shoal.

All that can be said of the timing of Chinese provocations to date is that they do not occur in the immediate lead up to or during the AMM or ASEAN Summits and often immediately follow them. Several incidents occurred in February and March of 2011, none in April, but six followed the Summit in Jakarta that May. The Scarborough standoff began in April immediately following the Summit and was resolved – albeit by the Philippines’ withdrawal – the month before the July AMM 2012 meetings. The flare-ups with the Vietnamese in 2012 also occurred in June prior to the AMM; the announced establishment of a garrison on Woody Island (China, 2012) occurred in July, just after the meetings. There were no incidents between the 2012 AMM and the Summit in November, a period of much anxiety over ASEAN’s diplomatic perform-ance and a time where China held out the prospect of negotiations over a COC. Two incidents, however, immediately followed the November 2012 Summit. The latter incidents included the Chinese announcement regarding its rights to search ships in its territorial waters. The data is too limited to establish a trend and the internal Chinese dynamics behind these incidents may be complex, but it is a correlation worth watching.

It is not clear what has led to the stepped up Chinese activity – essen-tially an abandonment of what had been universally praised a highly effective “charm offensive” begun around 1997 (Lohman, 2010). What is apparent is that signing China onto the ASEAN norm of self-restraint has not resulted in China honouring it. ASEAN has yet to formulate a sufficient response to this state of affairs. There is no reason to believe that reaffirming the norm of “self-restraint and non-use of force by all parties” as ASEAN does in the 2012 statement of principles will have any impact on Chinese activity.

Divergent ASEAN Member Interests

Extension of ASEAN’s non-confrontational, consultative diplomatic style to engaging China on the most serious security problem facing the region today has clearly failed to ameliorate the situation. It has failed for the same reason ASEAN has persisted in the face of failure: Divergent interests among ASEAN members. Unable to reconcile the interests of its members, ASEAN has defaulted to a lowest common denominator

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policy of appealing to principle – without regard to its observance. This serves the interest of those members with little or no stake in the South China Sea. It also serves the interests of those in the middle of the spec-trum, for example, Singapore and Indonesia, whose overriding priority is protecting the organisation from long-term damage. For others, espe-cially the Philippines, the appeal to principle leaves them few options but to solicit support from outside ASEAN.

All ASEAN members are to some degree, interested in China’s deep-ening economic involvement in the region. Over the course of 2012, China-ASEAN trade increased by more than 10%to reach an all-time high of over US$400 billion (Jiabao, 2013). China is now ASEAN’s largest trade partner.

On the investment side, according to Heritage Foundation’s China Global Investment Tracker (Scissors, 2013), Chinese investment in ASEAN reached roughly US$72 billion in 2012 (Scissors, 2012). Unlike ASEAN’s own figures, including construction and engineering contracts, this figure accounts for China’s broader footprint and the realisation of Chinese loan proposals. ASEAN is now the number one global destina-tion for Chinese investment – attracting half again as much investment as the United States and Australia.

The aggregate numbers are impressive, but not instructive. To better understand the impact of ASEAN’s collective interests in China, the tangible interests of key members must be taken into account. This is all the more so when one considers the disproportionate share absorbed by ASEAN’s less developed and smaller members. Whereas ASEAN as whole would appear to have an economic interest in tranquil ASEAN-China relations, some members are more heavily interested than others. Given ASEAN’s consensus-based processes and the power of its rotating chair-manship, those with disproportionate interest in placating China are in position to win the day.

Recent Past Chairs: Cambodia and Brunei

This reality was clearly on display over the course of Cambodia’s 2012 chairmanship of ASEAN. Although Cambodian exports to China consti-tute a negligible share of ASEAN’s total, in 2012, it trailed only Indonesia in attracting Chinese investment. There would seem to be ample corre-lation between Cambodia’s behaviour in 2012 and its stake in relations with China. First, there was the impasse during the July Foreign Ministers Meeting (AMM) concerning how to characterise discussion of the South China Sea in the final communiqué. Eyewitness participants in the meeting report multiple drafts passing to parties outside the meeting


room and returning with objections. The broad consensus, not only in media reports, but also in serious analysis (Emmerson, 2012) and in ASEAN diplomatic circles, is that Cambodia was actively consulting the Chinese on the substance of the document. Then there was the dispute over the Chairman’s statement at the November ASEAN Summit. The first draft proffered by Cambodia was widely objected to by ASEAN members for mischaracterising the Summit’s discussion (Ramesh, 2012) as having reached agreement on the need not to internationalise the dispute, a formulation identical to the Chinese position. In the end, Cambodia backed down and ASEAN agreed to its boilerplate language on the dispute, stressing the importance of a code of conduct, albeit implicitly through reference to the Six-Point Principles on the South China Sea; the centrality of UNCLOS; and self-restraint.

Non-claimant states – especially those like Cambodia that have weak historical connections to ASEAN – have no interest in playing hardball on an issue that could impact much more direct economic interests. However, even the claimant states, and those with much longer ASEAN experience, vary in terms of priority and how seriously they are prepared to press the Chinese.

Brunei’s 2013 chairmanship has been an instructive test case in this regard. Unlike Cambodia, Brunei’s economic stake in its relationship with China, while substantial, does not appear determinative. Brunei makes up less than 1% of ASEAN’s exports to China. Its exports to China are small even considering its small size and concentration in energy. Oil and natural gas make up for 90% of its total exports. Yet, China takes less than 5% of its exports (CIA, 2013). On the investment side, the Investment Tracker shows a total of US$2.5 billion in Chinese invest-ment, reflecting the first stage of an enormous US$6 billion private investment in a petrochemical plant (Darussalam, 2012).

With or without regard to economic leverage – or perhaps because its economic interests are so deeply embedded in its diplomatic culture – Brunei’s has a rich recent history of close relations with China (Storey, 1969). It is also thoroughly steeped in the ASEAN-way of diplomacy. While it is a claimant state in the South China Sea, Brunei’s modest claim makes it the least vocal of any of the parties. Any expectations that its status as a claimant state will make it more effective or confron-tational toward China are misplaced. Media reports indicate that Brunei will make the COC a priority (Bagawan, 2013b). It will likely focus its diplomatic energy on ensuring a smooth approach to negotiations, a no-surprise chairmanship with no major disputes or initiatives. A chairmanship year that ends with no COC, but also no drama, will be

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counted a victory in Brunei. Its support for the prerogatives of the Chair in Phnom Penh during the July AMM is an indication of the deference it will expect for its own approach. Other ASEAN members, even the Philippines, will be hard pressed to foil these expectations.

Claimants: Philippines and Vietnam

For twenty years, the Philippines has been the most aggressive among ASEAN claimants in pressing its case. This, of course, is because it has major sovereignty issues and resources at stake, and along with Vietnam, has borne the brunt of Chinese encroachment. It also has a smaller economic stake in relations with China than many other members do.

On the trade side, exports from the Philippines to China represent only 5% of ASEAN’s total (ASEAN, 2012), and 12% of Philippines’ total exports (Republic of the Philippines, 2012) – trailing both the United States and Japan as destinations. In some cases, the Philippines has proven that a dependence can be diluted further by resort to new markets. During the Scarborough Shoal impasse, the Chinese blocked banana exports from Philippines, about 1.5% of Philippines exports to China. By value, although Filipino exports to China are dominated by the electronic sector, bananas are not tied to global supply chains, they have short shelves, and the impact of disruptions on local communities can be acute. Part of what made bananas an attractive target – simple path to market – also made it an easier problem to deal with. Directed by President Aquino to find new markets, the Philippines made up for the loss by redoubling efforts to underperforming markets – resulting in a doubling of total banana exports by year end (Galvez, 2013).

On the investment side, since 2007, the Investment Tracker shows Chinese investment in the Philippines dwindling to the point that it records no new investments for 2011–2012 (Scissors, 2013).

The Vietnamese relationship with China is more complex. Vietnam shares a border with China, a very long history, and party-to-party contacts that complicate its approach. Vietnam shifts between tactics in maritime disputes with China. When pressed by its much larger neigh-bour, it often finds common cause with the Philippines and helps galva-nise action within ASEAN. The highpoint in this regard was Vietnam’s turn at the ASEAN Chair in 2010 when it very prominently featured the South China Sea on the ASEAN agenda. At other times, it seeks a more conciliatory direct approach with the Chinese. The best example of the latter is the very high profile party-led visit to Beijing in the fall of 2011. During that visit, after a very difficult year at sea for China-Vietnam relations, the two sides reached agreement on a set of “basic principles


on settlement of sea disputes” – the signing ceremony for which was formally witnessed by the secretary generals of each nation’s communist party (Hong’e, 2011).

On the economic side, China is Vietnam’s biggest trading partner (H.C., 2012). Vietnam sends a slightly larger share of ASEAN’s exports to China than the Philippines. Its economy, however, measuring by trade as a percentage of GDP is far more dependent on trade. It is among ASEAN’s most trade dependent, while the Philippines is among its least. China, according to 2011 figures, is Vietnam’s third-leading (behind the European Union and the United States) export market, taking 11.6% of its exports in 2011(GSOV, 2011). China makes up 23% of Vietnam’s imports (GSOV, 2011). Vietnam is second only to Indonesia as host to Chinese investment with a total of $8.9 billion.

Non-Claimants: Indonesia and Singapore

By the end of 2010, ASEAN members were having their doubts about the assertive side of Vietnamese diplomacy. They were eager for a return to more conciliatory leadership. Indonesia’s chairmanship in 2011 fulfilled their hopes. It focused heavily on reaching a COC.

Indonesian rights in the South China Sea, particularly in the vicinity of Natuna Island, are potentially impacted by China’s nine-dash map. It is however, not generally regarded – and does not regard itself – as a “claimant.” It has led ASEAN on these issues on the basis of reassurance offered by Chinese Foreign Minister Qian Qichen in 1996. Indonesia is occasionally drawn into the dispute, as in 2010 when it officially objected to the 2009 Chinese Note Verbale referencing the nine-dash map. However, with its direct interests generally assured and these inci-dents few and far between, it has focused its effort on demonstrating ASEAN’s competence and long-term value. ASEAN was created in large part to accommodate Indonesian leadership. For this fundamental reason, Indonesia’s priority is in maintaining ASEAN as a going concern far into the future – the current impasse in the South China Sea seen as just one of many it has dealt with over the last 40-plus years.

Despite its long history of ASEAN leadership and statesmanship, however, it cannot go without noting that smoothing over regional differences with China also appear to dovetail with Indonesia’s economic interests. As previously noted, Indonesia receives by far the greatest level of investment from China among ASEAN members – a total of US$25 billion (almost three times as much as the next biggest investment desti-nation, Vietnam). The lion’s share of this investment has occurred over

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just the last three years. On the trade side, Indonesia is one of ASEAN’s leading exporters. The China market is no exception (ASEAN, 2012).

Singapore, a small city-state, is on the opposite side of ASEAN’s secu-rity community. Indonesia is the giant that must be tied into ASEAN; Singapore is the country that has the most to lose if ASEAN and the security it has engendered breaks down over the South China Sea. More directly related to the current impasse over the South China Sea, Singapore has conflicting interests. On the one hand, China is Singapore’s biggest investment market in Asia – attracting 19% of its investments abroad (DOSS, 2012). It is also by far ASEAN’s biggest exporter to China. On the other hand, Singapore’s maritime trading position and heavy reliance on trade (its trade to GDP ratio is over 300%) gives it a major interest in freedom of navigation. To the extent that the freedom of navigation is jeopardised by the tensions created by China’s expansive claim – or the reaction to it by the other claimants, for that matter – key Singaporean interests are triggered. As a result, Singapore traditionally holds to a middle ground within ASEAN, supportive of the organisation, but not necessarily supportive of its colleague’s claims or initiatives.

In 2011, citing “serious concerns in the international maritime community” caused by the ambiguity of Chinese claims, its foreign ministry issued a very public statement calling on China to clarify its claims in the South China Sea (Embassy of the Republic of Singapore, 2011). It did so after Chinese reporters embedded on a Chinese maritime surveillance vessel en route to a routine port call in Singapore embar-rassed the Singaporeans by putting its voyage in the context of China’s territorial claims (Wain, 2011). In 2013, Singapore’s official reaction to the Philippines’ decision to submit its case against the nine-dash map was much less pointed and does not even mention the PRC. Again put in an awkward position, the Singaporean Foreign Ministry expressed strict neutrality with regard to the merits of the case; it reiterated the importance of UNCLOS and the need for “all parties (to) refrain from provocative behaviour that could raise tensions” (MFAS, 2013). During the July 2012 AMM impasse, Singapore played a central role in brok-ering a compromise acceptable to Vietnam and the Philippines, only to be rebuffed by Cambodia (Thayer, 2012). The fact that Cambodia rejected a solution Singapore was party to, underscored the perception of Cambodian unreasonableness.

Other ASEAN Players

ASEAN’s consensus based diplomacy means that all its members have a voice in how it addresses the South China Sea issue. All fit somewhere


along the spectrum outlined above between China-deference and heavily interested claimant state. Malaysia is a claimant state, but a careful one with less at stake in the dispute than the Philippines and greater economic stake in its relationship with the PRC. It will also be chair of ASEAN in 2015. It is a great honour for it to chair ASEAN during its target year for formalising the achievement of economic community, political security community and socio-cultural community. Neither it nor any other member of ASEAN – perhaps with the exception of the Philippines – will allow the issues surrounding the South China Sea to disrupt that commemoration. In the meantime, it will stay in the middle of the spectrum.

Thailand is on the China-friendly line side of the ledger, having no direct stake in the dispute and major interests in two-way trade and investment with China. As official coordinator of ASEAN-China for the next three years, it is investing heavily in diplomacy and keen to separate the specific country-to-country disputes from ASEAN’s broader diplomatic approach. At the same time, its reaction to the Philippines UNCLOS case did explicitly acknowledge Philippines’ right to pursue arbitration (Bangkok Post, 2013). Thailand’s diplomatic tradition, while at times China-deferential or even-handed, is too proud to allow its economic interests to push it over the line into Cambodia-like fealty.

At the time of writing Myanmar is the ASEAN chair, Malaysia and Laos will chair ASEAN in 2015 and 2016 respectively. Neither have active interest in the South China Sea. Combined with their minimal interest in freedom of navigation and brief histories with ASEAN, their inter-ests in relationship with the Chinese are relatively strong. In the midst of a historic reform effort and approaching national elections in 2015, Myanmar will not have much bandwidth for drama over what is for it a minor issue. As for Laos, 2016 is a long way away. When its turn comes, at best, it will be a non-controversial steward of the chair. At worst, it will reflect the increasing economic interest China is showing in the small country. In 2011, Laos was second only to Indonesia as a Chinese investment destination. Until they assume their chairman-ships, these countries are marginal players willing to go along with the ASEAN consensus.

Conclusion

At one level and in the estimation of several of its members, ASEAN has succeeded in its handling of the South China Sea dispute. Indeed, from the perspective of some members – Cambodia, for example – it

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is succeeding very well. The interests of other non-claimant states are mostly served by preservation of ASEAN unity, whatever the resolution of the territorial dispute with China. ASEAN’s current approach, however, does not serve the material interests of all its members – especially the Philippines and Vietnam. It is failing in this regard because its model for engaging China is incapable of reconciling the divergent interests of its members. Its approach allows China to exploit its differences, and its preference for long-term consensus building provides China the time it needs to meet its territorial objectives.

ASEAN has sought to position itself as the centre of East Asian region-alism. To remain relevant in this regard, it must recalibrate its effort at building a regional security community by seeking a greater outside balancing presence. It can only do this by further internationalising the dispute. It should not only invite outside parties to the ASEAN table, key members should encourage them to raise the most difficult issues. The high water mark for American policy in Southeast Asia was Vietnam’s chairmanship year, 2010, when Secretary Clinton brought matters to a head in Hanoi. This assertiveness became problematic when ASEAN members broke rank and subsequently discouraged such engagement.

ASEAN should do more than pay lip service to international law; it should endorse the efforts of its members, like the Philippines, when it formally appeals to it. It should also put the necessary pressure on China to work within an ASEAN-centric framework by preparing the possibility of an international conference to reach agreement – if not on conflicting claims, then on the best mechanisms for managing them. This may mean involving only a subset of interested ASEAN members who can then find mechanisms for reporting back into ASEAN.

ASEAN’s security community is essentially a reality. Among its members, it has prevented serious armed conflict or status-quo altering threats of force for more than 40 years. Its approach to extending that success to China in the South China Sea dispute has failed in each of its key priorities: reaching a code of conduct, appeal to UNCLOS, and imparting a norm of self-restraint to the Chinese. Over time, this failure will cost some ASEAN members dearly, enough to lessen the commit-ment they currently invest in it and damage its broader value. In the end, engagement of China in some sort of ASEAN-centric security community that incorporates outside powers, particularly the US and its allies may be the only long-term framework for peace and security. ASEAN will not, however, make that happen with its current approach. It is likely to undergo more discord before it will forge the lasting basis for less.


References

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Part IV

Regional Perspectives

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The Philippine decision to place its South China Sea maritime dispute with China under the compulsory arbitrations process of the United Nations Convention on the Law of the Sea, has, arguably enhanced the complexity of the two-decade-long multi-party dispute. It highlights the challenges of developing a “rules-based regime” by introducing binding international legal process to the already convoluted and multi-layered issue. Less than a month after receiving the Philippines’ Notice to Arbitrate along with its Statement of Claims at the Chinese Embassy in Manila on 21 January 2013, Beijing informed Manila that it was rejecting arbitration and urged instead a return to bilateral consultations and negotiations (GMA News, 2013). Manila’s decision was driven by fears of its inability to effectively counter Beijing’s increasing assertiveness in pursuing its claims. Seeking to gain international support while reducing its impact on overall Philippine-China relations, Manila insists that arbitration is “the most peaceful, durable and lasting solution” to their maritime disputes. However, far from easing tensions, it is raising even more complex legal, political, and security issues, and untangling them is critical to the management of the disputes and the maintenance of stability in the region.

This chapter seeks to contribute to an understanding of the Philippine perspectives on the South China Sea disputes. It also argues that the South China Sea dispute cannot be solely resolved under the United Nations Convention on the Law of the Sea (UNCLOS). Even where it helps in clarifying the nine-dash line and the status of reefs and rocks, any decision will largely be political in its impact, subject to further bilat-eral negotiations. This is mainly due to China’s refusal to participate and the lack of an effective enforcement mechanism under the UN system.

6Philippines’ Approaches to the South China Sea Disputes: International Arbitration and the Challenges of a Rule-Based RegimeAngelo A. Jimenez

100 Angelo A. Jimenez

It starts with an outline of the Philippines legal framework, particularly showing its efforts to align its maritime claims with UNCLOS. It then explains the development of its political efforts within the Association of Southeast Asian Nations (ASEAN) framework, centred on the devel-opment of a binding code of conduct, and its diplomatic and bilateral consultations and negotiations with Beijing for decades. It argues that the failure of both tracks to prevent China’s “creeping” occupation and aggressive exercise of its jurisdiction in the disputed areas has led to the arbitration case. The paper also adds a section on how the 2012 Scarborough Shoal incident resulted in greater domestic political support for increased defence spending by the Philippines leading to enhanced security cooperation with the United States thus, sharpening US-China rivalry and adding to regional insecurity. The chapter concludes by stating that peace and stability in the region now depends on ASEAN leadership in establishing a binding Code of Conduct.

The Philippine Legal Framework

Understanding the Philippines’ approaches to the South China Sea disputes starts with a basic appreciation of the legal framework that supports its territorial and maritime claims. According to the Philippine Constitution, “national territory” comprises of the Philippines archi-pelago and “all the other territories over which the Philippines has sovereignty or jurisdiction.”1 The phrase “sovereignty or jurisdiction” supports the legal architecture of the Philippine claims to the Kalayaan Island Group (KIG) and the Scarborough Shoal, including the setting of its archipelagic baselines that is central to the South China Sea dispute.

The KIG, composed of 53 islands, reefs, cays, and shoals, is a Municipality under the western Philippines Province of Palawan, created under Presidential Decree 1596, signed in 11 June 1978.2 This particular law based its claim to the KIG on the following grounds: its vitality to the security and economic survival due to proximity to the Philippines; the fact that they form part of the “continental margin” of the Philippines archipelago; “they do not belong to any state or nation (terra nullius), but by reason of history, indispensable need, effective occupation and control established under international law” the areas belong to the Philippines; and finally, that “the claims of other states have lapsed by abandonment. On 20 May 1980, the Philippine government registered this claim with the United Nations Secretariat, with a technical descrip-tion of Kalayaan.

Historically, the KIG was “discovered” between 1947 and 1956 by a Filipino navigator and entrepreneur, Tomas Cloma, who named it

Philippines’ Approaches 101

“Freedom Land.”3 He ceded it to the Republic of the Philippines in 1974. Separately, the Philippines also demanded possession of these islands in 1947 from the victorious allied forces on the ground of national security (Banlaoi, 2011). Japan occupied them during World War II and used the islands to invade the Philippines. The Philippines raised this claim with the United Nations General Assembly in the 1950s and has occupied some of the islands since 1968 (Banlaoi, 2011).

The Scarborough Shoal, known as “Bajo de Masinloc” or “Panatag Shoal” in the Philippines, is part of the Municipality of Masinloc in the province of Zambales. The Philippine claim to the shoal is divided into its rock and maritime features. The claim on the former is based on “effec-tive control and jurisdiction,” while that on the latter is based on the fact that it forms a part of the Philippine continental shelf and are also within the Philippines Exclusive Economic Zone (EEZ) under UNCLOS.4

The baselines of the KIG and Scarborough Shoal were not included in the new baselines drawn by the plans under Republic Act No. 9522, signed on 10 March 2009. The new law was enacted to amend the original, pre-UNCLOS, 1961 Philippine baseline law,5 (as amended in 1968), to make the Philippine baselines compliant with the UNCLOS.6 Significantly, the new law provides that the baseline for the KIG and Scarborough shall be determined as “Regime of Islands” consistent with Article 121 of the UNCLOS.7

In 1982, the Philippines signed UNCLOS where it pushed strongly for the concept of archipelagic waters, along with Indonesia. In 1978, the Philippines already enacted Presidential Decree 15998 establishing its EEZ, and has yet to amend the 2009 baselines law to reflect the changes.

Finally, in 2012, the Administrative Order Number 299 was signed to help clarify the maritime areas covered by Philippines. It limits its claims to those waters “on the western side of the Philippine archipelago to include the Luzon Sea as well as the waters around, within and adja-cent to the Kalayaan Island Group and Bajo De Masinloc, also known as Scarborough Shoal.”10 It was deemed necessary in the light of the new baseline law from which the 200 Nautical Mile EEZ provided for under Presidential Decree 1599, signed in 1978, will now be measured. The intent was to promote greater understanding of the Philippines claim by defining it and giving it a name distinct from the larger South China Sea, which it does not claim in its entirety.

Manila’s Three-Track Approach

Manila has formally adopted three key approaches to the South China dispute. The political focus of these approaches includes pushing for


a binding code of conduct under the ASEAN framework, while also developing its legal option through the dispute settlement under the UNCLOS. Since the 1995 Mischief Reef incident, it has engaged Beijing through numerous bilateral consultations and negotiations (Del Rosario, 2012).

The ASEAN has consistently been central and indispensable to the Philippine diplomatic and political effort to develop a rules-based approach in managing the South China Sea conflict. Since the 1992 ASEAN Declaration, the establishment of a legally binding code of conduct binding has been the main focus of Philippines’ political efforts within ASEAN.

The ASEAN Declaration on the South China Sea was signed during the meeting of ASEAN Foreign Ministers chaired by Manila on 22 July 1992.11 Manila steered the Declaration through to its signing.

The 1992 ASEAN Declaration emphasised that all sovereignty and juris-dictional disputes be resolved “by peaceful means, without resort[ing] to force,” and urged all parties to “exercise restraint.” On endorsing this functional approach without much emphasis on issues of sovereignty and jurisdiction, the parties agreed to “explore the possibility of coop-eration in the South China Sea relating to the safety of maritime navi-gation and communication, protection against pollution of the marine environment, coordination of search and rescue operations, efforts towards combating piracy and armed robbery as well as collaboration in the campaign against illicit drugs” (ASEAN, 1992). The 1992 ASEAN Declaration also called for the establishment of a “code of international conduct (COC) over the South China Sea” based on the Treaty of Amity and Cooperation (TAC) in Southeast Asia, signed in Bali, Indonesia on 24 February 1976.12 By specifically basing it on this Treaty, the ASEAN Foreign Ministers in 1992 explicitly indicated interest in developing a binding COC. The ASEAN Declaration was preceded by the launching of informal workshops on the same subject initiated by Indonesia in 1990, followed by the establishment of the ASEAN Regional Forum (ARF) which had its first ever Ministerial Meeting in 1994.13

The mood of guarded optimism raised by the declaration soon confronted reality. In March 1995, the Philippines raised a protest when it discovered Chinese-built concrete structures in Mischief Reef, or Meiji Jiao, located about 209 kilometres west of Palawan province. Mischief was a regular shelter for Filipino fishermen and well within the Philippines’ claim (Severino, 2012, p. 40).

On 18 March 1995, immediately after the Philippine protest, the ASEAN Foreign Ministers issued a statement expressing its “serious


concern” and called on the parties to refrain from further destabilising actions. It also called for an early resolution in Mischief Reef and, finally, to undertake cooperative activities to “increase trust” and “promote” confidence” (Severino, 2012, p. 42).

The Mischief Reef incident provided further impetus for a COC to manage the conflict and prevent an escalation of tensions. It also brought home the weakness of an ASEAN initiative that does not formally include the region’s dominant actor and claimant – China.

The adoption of a COC pursuant to the 1992 ASEAN Declaration became a focus of the Philippines’ diplomatic and political efforts to challenge further Chinese occupation in the Spratlys. In July 1996, ASEAN adopted the concept of a COC as a basis for “long term stability” (Severino, 2012, p. 44). By 1999, it already agreed on a draft, which was later consolidated in 2000, this time with Chinese participa-tion.14 The draft COC is still to be agreed upon by ASEAN and China foundered on several contentious issues that continue to affect it to this day. As former ASEAN Secretary General Rodolfo Severino stated, Vietnam wanted to include the Paracels in the geographic coverage of the COC, over Chinese objections. Attempts to fudge this issue by using the general term South China Sea to define the coverage led to further debates on the “binding” character of an agreement that has no precise area of coverage (Severino, 2012, pp. 44,45). Furthermore, Beijing objected to the ASEAN member-states’ “consensual approach” and insistence on consulting among themselves first. It insisted that the disputes are a matter of bilateral concern between claimants, and ASEAN as an entity is not party to it. Finally, the commitment to refrain from further occupation of the uninhabited features of the South China Sea, given the manner with which the Mischief Reef incident unfolded, became unsettling. Furthermore, as Severino also noted, the commit-ment against further occupation did not include enhancements on existing structures most of the claimants already built (Severino, 2012, p. 44). The sheer failure in resolving all the contentions associated with a COC, China and ASEAN members later agreed upon a non-binding political statement called the Declaration of Conduct of Parties in the South China Sea (DoC) in Phnom Penh in 2002.

The 2002 DoC called for more confidence building measures and voluntary cooperative activities. It reaffirmed the need for a code of conduct, a matter that had already dragged on for seven years without success. It took over two more years just to reach an agreement on the draft terms of reference of the ASEAN-China Joint Working Group for the implementation of the DoC. ASEAN finally tabled the draft for


discussion in August 2005, but it again stalled over the Chinese objec-tion to ASEAN’s practice of consulting each other before hand. As analyst Carlyle Thayer noted, it took “another six years of intermittent discus-sions and twenty-one successive drafts to be exchanged before final agreement was reached.”

The Guidelines to Implement the DoC were finally agreed upon in July 2011, after China convinced ASEAN to drop the practice of “prior consultation” among them.15 This process took almost 20 years from the signing of the 1992 ASEAN Declaration, and almost ten years from the time the signing of the DoC for ASEAN and China to agree on the imple-mentation guidelines. Despite this, ASEAN and China remain far from getting a binding COC. Instead, Chinese assertiveness over its claims of sovereignty and jurisdiction covering almost the entire South China Sea has only began increasing.

Thayer writes that the signing of the implementing guidelines for the DoC in 2011 revived interest in the Philippines-initiated COC. However, when ASEAN started working on a draft COC again, China attempted to put if off another time, insisting that the priority should remain on DoC guidelines. In 2012, after ASEAN started discussing an informal working “Draft Code of Conduct” circulated by the Philippines, Beijing insisted on its participation. This Hanoi and Manila was strongly opposed this on the grounds that such participation during the deliberations in 2012 would allow Beijing not just to influence the draft’s content but also its progress. After heated discussions, the parties reached a compromise that allowed Beijing to participate indirectly through the 2012 ASEAN chair while ASEAN would deliberate on the draft (Thayer, 2012). In April 2012, Chinese and Philippine vessels were again engaged in a standoff at the Scarborough Shoal. This has increased tensions in ASEAN meetings ever since.

The Philippines draft COC sought acceptance of a Zone of Peace, Freedom, Friendship, and Cooperation (ZoPFFC) over the South China Sea. Under this framework, non-disputed areas are to be isolated from disputed areas in accordance with the UNCLOS. The disputed areas may be set aside for joint-cooperation and development, and the non-disputed areas would exclusively belong to respective states that have sovereignty over them however, they may open it for investments by other countries (Del Rosario, 2011).

Many of the contents of this draft were deleted in the final ASEAN draft that emerged later. Notably, these included the proposed Joint Cooperation Area in the South China Sea, the Joint Permanent Working Committee to implement the ZOPFFC, the Application of Part IX of the UNCLOS, and the Dispute Settlement Mechanism.16


The 21st ASEAN Summit and ASEAN-China Summit in November 2012, ended devoid of any conclusions and China refused to discuss territorial and jurisdictional issues on the South China Sea. It insisted on its long-held position of the need for bilateral discussion of such issues. Moreover, in 2012, the then ASEAN Chair Cambodia was accused of bowing under Chinese pressure. It excluded mentioning that these matters where discussed in previous ASEAN Summits and Ministerial Meetings in the draft of the ASEAN joint communiqués, which were traditionally issued after such meetings. At the ASEAN Summit in Phnom Penh, and in front of ASEAN heads of state and President Barack Obama, a frustrated President Aquino said “that ASEAN is not the only route available to the Philippines” (Burgonio T., 2012).

Evidently, Aquino expected more support from ASEAN than he felt he was getting (Burgonio, 2012). ASEAN leaders finally took up the COC and the DoC in its 22nd Summit meeting chaired by Brunei, which ended on 25 April 2013 (Agence France Presse/Manila Bulletin, 2013). By that time, the Philippines had formally commenced the arbitration process.

Diplomatic Track and Its Travails

For over a decade, Beijing and Manila have engaged in bilateral negotia-tions and consultations to resolve conflicting claims in the South China Sea. A brief review of major developments in Philippine-China relations over the last twenty years is crucial for understanding the failure of diplomacy that led to international litigation.

When Manila filed for arbitration against Beijing, it took pains to emphasise that strained relations over the South China Sea disputes does not equate to their relations in entirety. Five years leading to Scarborough, bilateral relations seemed poised to be reaching unprec-edented new heights. Both countries re-established diplomatic rela-tions in 1975. Ironically, they made even more progress after the 1995 Mischief Reef incident. As of 2007, China was already the Philippines’ third largest trading partner, its fourth largest tourism market, and fifth biggest lender of Official Development Aid (Guidaben, 2008). China was viewed as a major source of “easy” and “no conditionali-ties” credit. One political analyst estimated that the then Philippine President Gloria Macapagal Arroyo tapped Chinese credit for about 80% of the loans needed for projects she mentioned in one of her State of the Nation Addresses (Guidaben, 2008). In a state visit of Chinese President Hu Jintao to the Philippines in 2005, Arroyo glowingly used the term “golden age” in describing Philippine-China relations.17


A more sanguine analysis, however, argues that Arroyo was using Chinese money to shore up her regime’s legitimacy after evidence of serious electoral irregularities that later emerged over her victory against a highly popular movie actor in the 2004 presidential polls (Guidaben, 2008). Nevertheless, leaning more and more toward China, with its growing power and resources, may also constitute a legitimate “hedging” strategy. In 2004, Philippine-US relations took a steep dive after Arroyo, bowed down to the demands of Iraqi insurgents for the release of a Filipino truck driver Angelo de la Cruz whom they took hostage in July of that year. It withdrew the forces that took part in the US-led invasion of Iraq in 2003.18 The hostage drama was a major media event that gripped the country and it came right after Arroyo’s hotly contested electoral victory. Under such intense political and public pres-sure, domestic politics trumped international security commitments.

One of the key developments for the so-called golden age was the signing of the Joint Marine Seismic Undertaking (JMSU) by three oil firms from China, the Philippines, and Vietnam on 14 March 2005. The JMSU was to explore areas in the Spratlys for hydrocarbon resources. It was hailed on both sides as a breakthrough in cooperative undertak-ings under the DoC, and carried out despite continued wrangling within ASEAN and between ASEAN and China on the COC. However, revela-tions that the Arroyo administration included non-contested areas of the Philippines in the coverage of the JMSU, and the confidentiality provisions of the undertaking itself, led to well publicised accusations that the President surreptitiously “sold out” to China.

Allegations that the JMSU was tainted with corruption acquired even more urgency when Arroyo’s political opponents linked it to a US$329 million contract for the building of the government’s national broad-band network. In 2007, Manila awarded the deal to China’s government-backed Zhongxing Telecommunications Equipment Company (ZTE). The Philippine Senate opened investigations following allegations that it was excessively priced and that the President’s husband, Miguel Arroyo, together with top officials close to the President, received kickbacks from ZTE.19 The intense controversy, which involved the influential Catholic Church, compelled the President to cancel the contract in the same year it was signed. In 2008, the joint seismic undertaking was allowed to expire, without completing its purpose despite provisions for extension.

The JMSU showed initial promise that steps could be undertaken to manage the dispute bilaterally, or multilaterally. However, murky poli-tics, corruption, and outright bungling derailed this first best attempt at joint-cooperation in line with the DoC.


The efforts at bilateral consultations and negotiations were also hampered on both sides by highly charged nationalist rhetoric and an atmosphere of suspicion and distrust.

Amid plans of public demonstrations in Manila at the height of the Scarborough standoff in 2012, China issued an advisory against travel to the Philippines, asking its citizens to stay in-doors (Gutierrez, 2012). Philippines’ banana exports to China were suddenly subjected to what Filipino exporters called “unbelievably stringent inspections” (Olchondra, 2012). China is a major market for Philippines export and tourism. In Chinese media and social websites, anti-Philippine nationalist rhetoric was widely circulated, and this was well reciprocated in the Philippines.

A survey conducted in May 2012 by the Social Weather Station (SWS) (Inquirer Research, 2012) in the Philippines revealed that 55% of Filipinos had “little trust” in China while 19% had “much trust” resulting in a “bad” net rating of minus 36. This was a large drop from the “moderate” net trust rating of plus 10 that China registered in March of the same year (39% “much trust,” 29% “little trust”). In contrast, the United States got a “very good” net trust rating of plus 62, and Australia and Japan a “good” net rating of plus 39 and plus 32 respectively. The survey showed that the Scarborough Shoal standoff was among the “most followed news events in the country in May” and was “followed closely” by 48% of the respondents (Inquirer Research, 2012).

Manila took no retaliatory action, but Akbayan, a political party allied with the ruling Liberal Party, accused China of “bullyism,” and led demonstrations at the Chinese embassy in Manila. Filipino citizens also demonstrated at various Chinese embassies abroad, and even launched a “boycott China-made goods” campaign. Even the fading and exiled leader of the Maoist Communist-party of the Philippines accused their former patron of “imperialist tendencies” and called their claim “absurd.”20

Scandals like the JMSU “sell-out” and the well-publicised corruption allegations involving top government officials, including the President’s husband have coloured President Aquino’s view of Chinese leaders. He won office mainly on the issue of “corruption” and has been filing plunder cases against Arroyo and persons close to her for alleged past misdeeds. In fact, Aquino himself openly blames Arroyo for giving China the opportunity to claim the Reed Bank (Recto Bank in the Philippines) in the Spratlys by entering into the JMSU with Beijing (GMA News, 2011). The Philippine government has awarded a Service Contract 72 to Forum Energy Plc., a Filipino company, but its US$75 million drilling program is being delayed by the sea dispute (Remo, 2012).


Aquino, nevertheless, sought what he called “a heart-to-heart” talk with Chinese President Hu Jintao as the way forward (Doronila, 2012). On-going tensions, however, prevented a one-on-one meeting between the two at the Asia Pacific Economic Cooperation (APEC) Leaders’ Summit meeting in September 2012 at Vladivostok. Furthermore, Hu was already then on the way out and Xi Jingping replaced him in China’s once-in-decade leadership change, which took place barely two months after Vladivostok.

Hu visited the Philippines and was familiar with the country, but his successor Xi was largely unknown, until recently. With the present arbi-tration case, the two leaders, Aquino and Xi, may have started on the wrong foot. Although nothing in the UNCLOS prevents the parties from withdrawing a case after it has been initiated, the die is cast, politically, for the Aquino government.

The Legal Track: Into Uncharted Waters

The decision to take the case to the UNCLOS allowed Manila to demon-strate its commitment to a rules-based approach and establish moral high ground to gain international political support. However, its high-mindedness could hardly conceal its more urgent logic. Legal and international political pressure was needed to stop or at least minimise Beijing’s further occupation and exercise of jurisdiction over disputed areas.

Manila explained that the legal track was a last resort, after it had exhausted all other political and diplomatic means, including the obliga-tion to exchange views towards reaching a negotiated settlement under Article 283 of the UNCLOS.21 Manila pointedly asserted that Beijing’s refusal to withdraw its ships from the Scarborough Shoal despite an alleged agreement (which the latter denied) to withdraw simultaneously as a way to deescalate the tension, triggered the filing of the arbitration case (Ubac, 2013).

President Aquino was reported to have personal reservations about its chances of success22, but was convinced by advisers to up the ante in the face of China’s sustained aggressive actions. The Scarborough Shoal incident was raising popular anxiety that China is creating a “new normal” situation on the ground. Furthermore, local media was widely circulating reports tracking increased Chinese incursions, particularly in Scarborough Shoal (Esmaquel, 2012). Public pressure was mounting to take decisive action against activities the government had no effective means to stop on its own.


Arbitration is estimated to take three to four years. Of particular and immediate value to the Philippines, however, are the provisional reme-dies under Article 290(10) of the UNCLOS. It grants a party in an arbitra-tion case the right to request provisional measures to preserve its rights or “prevent serious harm to the marine environment” pending final decision of the arbitral tribunal.23 Even more significant, parties may avail of such provisional remedies even before the tribunal is constituted because UNCLOS allows it to be filed with the International Tribunal of the Law of the Sea (ITLOS) in the interim.24 The arbitral tribunal so constituted may prescribe such measures upon determination that it has prima facie jurisdiction over the case. In the case of the ITLOS, such provisional remedies may also be issued if it determines prima facie that the tribunal to be constituted will have such jurisdiction and the urgency of the situation so requires.25 In filing for arbitration, the Philippines expressly reserved its right to seek such measures.26 Despite its rejection, ignoring or defying a provisional remedy duly issued by an arbitral tribunal could be embarrassing for Beijing.

One of the key features of the UNCLOS is the mandatory require-ment for all parties to settle disputes regarding the interpretation and application of its provisions under the rules provided in Part XV. Section 1 of Part XV allows the parties to settle such disputes by any peaceful means of their choice,27 through negotiations,28 or by submitting the dispute to conciliation.29 When no settlement is reached under any of these means, Article 286 of the UNCLOS allows either party to unilater-ally resort to any of the binding and compulsory means provided for in Section 2 of Part XV. Article 287 lists the means open to the parties, as follows: (a) the International Tribunal for Law of the Sea (ITLOS); (b) the International Court of Justice (ICJ); (c) an arbitral tribunal established under Annex VII of UNCLOS; or (d) a special arbitral tribunal estab-lished under Annex VIII of UNCLOS.

A party may choose in advance any of the means mentioned above, through a written declaration30 to be deposited with UN secretary general.31 However, if no such declaration is made, the party shall be deemed to have accepted arbitration under Annex VII of the UNCLOS.32 The Philippines and China have not made such a declaration, thus, Manila claims, it can initiate arbitration under Article 287(c).33 The constituted arbitral tribunal, however, will decide if this claim is valid when it rules on whether it has jurisdiction over the case later.

Arbitration under Annex VII of the UNCLOS can proceed even if a party refuses to participate. The Philippines appointed former President of the International Tribunal of the Law of the Sea (ITLOS) Rudiger


Wolfrum of Germany.34 Because of China’s rejection,35 ITLOS President, Shunji Yanai,36 informed the chief of the Philippines legal team, Solicitor General Francis Jardeleza, on 24 April 2013 of the appointment of Mr. Jean-Pierre Cot (France), Mr. Chris Pinto (Sri Lanka), and Mr. Alfred Soons (The Netherlands) as members of the arbitration tribunal. This power is granted under the Annex VII of the UNCLOS, which includes the power to appoint the President of the tribunal.37 This completed the constitution of the tribunal. Yanai earlier appointed Stanislaw Pawlak (Poland) to represent China (Del Callar, 2013).

Under UNCLOS rules, the arbitral tribunal must first decide on its competence before it can proceed to decide on the merits. China rati-fied the UNCLOS on 7 June 1996 and may be deemed to have accepted compulsory arbitration under Section 2 of Part XV, as earlier noted. However, Article 298 of the UNCLOS allows parties to make optional exceptions taking away certain subject matters from the coverage of the dispute mechanism laid down in Section 2 of Part XV. On 25 August 2006, China made the exceptions to “all the categories of disputes”38 referred to under Article 298, paragraph 1 as follows: a) “interpretation or application of articles 15, 74 and 83 relating to sea boundary delimi-tations, or those involving historic bays or titles”; b) “military activities, including military activities by government vessels and aircraft engaged in non-commercial service, and disputes concerning law enforcement activities in regard to the exercise of sovereign rights or jurisdiction,” and; c) “the exercise of functions assigned by the UN Charter to the Security Council of the UN.”39

The relevant exceptions mentioned under 298, paragraph 1(a), are those matters covered in Articles 15, 74, and 83 of the UNCLOS relating to boundary delimitations of the territorial sea, the EEZ, and the conti-nental shelf, respectively, of states with opposite and/or adjacent coasts, and those relating to historic bays or titles. The key test for the determi-nation of the tribunal’s competence is whether the issues raised by the Philippines do not fall under these excepted subject matters.

Even if the arbitral court decides it has jurisdiction over the subject matter, and this remains an important risk for the Philippines given the exceptions made by China, there still remains the process of deter-mining whether its claims are “well founded in fact and law” despite Beijing’s rejection.40 Although it has been pointed out that “unopposed litigious claims are always less cumbersome than disputed ones” (Roque, 2013), China’s default in a case so complex and fraught with implica-tions to regional, and even global security, puts pressure on the arbitral tribunal to exert more effort to ensure its credibility and legitimacy.


The Philippines’ Statement of Claims raises four major groups of inter-related issues specifically crafted to avoid falling under the exceptions provided for by the above-mentioned Chinese reservations.

The first two issues include determining whether or not “the respec-tive rights and obligations of the parties,” in regard to “the waters, seabed and maritime features” of the South China Sea encompassed by the nine-dashed lines asserted by China, are governed by the UNCLOS, and whether or not “claims based on the ‘nine-dash line’ are consistent with its provisions, particularly Articles 3–14 of Part II, Articles 55 and 57 of Part V, Article 76 of Part VI, Article 121 of Part VIII and Article 300 of Part XVI.”41

Articles 3–14 of the UNCLOS refer to the rules on delimiting the terri-torial sea, Articles 55 and 57 provides for an EEZ and limits its breadth respectively, Article 76 defines the continental shelf and the rules for its delineation, Article 121 defines and provides a regime for islands and rocks, and Article 300 restates the general obligation of all state parties to comply with their UNCLOS obligations in good faith. The Philippines argues that these do not specifically cover boundary delimitations of the territorial sea, EEZ and continental shelf of states with opposite or adja-cent coasts. On these grounds they are not covered by the exceptions made by China.

Broadly construed, determining the “respective rights and obligations of the parties in regard to the waters, seabed and maritime features” in the light of the UNCLOS, may involve some interpretation or applica-tion of provisions that come under the exceptions. The claim coming from the Philippines, however, appears to make a fine distinction. Strictly speaking, it may be argued that China’s exercise of such rights (of sovereignty and jurisdiction) within the nine-dash line should be based on, or be consistent with, the UNCLOS, including the provisions covered by the excepted subject matters.42

In short, what the Philippines is chiefly aiming at is determining the legality of the nine-dash line in the light of the UNCLOS, and not the specific interpretation or application of the matters being covered under the list of “exceptions” per se. Interpreting it this way allows the Philippines to challenge the exclusion of “historic bays or titles,”43 a concept that is even harder to define and defend, and which China argues is not covered by UNCLOS.

The third group of issues includes determining the status of the features in the South China Sea, which are mainly below sea level at high tide. This ought to be determined with the exception of a few small protrusions, namely, Scarborough Johnson Reef, Cuarteron Reef, and


Fiery Cross Reef are rocks within the meaning of Article 121(3) of the UNCLOS and are entitled only to a 12 NM territorial sea.44 Likewise, it also seeks determining whether Mischief and McKennan Reefs in the KIG are submerged features and form part of the Philippine continental shelf, and whether or not Subi and Gaven Reefs, also in the KIG, are also submerged features not forming part of China’s continental shelf.45 These issues are clearly aimed at either China’s alleged “excessive” claim of maritime jurisdiction in the case of rocks or the complete lack of it in the case of the submerged features.

The final issue emanating from the previous ones mentioned, is whether or not China has violated the navigational rights of the Philippines in the South China Sea, including rights over the living and non-living resources in its EEZ and continental shelf therein.46

For the purpose of understanding the main object of the Philippine claim and its underlying strategy, it would be sufficient to understand only the first two issues enumerated above.

The Note Verbale informing the Philippine Foreign Affairs office of China’s rejection in February 2013 was reported to have reiterated China’s position that it has “indisputable sovereignty over the entire South China Sea encompassed by its nine-dashed line” (GMA News, 2013). News reports on the day Chinese Ambassador Ma Keqing received the Notification from the Philippines, however, quoted her as stating the more oft repeated line that “China has indisputable sover-eignty over the islands in (the) South China Sea and its adjacent waters.” China’s foreign minister Yang Jiechi used the same words in his meeting with the US state secretary Hillary Clinton in Beijing on 5 September 2012 (Xinhua, 2012). This is also the formulation in China’s statement submitted before the UN secretary general on 7 May 2009, protesting a Joint Submission, dated 6 May 2009, submitted by Malaysia and Vietnam to the Commission on the Limits of the Continental Shelf.47 It is worth noting that China annexed a copy of the nine-dash line in this 2009 submission.

Whether it bases its maritime claims on the land features or directly on the nine-dash line, Beijing has consistently argued that its claims have ample basis on historic grounds and international law, including the UNCLOS. Its practice, however, of increasing occupation of reefs and submarine features, and enforcing its jurisdiction even beyond the allowable 12 nautical mile limits suggest reliance on the line. This has extended to small high-tide protrusions, which could hardly be deemed islands, as in the case of Scarborough Shoal. China has taken steps as well to enact legislation based on the UNCLOS.


Even granting arguendo that Beijing loses the waters within nine-dash line in the arbitral case, it may still use the UNCLOS to recover them by proving sovereignty over the land features.48 However, to gain under UNCLOS what it could lose in the line requires settlement of the even more problematic territorial and sovereignty claims on the land features of the Spratlys. This could also arise with the Paracels that Beijing also contests with Hanoi, that involve issues outside the coverage of the UNCLOS.

Effective occupation and exercise of jurisdiction are the clear badges of sovereignty and ownership as laid down in the Island of Palmas case.49 UNCLOS merely governs maritime space, and central to its assumptions is that the “land dominates the sea.” The ambiguity shrouding its posi-tion enables it to hedge its bets. What seems clear is that China will neither give up the claims based on both the line and land and, there-fore, will continue occupying and patrolling the disputed areas, pres-ently and in the near future.

A Philippines Defence Track? Minimum Credible Defence Capability

Recently, the Philippines has been ramping up spending to achieve what it calls a “credible minimum deterrence capability.” While not considered an official track, it is clearly part of the policy mix to protect its claims, and cannot be ignored. Until recently, external threats have never figured prominently in the Filipino mass psychology and national security has largely been dominated by internal security concerns.50 As late as 2010, defence planners continue to hold the key strategic assump-tion that there are no armed foreign threats against the country’s territo-rial integrity and sovereignty (Armed Forces of the Philippines, 2010). The events of 2012 changed all that.51

In 2011, the Aquino administration’s National Security Policy (2011–2016) called for capacitating the Philippines “to exercise full sovereignty over its territory and provide protection to its maritime and other stra-tegic interests” (2011, pp. 39–40) by enhancing the external “defensive capability” of its air force, navy, and coast guard (2011, p. 30). But it was the Scarborough incident that drew widespread public support for increased defence spending that provided political capital for the execu-tive and legislative branches of government to immediately, and this time, work cooperatively.

On 11 December 2012, a new law was enacted (Republic Act No. 10349, 2012) extending an earlier Armed Forces Modernisation Program


that has already expired for another 15 years.52 The new law provides for an additional US$1.9 billion for the armed forces Capability Upgrading Program (CUP) in its first five years (Mendez, 2012). The defence depart-ment immediately sought funding for 138 military contracts worth US$ 1.5 billion for the acquisition of military equipment, including fighter jets and warships, for the air force and navy over the next few years (Pazzibugan, 2012).

Despite the acceleration in defence spending, Manila could not hope to match China’s overwhelming advantage in military and civilian law enforcement assets. To do that it had to lean on an old and natural ally. Despite a 1951 Mutual Defence Treaty (MDT), Philippines-US defence cooperation cooled considerably when the Philippines Senate voted to close two large US military bases in the Philippines in 1991.53 Both bases were located in the eastern part of the main Philippines island of Luzon, facing the West Philippine Sea. Their presence virtually made the South China Sea an “American lake.” The bases closure, which also ended US military funding, left the Philippines, with one of the weakest militaries in Asia and, with practically no credible external defence capabilities.

Beijing was quick to exploit the subsequent security vacuum, as demonstrated by its occupation of Mischief Reef, which went almost unnoticed until March 1995. Nevertheless, US military funding and closer defence cooperation was revived with the signing of the Visiting Forces Agreement (VFA)54 in May 1999. Notably, the Philippines acquired two refurbished Hamilton-class vessels for its navy, the BRP Gregorio Del Pilar in 2011, and the BRP Ramon Alcaraz in 2012, under the US Excess Defence Article (EDA) Program. In April 2012, at the height of tensions in Scarborough, the Philippines and US Defence and State officials held a high-profile “Two plus Two meeting.” Manila sought to upgrade its defence cooperation under the framework of the MDT to help raise Philippines capacity for “territorial and maritime security.” (Esplanada, 2012). Most significantly, on 28 April 2014, the United States and the Philippines signed the Enhanced Defence Cooperation Agreement (EDCA) less than a year after starting negotiations in August 2013. While the agreement aims to promote interoperability between the armed forces of both countries and “address short-term capabilities gaps,” most significantly, it allows US troops access to agree upon Philippines bases on a “rotational basis”55 and preposition defence materials.56 While the arrangement falls short of a permanent basing, it further enhances US military projection capabilities in the South China Sea.

In 2012, Philippine officials said it would be getting US$144.66 million in US defence assistance that year. It also announced negotiations for the


acquisition of “more defence articles, including newer air assets” from the United States, including a US$53 million funding for a radar system to improve the country’s “maritime domain awareness” (Esplanada, 2012). In 2013, despite budget cuts, the US State Department has report-edly requested the US Congress to approve over US$178 million in foreign assistance to the Philippines for 2014, with US$50 million in the form of Foreign Military Financing (Katigbak, 2013).

The Aquino administration’s policy of seeking a more cooperative defence arrangement with its allies and neighbouring countries (2011, p. 30) received a further boost. In a clear indication of strong public support, the usually critical and fiercely independent Philippine Senate voted 17 to 1, to concur in the Status of Visiting Forces Agreement (SOVFA) with Australia57 on 24 June 2012 (Yamsuan, 2012), after allowing it to languish for two years.58 The SOVFA was signed in Australia in 2007.

Interestingly, in late 2012, Manila expressed its support for a rearmed Japan, a former foe, as a counterweight to China in the region (Pilling, 2012). Japan is also US treaty ally with a similar dispute with China over the Senkaku/Diayou islands in the East China Sea. Earlier, Japan has offered to provide the Philippine Coast Guard with 12 patrol boats in Official Development Aid (ODA) and grants (Esplanada, 2012). Days before the Philippines filed for arbitration in January 2013, Japanese Foreign Minister Fumio Kishida, part of the nationalist government of Prime Minister Shinzo Abe formed just a month earlier, made Manila the first of a four-nation visit to established stronger security relations with ASEAN members. As Filipino analyst Amando Doronila pointed out, Kishida “did not disguise the security accent” of his visit (Doronila, 2013).

In a visit to Manila in November 2012, Aquino also asked South Korean President Lee Myung-bak for an aircraft, patrol boats, and other hard-ware to help boost the country’s defence capability (Legaspi, 2011). Both countries had an existing defence-related logistics agreement (Esplanada, 2012) and the Philippines has been looking to acquire fighter jets from South Korea.59 Aside from the United States, Japan, Poland, Australia, and South Korea, the Philippines is also looking at defence procurement from non-traditional sources like Italy, Britain, France, Russia, South Africa, and even Indonesia (GlobalSecurity.org).

Larger Risks and Challenges

The multi-party South China Sea disputes have eluded some of the most vigorous diplomatic and political efforts ever undertaken in the region.


Nevertheless, arbitration, though consistent with the development of rules-based regime in the region that everyone openly advocates, poses serious political challenges of its own.

One of the main problems of international litigation, particularly under the UNCLOS, is that there is no mechanism to enforce its deci-sions. In fact, under the UN system, resorting to the Security Council would not be very effective. Undoubtedly, its permanent Security Council member China would veto any action against it. For countries like the Philippines, only world public opinion can serve as a viable check against a refusal to comply with an arbitral award, however dele-terious it would be to China’s global image as a rising power (Santos, 2012). Even if China, somehow, cooperates in partially enforcing a judg-ment, it is still most likely to insist on bilateral negotiations to allow it to take effect. All this is assuming that China loses in the arbitration case. If it wins, China will certainly enforce the decision, or any aspect of it favourable to its perceived interest. Even if the Philippines wins a favourable ruling, particularly on the nine-dash line, it would still leave the question of sovereignty over the land features open. This is even more intractable.

Manila’s decision to challenge Beijing through compulsory arbitration has not only angered Beijing, it has also pushed it towards closer defence cooperation with the United States, further fuelling great-power rivalry in the region. Increased defence cooperation with the Philippines and its other allies in Southeast and Northeast Asia is part of US–Asia-Pacific strategy (Santos, 2012) especially under the Obama administration’s “rebalancing” to Asia policy. Beijing is also increasing its deployment of assets and conducting more naval exercises in the South China Sea, including one that involved China’s first aircraft carrier, the Liaoning.60 The United States is responding by increasing deployment of its own naval assets, and stepping up the naval exercises with its allies in the region, including exercises with the Philippines navy in the disputed areas. These actions increase the risk of dangerous miscalculations.

In the Philippines, doubts were expressed about the readiness of the United States to risk war with China over “a few rocks” (Burgonio, 2013). Indeed, Filipinos witnessed China seizing the Scarborough Shoal while the United States practically stood by, a fact that would clearly still fresh in the minds of decision makers when Manila decided to file for arbitration. While the decision enjoyed strong US political support, the price for Manila is further damaging its relations with Beijing and a forward position in a heightened US-China rivalry that is further fuel-ling regional insecurity.


The lukewarm attitude within ASEAN towards the Philippine decision to arbitrate may appear at first, counter-intuitive. ASEAN has, on many occasions, sought to internationalise the issue of the nine-dash line, against Beijing’s strong objections. The way Manila has framed the issues, a legal victory would promote freedom of navigation, an issue ASEAN shares with the international community. A ruling declaring the nine-dash line invalid would also help strengthen the position of members with rival maritime claims. Moreover, since arbitration only binds the parties, only Manila will be directly bound by an unfavourable decision, including enduring the most of Chinese retaliation. Finally, although arbitration currently enjoys popular support in the Philippines, a defeat, or even a partial legal victory poses serious domestic political risks for Aquino, even after his terms ends in 2016. No national leader wants a legacy of losing, or weakening his country’s case in a territorial and maritime domain dispute.

Apart from offending a powerful neighbour, what are driving serious anxieties among ASEAN members are the potentially divisive effects of Manila’s decision within its ranks.61 For better or for worse, consensus has always been the “ASEAN way,” and some have described the Philippines’ “unilateral” action as breaking ranks with ASEAN. ASEAN has always striven to preserve its unity and centrality, especially on issues vital to the security and stability of the region. This unity was sorely tested in the 2012 ASEAN summit when Cambodia, a Chinese ally, used its prerogatives as Chair to stall mentioning the disputes in the traditional joint communiqué, resulting in its non-issuance for the first time in ASEAN history.

Not all ASEAN members are involved in the dispute but, China, with its immense market, is a main trading partner the bloc’s member. For countries like Cambodia, it is also an important source of “untied” loans and development assistance. There is a strong interest in maintaining stable relations with China. The potential for individual disputes to “hijack” the common agenda raises fears of “unilateral” actions among its members, especially if it introduces adversarial legal procedures whose outcome ASEAN cannot control in its usual way.

Special circumstances, singular political realities, deeply held national sensitivities, and straight power concepts still largely influence interna-tional law and its uses. Recognising these limits, international conven-tions like the UNCLOS provide for negotiations and other voluntary modes of settling disputes. They even allow exceptions to substantive and procedural rules when the outcome may depart from the very norms they seek to enshrine.


Whichever side wins the arbitration case, wholly or partially, the potential for an increasingly divisive political crisis could emerge. If the nine-dash line stands intact, it will put an irredentist and increasingly ambitious and powerful China in control of one of the world’s most vital sea-lanes. This would run counter to US strategic interest in the region, formally expressed in its interest in freedom of navigation, and spark heightened rivalry between the two powers. If the line falls, sover-eignty over land features will become a more contentious issue. The risk of miscalculations could rise as rival claimants deploy more assets to occupy more of these features to consolidate and strengthen their legal positions.

Conclusion: The Urgent Need for a Binding Code of Conduct

Even if it crosses the hurdles of jurisdiction and proceeds on the merits, arbitration will neither resolve the dispute nor ensure peace. It will, however, change the core legal issues, especially if it affirms the appli-cability of the UNCLOS and invalidates the nine-dash line. However, whichever way the decision goes, peacefully enforcing it would require bilateral and multilateral negotiations and consultations.

Philippines and China need increased bilateral consultations, not despite the arbitration case, but especially because of it. They need to leverage the entire range of their bilateral relations to ensure that this one dispute does not suspend all forms of bilateral relations entirely. A successful engagement with Beijing would require Manila to project a more independent political posture. The current tensions, however, are pushing it closer to Washington, its long-time ally and former colonial master. Thus, while the arbitration case did not create the need for a binding code to manage the South China Sea disputes, it has made it even more urgent.

Despite internal wrangling and dire predictions about its looseness, ASEAN has proven resilient. It has the major players in the region as dialog partners, and through mechanisms such as the ASEAN Regional Forum (ARF), has proved a useful channel for both formal and backdoor consultations. However, ASEAN must remain united, maintain its inclu-sive approach, and create more opportunities to assert and enhance its leadership and centrality in the region to establish a binding code of conduct. Despite the daunting challenges it entails, it remains the best hope for peace in the region.


Notes

1. For the full provision, see Art. 1, 1987 Philippine Constitution (Philippines Constitution, 1987).

2. This Presidential Decree is entitled “Presidential Decree No. 1596 Declaring Certain Area Part of the Philippine Territory and Providing for Their Government and Administration” (Presidential Decree 1596, 1978).

3. Professor Estrella Solidum of the Philippines writes that in 1956, Cloma issued a “Proclamation to the Whole World” claiming ownership over 33 islands of sand cays, sand bars, coral reefs, and fishing grounds covering an area of 64,976 square miles based on discovery and occupation of the terri-tory (Laserna, n.d.).

4. See also The Philippine Position on Bajo De Masinloc and the Waters within Its Vicinity (Department of Foreign Affairs, 2012).

5. Republic Act No. 3046 entitled “An Act Define the Baselines of the Territorial Sea of the Philippines” was the original Philippines baselines law signed in 17 June 1961. It was later amended by Republic Act No. 5446 entitled “An Act to Amend Section One of Republic Act Numbered Thirty Hundred and Forty-Six,” Entitled “An Act to Define the Baselines of the Territorial Sea of the Philippines,” and signed on 18 September 1968.

6. Republic Act 9522 is entitled “An Act to Amend Certain Provisions of Republic Act No. 3046, as Amended by Republic Act No. 5446, to Define the Archipelagic Baseline of the Philippines and for Other Purposes” (Republic Act No. 3046, 1961).

7. See Section 2, Republic Act 9522. In 2011, the Philippine Supreme upheld the constitutionality of RA 9522, and dismissed the claim that it surrendered territory by not including KIG and Scarborough Shoal inside the archipelagic baselines. The court recognised that doing so would violate two UNCLOS provisions: Article 47 (3) which requires that baselines must not depart appreciably from the general configuration of the archipelago, and Article 47 (2), which requires that the length of baselines should not exceed 100 NM (Prof. Merlin Magallona et al v. Hon. Eduardo Ermita, 2011).

8. For further details, see “A Law Establishing the EEZ and Other Purposes” (Presidential Decree 1599, 1978).

9. President Benigno Aquino signed Administrative Order No. 29, “Naming the West Philippine Sea of the Republic of the Philippines, and for Other Purposes” on 5 September 2012, reflecting the flurry of legislative and regula-tory responses for that year.

10. See Section 1, AO No. 29 (Administrative Order No. 29, Series of 2012).11. The ASEAN Declaration was signed by the Foreign Ministers of Brunei

Darussalam, Indonesia, Malaysia, the Philippines, Thailand, and Singapore (ASEAN Declaration on the South China Sea, 1992). The Philippines is part of ASEAN’s original five members.

12. CHAPTER IV (Pacific Settlement of Disputes), Article 13 of the Treaty provides that in case of disputes “likely to disturb regional peace and harmony,” the Parties “shall refrain from the threat or use of force and shall at all times settle such disputes among themselves through friendly negotiations.” Under Article 14, the Treaty also directs Parties “to settle disputes through


regional processes.” For full details, see “Treaty of Amity and Cooperation in Southeast Asia” (ASEAN, 1976).

13. The ARF was initiated by ASEAN and its Dialog Partners, in addition to China, Russia, soon-to-be members Vietnam and Laos, and observer Papua New Guinea. The ARF is a forum for security issues that took up the South China Sea dispute as a potential security flashpoint in the region.

14. For a more detailed discussion, see Carlyle A. Thayer, “ASEAN’s Code of Conduct in the South China Sea: A Litmus Test for Community-Building,” The Asia-Pacific Journal, Vol. 10, Issue No. 34, No. 4, 20 August 20 2012 (http://www.japanfocus.org./-Carlyle_A_Thayer/3813).

15. Ibid.16. For a more thorough analysis of the ZOPFFC and the events surrounding the

drafting of the ASEAN COC, among others, see Carlyle A. Thayer, “ASEAN’s Code of Conduct in the South China Sea: A Litmus Test for Community-Building,” The Asia-Pacific Journal, Vol. 10, Issue No. 34, No. 4, 20 August 20 2012 (http://www.japanfocus.org./-Carlyle_A_Thayer/3813). supra note 23.

17. Ibid.18. The author was Philippine Labor Attaché to Iraq in 2004–2005 and took part

in the efforts to obtain the release of Filipino hostages taken there.19. A report citing the British-based Financial Times claimed that the US

Ambassador (apparently to Manila) was aware of the “machinations” behind the ZTE deal and wrote to the Philippine government “urging fair and trans-parent consideration of all proposals.” A rival US firm, ARESCOM, was also reportedly offering to build a broadband network for US$ 135 million with US technology and funding from the US Export-Import Bank, but the US$394 million ZTE plan got the award (Pastrana, 2008).

20. Although Sison also called Aquino’s moves as providing justification for more US intervention in the region (Bordadora, 2012).

21. See also Paragraph 33, Notification and Statement of Claims (Department of Foreign Affairs, 2013).

22. Newspaper reports quoting unnamed officials privy to the discussions in the decision to file the case revealed that President Aquino was worried about losing in the Arbitration (Rappler.com, 2013).

23. See Article 290 (3) UNCLOS.24. See Article 290 (5) UNCLOS.25. See Article 290 (1) (5) UNCLOS.26. See Paragraph 43, Philippine Statement of Claim.27. See Article. 280, UNCLOS.28. See Article 283, UNCLOS.29. See Article 284, UNCLOS.30. See Article 287 (1), UNCLOS.31. See Article 287 (8), UNCLOS.32. See Article 287 (3), UNCLOS.33. See also paragraph 36, Philippine Statement of Claims.34. Pursuant to Under Article 3 (b) of Annex VII, “The party instituting the

proceedings shall appoint one member ... The appointment shall be included in the notification referred to in article l of this Annex.”

35. Article 3 (c) of Annex VII of the UNCLOS provides that “the other party to the dispute shall, within 30 days of receipt of the notification referred to


in article l of this Annex, appoint one member ... If the appointment is not made within that period, the party instituting the proceedings may, within two weeks of the expiration of that period, request that the appointment be made in accordance with subparagraph (e).”

36. Art. 3 (e) of Annex VII of the UNCLOS provides that unless the President of the ITLOS is unable to appoint a member or is a national of one of the parties to the dispute, the appointment shall be made by the next senior member of the ITLOS. Although Japan is not a party, it is embroiled in a similar dispute with China in the East China Sea. Yanai, a long-time Japanese diplomat, may advise himself not to make the appointment to protect the credibility of the Tribunal.

37. Art. 3 (e) of Annex VII of the UNCLOS provides that “unless the parties agree to any appointment under subparagraphs (c) and (d) be made by a person or a third State chosen by parties, the President of the International Tribunal for the Law of the Sea shall make the necessary appointments.” The President of the ITLOS may have to make the appointment in behalf of China since no such agreement appointing a person or a third State chosen by the parties could be made under this provision unless China participates. The last sentence under Art. 3 (c) specifically provides that Art. 3 (e) applies if “the other party” in this case China fails to make an appointment within 30 days from receipt of notification referred to in Art. I, Annex VII. The same logic could also be applied with regards to the three other members of the Tribunal which shall be appointed by the agreement of the parties, including the appointment of the President of the Tribunal, as provided for under Art. 3 (d).

38. China’s Declaration under Article 298, dated 25 August 2006, states: “The Government of the People’s Republic of China does not accept any of the procedures provided for in Section 2 of Part XV of the Convention with respect to all the categories of disputes referred to in paragraph 1 (a) (b) and (c) of Article 298 of the Convention.” – See The United Nations Division for Ocean Affairs and the Law of the Sea, China: Declaration made after ratifi-cation (25 August 2006) under Article 298 (China: Declaration made after ratification under Article 298, 2006).

39. See Article 298, paragraph 1 (a) (b) and (C), UNCLOS.40. Article 9 of Annex VII (Default of appearance), provides: “If one of the parties

to the dispute does not appear before the arbitral tribunal or fails to defend its case, the other party may request the tribunal to continue the proceedings and to make its award. Absence of a party or failure of a party to defend its case shall not constitute a bar to the proceedings. Before making its award, the arbitral tribunal must satisfy itself not only that it has jurisdiction over the dispute but also that the claim is well founded in fact and law.”

41. See Paragraph 39, Philippines Statement of Claims.42. See paragraphs 39, Philippine Statement of Claims.43. See Article 298, paragraph 1 (a), UNCLOS.44. See Paragraphs 39 and 41, Philippines Statement of Claims.45. Ibid.46. Ibid.47 See Submission dated 7 May 2009 (http://www.un.org/Depts/los/clcs_new/

submissions_files/mysvnm33_09/chn_2009re_mys_vnm_e.pdf) Accessed 18 June 2013.


48. In the Roundtable Discussion on Contemporary China, University of the Philippines in Quezon City, 16 February 2012, law professor Jay Batongbacal opined that if China relies on the UNCLOS, and not on the nine-dash line, it would still obtain almost the same maritime space (Batongbacal, 2012).

49. The lone arbitrator Max Huber awarded the Island of Palmas (Miangas) to the Netherlands (successor state: Indonesia) for having proved not just position but exercise of sovereignty over the islands located off the coast of Davao province in the southern Philippines (Island of Palmas Case (Netherlands, USA, 1928).

50. The Philippines continue to grapple with a long-running, peasant-based, communist insurgency. In the south of the country, the Philippine military also had to face an armed Muslim secessionist movement. Although both challenges are widely considered as significantly foreign-inspired, and even supported, when it comes to resource-allocation, Filipino politicians appar-ently did not consider the external defense aspect of the national security establishment a too important political constituency.

51. See also Row with China a “reawakening” for PH defense (Dizon, 2012).52. The original modernisation program was approved on 23 February 1995

(Republic Act No. 7898, 1995). Its implementation suffered serious funding problems, and was hobbled with corruption charges.

53. The US Naval Base in Subic, in Zambales, and the Clark Airbase in Pampanga provinces in the main island of Luzon are two of the largest US bases outside US territories. At the time of the Senate vote, Clark Airbase was already effec-tively shut down after sustaining damage due to the eruption of nearby Mt. Pinatubo volcano in 1990.

54. The VFA does not involve basing but merely establishes the ground rules for US forces in joint training, exercises, consultations, and exchanges within the framework of the RP-US Mutual Defense Treaty.

55. EDCA, Article I, Section 1 (b). The use of the term “rotational basis” was intended the avoid any suggestion of permanent basing of foreign troops that is banned by Philippines Constitution, unless ratified by the Senate. For more details, see Enhanced Defense Cooperation Agreement (EDCA, 2014).

56. See EDCA, Article IV, Section 1.57. Article XVIII, Section 25 of the Philippine constitution, foreign military

bases, troops, or facilities may only be allowed in the Philippines under a treaty duly concurred in by the Senate. See also Philippine Senate Resolution No. 788 (Philippine Senate, 2012). The SOVFA is not a mutual defense treaty. It merely sets the ground rules for visiting forces from each state while in the territory of the other state. See SOVFA between Australia and the Philippines (Agreement between the Government of Australia and the Government of the Republic of the Philippines Concerning the Status of Visiting Forces of Each State in the Territory of the Other, 2012).

58. The Philippines and Australia already has a Memorandum of Understanding on Cooperative Defense Activities signed in 1995, which provides “for enhanced bilateral defense and military cooperation between the Philippines and Australia through exchange of visits” (Philippine Senate, 2012). See also Sponsorship Speech of Senator Loren Legarda (Legarda, 2012).

59. The contract for the purchase of 12 fighter jets from Korea was signed in March 2014 (Mangosing, 2014) .


60. See also China’s salami-slicing cabbage strategy (Rodis, 2013).61. See also Legal Process, political mess (Tay, 2013).

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Taiwan’s South China Sea policy is influenced by its domestic party poli-tics and cross-strait relations with China. Generally, the Kuomintang (the KMT) adopts a different course from that of the Democratic Progressive Party (the DPP) on this matter. Before the 1980s, the claims of the two Chiang administrations in Taiwan resembled that of the Chinese. In the first half of the 1990s when Lee Teng-Hui served his first term of presidency in Taiwan, Taipei still based its claims on the historical rights arguments and promoted joint development as an important policy goal. In the second half of the 1990s, cross-strait relations turned sour when relevant talks were halted. This adversely affected emerging cross-strait joint development cooperation talks. The revival of governmental attention and policy interests took place after the incumbent President Ma Ying-Jeou obtained the power in 2008. Returning to the old stance long upheld by the KMT, Taiwan continues to face the challenges in earning more space in international negotiation forums of the dispute. It faces a key dilemma of how to secure a position by distinguishing its claims from those of the Chinese, and the outcome of such clarification with a referential implication of Taiwan’s independence.

Taiwan’s South China Sea Policy before the 1980s: Solidifying the Legitimacy of Ruling via Sovereignty Claims

Amid rising tensions involving multiple players, largely driven by the quest for energy, the Republic of China (the ROC, Taiwan) had long been a quiet claimant who laid its claim over the South China Sea far before the rest. By publishing a map with an eleven-dotted line (later revised to the nine-dotted line, also known as the U-shaped line, or nine-dash line) as early as in 1947, Taiwan became the first to chart this

7Taiwan in the South China Sea Disputes: Policies and ProspectsHui-Yi Katherine Tseng

Taiwan in the South China Sea Disputes 129

sea lane chokepoint, at a time when Mainland China remained under its purview (Li & Li, 2003). Nevertheless, in 1949, the Chiang administra-tion retreated to the island, after being defeated by Mao Zedong’s Chinese Communist Party. On the one hand, Taiwan sustained its rivalry against Mao’s China. On the other hand, Chiang and his predecessor adopted a proposition upholding claims over the South China Sea similar to Beijing. Treading on this route pending a solution to the island’s sover-eignty, Taiwan has steered itself into uncharted waters when its claims regarding the South China Sea issues have long been marginalised, with the voices of the people unheard.

Based on the U-shaped line, Taipei claimed around 90% of the South China Sea, without specifying whether the area fell within its territorial waters, or as maritime spaces that brought along economic interests to the island. In actuality, Taiwan has not acceded to the United Nations Convention of Law of the Sea (UNCLOS), despite it having passed rele-vant domestic legislation to demarcate its coastal and adjacent waters and extending its claims to islands in both East and South China Seas.1

Still upholding the historical U-shaped line map, Taipei regarded great swathes of water in the South China Sea as its historical waters, including the Spratlys, the Paracels, Pratas Islands, and the Macclesfield Bank (Sung, 2012), which are based on “history, geography, and interna-tional law” (MFAT, 1969).2 However large its maritime territorial claims over the South China Sea are, Taiwan’s actual control is restricted to the Pratas Islands in the North, and the Taiping Island or Itu Aba, the largest in the Spratlys. The map, along with this proposition, was later revised to the nine-dash line as endorsed by the then Prime Minister of the People’s Republic of China, Zhou En-Lai (Singh, 2012).

During the two generations of the Chiang administration (Chiang Kai-Shek, from 1949 to 1975; Chiang Ching-Kuo, from 1978 to 1988), despite the lingering hostility across the Taiwan Strait, the two sides had seemingly reached a tacit understanding over South China Sea issues (Liang, Wei, & Yimin, 2010). Essentially, both sides would not protest against the other’s territorial claims over disputed waters3. Rather, on certain occasions, they would manage to reaffirm the nine-dash line and territorial claims.

The South China Sea issues caught public attention when the Filipino Navy boarded and claimed to have “discovered” an island in the Spratlys in 1956 (Fu, 1980; Tsai & Lin, 2001; Lin & Song, 2006). Both Beijing and Taipei staged formal protests against Manila. Due to the incident, Taipei had formally stationed troops on the Itu Aba from 1956. In the late 90s,

130 Hui-Yi Katherine Tseng

the Coast Guard Agency then replaced the troops and this remains the case even today.

Taiwan’s South China Sea Policies in the 1990s: In search of a New Identity?

It was not until the late 1980s when Taiwan confronted with challenges to its claims in the South China Sea once again. In 1989, a clash erupted between China and Vietnam, leading to Chinese occupation over the entire Paracel Island group, despite the attempt of a unified Vietnam to retake the islands in the aftermath. While an earlier clash in 1974 was not regarded as a complicated military manoeuvre that required significant naval force deployment, those in the late 1980s indicated an increasing preparedness by China to act assertively in these waters.4 This latter proposition earned support, when Beijing passed domestic legislation regarding territorial seas in 1992. The Chinese continued to uphold the position of indisputable sovereign rights over great swathes of marine space that were reaffirmed in Article 2 in that legislation (China Legal Service, 1992).

Intermittent skirmishes on the sea also drew Taipei’s attention, when the then minister of interior, together with a group of government officers and parliament members, set foot on the Tai-Ping Islands (the Itu Aba). He erected a monument highlighting Taiwan’s sovereignty claims over the South China Sea and actual control over the island (Tsai & Lin, 2001, p. 168). In the early 90s, Taiwan experienced a wave of democratisation, which was featured by the inclusion of more elites from the Taiwanese local community. It underwent a transition from an authoritarian regime to one embracing democracy inclusive of the Taiwanese people; Taipei was then prepared to tackle the South China Sea issue in a more active manner.

First Half of the 1990s – Déjà vu of the Claims

The 1990s are marked as a key period when Taipei’s South China Policy began to change. The first half of the decade (until 1995) witnessed a more active efforts by the Lee administration (the former president Lee Teng-Hui), to assert claims in the South China Sea.

In July 1989, a special committee was convened under the Land Administration Department of the Ministry of Interior for drafting baselines and demarking territorial seas and Exclusive Economic Zones (Nordhaug, 1999). The committee re-confirmed that Taiwan’s claim encompassed large parts of the South China Sea as “historical waters,”


a position echoing the 1947 map. The Ministry of Foreign Affairs reit-erated this position by claiming in July 1991, that the Pratas, Paracels, Spratlys, and the Macclesfield Islands were integral parts of Taiwan’s territory (Tsai & Lin, 2001, pp. 168–170).

It was in 1990 that Taipei erected landmark monuments in the Pratas and Spratlys Islands respectively (Cheng-Yi, 2003) to emphasise on its territorial sovereignty further (Tsai & Lin, 2001, p. 168). Following such movement, the Ministry of National Defense then announced a 4,000 metre prohibited sea zone, and a 6,000 metre restricted sea/air zone around the Itu Aba and the Pratas Islands, which were reserved solely for Taiwanese vessels and air transportation. In two further occasions, Taipei reiterated its territorial claims, one in the Bandung Conference in July 1991, and the other in the informal South China Sea Workshop held in July 1992, at Yogyakarta, Indonesia (Tsai & Lin, 2001, p. 170–173; Lin & Song, 2006, p. 153–162). In order to better tackle these complex prob-lems, an Inter-Ministerial Task Force (the Force) in charge of the South China Sea issues was established under the Executive Yuan (the highest organ in policy promulgation and implementation) in 1992 (Lin, 1997, p. 325).

In an apparent attempt to solidify its claims in 1993, the Policy Guidelines for the South China Sea (the Guidelines hereafter) was enacted (Sun, 1995, p. 3). Replacing a passive declaration of sover-eignty in the past, the Guidelines became the basic legal framework for future policy promulgations and implementation. The essential goals of the Guidelines were to safeguard sovereignty over islands in disputed waters through an increasing military presence, among which peaceful settlement of the disputes was regarded as a supreme goal (Sun, 1996, p. 49–51).

Simultaneously, in 1994, Taiwan had successfully launched a police patrol southward to the Spratlys. The mission was to protect Taiwanese fishing boats from pirate attacks, and to crack down on smuggling. Not surprisingly, the patrol symbolically demonstrated Taiwan’s sovereignty over the disputed waters. Interestingly, other claimants did not vigor-ously protest against Taipei.

In 1995, however, things began to change as tensions escalated due to the confrontation between the Philippines and China over the Mischief Reef. Some episodes also occurred between Vietnam and China. Relations between Taiwan and Vietnam began to sour, due to a maritime friction when the former’s marines fired at the latter’s vessel that was trespassing upon the Itu Aba prohibited sea zones (Tsai & Lin, 2001). Taipei insisted that the Vietnamese vessel violated the prohibition order, while Hanoi


charged Taipei with undertaking a construction project on a reef in the Spratlys. As a result, Both Hanoi and Manila launched formal protests against Taiwan’s marine patrol originally scheduled for April 1995. Thus, the mission was retracted on 2 April, after reaching the Pratas, which was under the control of Taiwan. Taipei justified halting of the mission over the need to prevent further deterioration of the regional maritime order. Taipei has stopped initiating other patrols into the Spratlys area ever since.

The Late 1990s: Changes in Positions

The second half of the 1990s had witnessed a turnover of Taiwan’s South China Sea policies. Indeed, former president, Lee Teng-Hui, in his first term, when taking over power from the suddenly deceased president Chiang Chin-Kuo in 1988, paid considerable attention to the South China Sea issues and adopted several responsive measures to tackle rising tensions. Nevertheless, it was during his second term of presi-dency, from 1996 to 2000, that Taipei pursued multifarious approaches, which led to the adoption of a swaying position with ambiguous messages over this issue.

As early as in 1993, Lee proposed a “look south” policy to boost economic ties between Taiwan and its Southeast Asian neighbours. As a strategy to counterbalance the gradual reliance of the island’s economy on a rising China, he urged the development of a stronger economic cooperation and more robust political exchanges, much to Beijing’s irritation. In 1994, Lee undertook a visit to Southeast Asian countries – dubbed as a new direction of Taipei’s foreign policy – to strengthen diplomatic ties in a low-key manner by stimulating trade relations, cultural exchanges, and informal visits by the leaders (Tsai & Lin, 2001, pp. 24–30). China’s phenomenal economic growth and potential continued to lock in large numbers of Taiwanese enterprises, which heavily relied on cheap labour costs, land supplies, and preferen-tial tax privileges, in the Chinese domestic market.

Hence, in 1995 Lee halted the patrol mission to the South and, after confronting protests from Manila and Hanoi, adopted a softer tone in response. Lee commented that it was not necessary to sail down the far south to protect Taiwanese fishing practices (Tsai & Lin, 2001, p. 169). This indicated an emerging shift in Taipei’s South China Sea policies. Following Lee’s capricious attitude, in 1998, the Legislative Yuan (the Parliament) passed the Law of Territorial Seas and Contiguous Zones of the Republic of China (Song, 2000, p. 93). The paragraph stating the “historical waters” claim over the South China Sea was deleted, due to


objections raised by legislators from the opposition force, the Democratic Progressive Party (the DPP hereafter) (Song, 2000, pp. 93, 98).

In November 1999, the Ministry of National Defense announced that troops stationed on the Itu Aba would be replaced by the Coast Guard Agency. The ministry clarified that this re-deployment was conducted under the instruction of the highest authority and a reflec-tion of the nation’s future development goal. Since then, the Coast Guard Agency has maintained a group of 110 officers on the Itu Aba. This force is in charge of responsibilities of security control, regular practices of protecting fishing vessels, along with the maintenance of other facilities on the islet, like weather stations, a lighthouse, and an air strip.

Deciphering the Shift of Attitudes

The late 1990s were a period when the Taiwanese position over the South China Sea delivered mixed messages. Taipei appeared to undertake some modifications of its previous legal basis. It no longer upheld its historical water claims under the newly enacted law of territorial sea and contig-uous zones. This change had earned momentum, as evident from the redeployment decision of Taipei to station a semi-military force on the Itu Aba in the Spratlys. Despite these developments, Taipei continued to retain its sovereignty claims.

Several announcements coming from Taipei began reflecting back to the historical claims that had persisted on since the 1950s. In 1998, the Executive Yuan made the first announcement of territorial baselines of the Pratas Islands and the Maccelesfield Bank (Song, 2000, p. 96). It decided to delay the demarcation of the baselines of the Spratlys Islands to prevent further deterioration of the regional order. Along with the demonstration, Taipei reiterated its territorial claim over the Spratlys, as well as all other features within the U-shaped line.

In 1999, the Inter-Ministerial Task Force decided to promote tourism in the South China Sea (Song, 2000, p. 96). Construction plans of a harbour on the Itu Aba, as well as other facilities were also approved. The Executive Yuan also published the first draft of the White Paper of Marine Policy, in which Section 2 of the Third Chapter addressed the maritime rights and interests, and national security policies (Song, 2000, p. 96). The Taiwanese goals of managing the South China Sea were explicitly declared in that section, with the objective of maintaining regional peace and security.

Taipei seemed to be swaying in the late 1990s. Its position appeared to be rather unpredictable. It kept derailing from the original track on


the one hand, while its reactions were underlined with a continuation of the age-old claims on the other. The later position was demonstrated when formal protests were staged against Malaysia and the Philippines in 1999 when, both claimed sovereignty on two newly occupied reefs and shoals in the Spratlys group (Song, 2000, p. 96).

The hesitation, arguably, could be attributed to the island’s long-awaited pursuit of democratisation, which brought along a reshuffle of national identity with an un-intended result of delinking its Chinese connection. This has impacted Taipei’s perspectives toward the South China Sea disputes when certain self-restraining measures then kicked in to limit Taipei’s policy choices.

Entering the Twenty-First Century: Fumbling Forward with Uncertainties

After Chen Shui-Bian (on behalf of the opposition force, the DPP) came into power in 2000, there seemed to be no unified and consistent marine policy over the South China Sea issues. Chen seemed, in a more apparent manner, to use the South China Sea issues as a means to earn political credits for the interests of the ruling opposition party.

In 2000, Chen paid a visit to the Pratas, symbolically demon-strating Taiwanese sovereignty thereupon, and reiterated the need for a peaceful settlement of the South China Sea disputes as a guiding principle (Hsu, 2000). The Chen administration then shifted to a low-key profile, when it was inclined more towards adopting a more responsive attitude to escalating tensions in the South China Sea from time to time. It did not continue to follow the South China Sea Policy Guidelines enacted by the KMT government. Moreover, it did not it stage formal protests to other territorial claims made by the Association of Southeast Asian Nations (ASEAN) parties as frequently as previous administrations.

Despite the indifference, its attention to the dispute was revived again in 2003, when the then Minister of Interior went on a patrol southward to the Spratlys.5 The long-halted Inter-Ministerial Task Force, which was established in 1992 and had been terminated since 2000, was resusci-tated in 2004. In October 2005, the DPP government re-initiated the construction plan of an airstrip on the Itu Aba. The construction was completed in 2008 and Chen visited the Itu Aba for its inauguration by an Air Force Transportation Plan and announced the South China Sea Initiative (Li , 2008). The initiative was regarded as a clear expression of the DPP’s standing toward the South China Sea issue, and had been


followed by subsequent administrations suit till present (Hsiao, 2011; Hsiao & Wang, 2012).

Nevertheless, the DPP government did not make substantial move-ments beyond verbal demonstrations during its eight-year reign.

After 2008, current president Ma Ying-Jeou (also the KMT Chairman) had aimed to return to the previous proposition of upholding historical justification and indisputable sovereignty based on the U-shaped line map. In general, the Ma administration continued to pursue 1993 Policy Guidelines.6 Echoing Ma’s decisions, the Ministry of Foreign Affairs also adopted a more assertive posture, in response to the inclusion of some islands in the Spratlys within Philippine territorial sea baselines in 2009 (Trang, 2009). Taipei staged a protest against Manila over its unilateral acts, and adopted measures, such as summoning the Filipino representa-tive to Taiwan to express its objections.

On another occasion, Taipei’s assertiveness was rather apparent. It reiterated its sovereignty over the South China Sea and related mari-time features in its declaration against Malaysia in 2009. This was when the Malaysian prime minister boarded on Swallow Reef of the Spratlys to shore up his country’s sovereignty claim. These episodes indicated a shift in the policy direction of the Ma administration, which responded differently from the Chen administration. The latter either shrugged off this issue or obscured words to avoid antagonising Taiwan’s neighbouring countries, the ASEAN community and its crucial security partner, the United States. Dubbed as the most persevering, having the strongest in attitude and clearest in words, regarding the South China Sea issues in a decade, the Ma administration’s objective has been to push through the inclusion of Taiwan into international negotiation forums for the on-going dispute.

The revival of Taiwan’s interests in the South China Sea issues is not in any way, straightforward. After the KMT regained power in 2008, Beijing had repeatedly called for extensive cooperation across the Taiwan Strait over the issue.7 Beijing’s push has placed Taipei in a dilemma. Choosing, to cooperate, or not, would inevitably antagonise certain stakeholders and trigger diplomatic backlashes, a price unaffordable for the island to pay given its unresolved sovereignty status.

Two episodes further lend support to this dilemma. On 7 June 2011, a press release by Taiwan’s Ministry of Foreign Affairs articulated Taiwan’s support for the US position that safeguarded freedom of navigation (Hsiao, 2011). This statement aroused a hortatory response by the Taiwan Affairs Office in the Chinese State Council. The response stated that people from both sides, across the straits, were shouldered with


the responsibility to safeguard the sovereignty over the islands and the surrounding waters in the South China Sea (Hsiao, 2011). The reconsid-eration by the Taiwanese defence department to deploy a naval fleet to the Itu Aba and the Spratlys on a route mission provokes further discus-sion (Lin, 2008). The Taiwanese navy did not respond to the speculation that Taipei was siding with Washington by an explicit endorsement of safeguarding the freedom of navigation. Yet, the navy did reply that these missions were pre-scheduled on a robust basis, for the fear of the scarce supplies of the coast guards stationed on the islands.

Taiwan’s Modern Interpretation of the South China Sea Disputes

Over the decades, cross-strait cooperation in jointly developing marine resources in the South China Sea had been constantly proposed, mainly by Beijing.

In July 1992, China invited Taiwan to jointly develop oil and gas resources near the Spratlys during the South China Sea workshop held in Indonesia (Lin & Song, 2006). The state-owned Taiwanese oil company, the Chinese Petroleum Company (the CPC), was to participate with a Chinese counterpart, the China National Offshore Oil Corporation (the CNOOC). The Taiwanese company did not accept the offer due to policy restraints that state-owned companies could not invest in the Mainland or any Chinese-related business.

In August 1995, the two reached a preliminary agreement on joint oil exploration off the Pearl River Delta near the Pratas (Lin & Song, 2006; Tsai & Lin, 2001). In July 1996, the two signed a contract to conduct a seismic study of a 15,400 square kilometre area. However, cross-strait relations turned sour due to Lee’s visit to the United States in June 1995. Taipei then tightened its control on Taiwanese investment projects in the mainland in mid-1996. The project had not resumed until August 1998, when the head of the Taiwanese company visited the mainland to resume the joint exploration plan (Lin & Song, 2006; Tsai & Lin, 2001). The plan had been put to rest after 1998 and was only resuscitated after Ma came into power in 2008.

Besides cross-strait cooperation, Taiwan also explored the chance to cooperate with the ASEAN community in the 1990s. In August 1995, former president Lee proposed that a joint company, comprising of 12 claimants and stakeholders to the dispute, with investment of up to US$10 billion, might provide an alternative to the current stalemate (Ring, 2012). Lee originally put forward this idea in 1993. The 1995


plan was said to be more detailed and comprehensive. Lee’s proposal, which was aborted at that time, had later been revived by the opposition force on the island, the DPP, later in 1996 (Song, 2000). DPP legislators proposed to open a special account in the Asian Development Bank to manage the investment fund and profits.

In 2008, when Ma Ying-Jeou was running for the presidential election, he vowed to promulgate a marine policy, which would be adaptable to the changing security environment while also serving Taiwan’s best interests. Reiterating sovereignty claims over the East and South China Sea, which had long been muted under the Chen administration, Ma relied on the historical rights arguments, and confirmed that joint exploration and development were important pillars of his future marine policies. He also stressed on the impor-tance and expressed willingness to resume fisheries talks with China and Japan.

Regarding joint development, Ma actively pushed forward research on the South China Sea areas in 2008 after inauguration of his first presi-dency (Kan & Morrison, 2013). The study was conducted by an inter-ministerial group, under the command of the National Security Council, who was directly answerable to Ma. In the first cross-straits talks in the Ma administration in June 2008, the research results had constituted an integral part to the negotiation contents. This indicated that both Taiwan and China were willing to resume joint exploration and devel-opment of the South China Sea areas.

At the end of 2008, the CPC, signed a preliminary agreement with CNOOC concerning a cross-strait agreement to jointly develop the South China Sea areas (Xinhua, 2008). This agreement, albeit embry-onic, represented a step forward to break the deadlock of cross-strait cooperation in the South China Sea issue for almost a decade. Still, there is much effort and political will required in putting this plan into real practice. In July 2011, Taipei announced that this agenda would not be on the negotiation list of the next cross-strait negotiation talks (Hille, 2008).

Implications and Prospects – All Politics Are Local and Global

Among various arguments advancing Taiwan’s claims, those of a histor-ical nature, either phrased as historical rights or historical waters, grab most attention. A preliminary sketch helps identify these controver-sies. On one hand, claims based on historical arguments have yet to be


universally recognised as a well-developed international legal principle, let alone its further codification in relevant international treaties. On the other hand, Taiwan’s historical claims would cause more confusion, due to the pending dispute of its sovereignty and the fact that Taiwan and China hold similar claims over the South China Sea.

As discussed in previous sections, the “U-shaped” line was drawn and officially issued by the KMT government in late 1940s. Yet, the proposi-tion has been followed and upheld by the Communist Party of China government in Beijing. From then on, Taipei had continued to uphold this position, while it made consistent statements up to the 1990s (Fu, 1994).

The 1990s witnessed a growing political force that advocated an independent Taiwanese identity. The DPP in particular, Taiwan’s major opposition party, used issues like the South China Sea and the Diaoyu/Senkaku Islands territorial disputes, to depict a growing connection between Taipei and Beijing (Chen, 2003). The Law of Territorial Sea and Contiguous Zones serves as a good example of such a tussling.

Article 2 of this law defined the concept of territorial seas.8 In this provision, the term “historical waters,” as had been consistently upheld by the KMT government for decades, was removed. Legislative history depicts that vigorous political wrestling took place while the draft was being reviewed (Fu, 1994). In a nutshell, the DPP was concerned that inclusion of the term would make other claimants easily believe that Taipei had sided with Beijing by advancing similar historical argu-ments, which would have unduly compromised its rival sovereignty claim against Beijing’s. Other objections were based on the worries that, by juxtaposing the term “historical waters,” together with “territorial sea,” Taipei’s intention, when contending for “historical waters,” lies on eventual incorporation of the South China Sea as its own territorial sea, not to mention derivative rights and economic interests therewith. Evidently, consequences from both stances would harm Taiwan’s posi-tion, making Taipei more marginalised in the South China Sea negotia-tion forums.

For decades, Beijing has consistently, and via multiple channels, called for substantial cross-strait cooperation over the South China Sea disputes. To Beijing’s ire, Taipei has continuously remained cautious, or refrained from echoing Beijing’s appeals.9 The re-emergence of tensions since 2009, as a consequence of China officially endorsing the U-Shaped line reflects the difficulties in achieving possible compro-mises. Nevertheless, Taiwan would need to focus on two main concerns before it could secure a sound position in relevant negotiation forums.


First, a total disregard of historical arguments would imply a change in the current Constitution of the Republic of China. It still brings under its sovereign and jurisdictional purview Mainland China and the South and East China Sea islands. Second, how does Taipei thus distin-guish and justify its claims from the Chinese, especially when doing so would probably raise the question of Taiwan as being an independent country?

Party Politics Taking the South China Sea Policies as Subtle Recalibration

Domestic party politics and cross-strait relations are key factors in analysing Taiwan’s policy on the South China Sea issues. In other words, the two biggest parties (the KMT and the DPP) on the island hold conflicting views over the issue. This, via rotation of power, projects with inconsistent policy standings persist across different time periods. Another factor with crucial influence is cross-strait relations, which also contributed to the recent recalibration by the Ma administration in responding to new rounds of territorial friction in the East and South China Sea.

The KMT and DPP hold similar views, in issues like joint development and peaceful settlement of the dispute. They both advocate strength-ening Taiwan’s territorial claims (Chen, 2003) to promote marine resource reservation and environmental protection. They aim to establish a joint development mechanism incorporating claimants and stakeholders. They both encourage peaceful settlement of the disputes, and promote inter-state cooperation to jointly maintain regional peace and security. Yet, they diverge in two main areas. Procedurally, they disagree in the design, the authority, and the operation model of the decision-making mechanism. The Inter-Ministerial Task Force established in 1992, and its operation model. This Force, ideally, was thought to inaugurate a new era for the KMT government in tackling the South China Sea issues. Yet, its performance and achievements were far from satisfactory. Second, they vary in terms of the historical rights claim, which had long consti-tuted a core element of Taiwan’s claim.

Fragmented Administration

The Inter-Ministerial Task Force was facilitated under the Ministry of Interior, which dragged into it group personnel from various minis-tries and agencies (Chen, 2003). The motivation was bona fide, indeed. However, serious shortage of human resources, in either quantity or


quality, has dampened its performance in the end. Personnel recruited were either lacking in professional expertise, or too occupied with their original business to spare extra time for the South China Sea issues. Officers were reluctant, or practically resistant, to effectively managing the originally complicated South China Sea issues, better. This, in turn, drove them further away from the central focus.

Apart from the lack of manpower, budget limitations also posed great challenges to its operation (Lin & Song, 2006). These drawbacks are reflective of a structural shortcoming of Taiwan’s contemporary South China Sea affairs administration: the absence of a high-level ministry to coordinate among various agencies and oversee the performance outcomes. The shortcoming has not been duly addressed till now when the South China Sea tensions turn out to be more fierce and pressing.

The downside could yield penetrating damages. To say the least, the halting of the 1995 patrol justifies this concern. While regional wari-ness and geopolitical concerns from other claimants should be seri-ously considered as a primary factor for the termination of the mission, opposing views amongst various agencies in terms of the implementa-tion of the patrol significantly dampen Taipei’s incentives to table the issue. In sum, when the patrol was forcefully halted, the Defense Ministry opined that such a mission should have been carried out by the Interior Ministry and not by one in charge of Foreign Affairs (Lin & Song, 2006). Such cacophony was not unique, as there existed disharmony, among governmental departments, with regard to who should be in charge of the task force when it was first established in 1992.10 Internal fragmenta-tion paralysed the administration from its ability to respond in a timely fashion, let alone to promulgate beneficial, yet feasible policies.

Nevertheless, on realising how significantly the South China Sea issues might shape Taiwan’s external and cross-strait relations policies, the DPP legislators urged the Lee administration, to re-accommodate the Force to be under direct command of the President, in the early 1990s. The KMT rejected this proposal. The KMT felt comfortable with the current design, to facilitate the Force under the domain of the Ministry of Interior, which in turn signified that the South China Sea issues was considered a domestic affair under the purview of the Taipei authority.

The Biggest Challenge: Historical Claims

Another dimension that distinguishes the KMT and the DPP’s position lies in the historical claim over the South China Sea. Broadly, the KMT’s standing, from the two Chiang administrations to the present, resem-bled those of China.


The DPP, on the contrary, disfavoured this position and proposed to disregard the words of historical rights when drafting the Law of Territorial Sea and Contiguous Zones of the Republic of China in 1998. They held that such historical arguments were ambiguous and legally unsound. Rather, the DPP suggested that Taiwan should focus on the management of the Itu Aba and the Pratas, where Taiwan had actual control.

Instead of the unclarified contents of the historical rights claim, the DPP seemed to be more wary of the derivative connection with China thereon. In the DPP’s view, acclamation of the historical rights claim serves as recognition, though implicit, of the Chinese idiosyncrasy of contemporary Taiwanese culture, a bad penny that the DPP has vowed to eliminate.

The DPP’s concern is not uncommon, and, interestingly, it was echoed by former president Lee on certain occasions. As an anomaly, Lee was bred as a KMT high-level official, but from a Taiwanese local family. Based on this, he made a surprising turn in Taiwan’s South China Sea policy while serving both the second term of presidency and as the KMT Party chairman. In sum, there existed contradictions, between him and the KMT, when Lee later shifted policy focus to more on economic exchanges with the ASEAN community. This would inevitably silence Taiwan’s sovereignty claims and wipe out policy alternatives against other claimants’ acts.

Following the two former presidents, major KMT elites undoubtedly wish to maintain the historical claim to the Taiwanese sovereignty over the South China Sea. Accordingly, they reacted strongly when-ever such rights were challenged. However, Lee’s opinions had tried to overturn the long-held proposition, with a purpose of watering down the derivative sovereignty implications thus generated. This observation could be further supported by the policies advocated during his second presidency. Examples are clear, as the “look south” policy initiatives aim to boost the Taiwan-ASEAN economic ties, and his rather passive attitude in resuscitating the interrupted 1995 patrol mission. Closer economic ties between Taiwan and its neighbouring ASEAN countries may lead to cross-strait tensions, as China might interpret this as a deviation from Taiwan’s original proposition, which would eventually lead to renunciation of its historical rights claim. For the patrol mission, Lee tried to tackle the issue by means of a low-key approach and never sent other missions southward. In short, Lee’s positions and movements had concurred more with those of the DPP.


Prospects in Taiwan’s South China Sea Dilemma

The South China Sea issue also reveals an ever-lasting dilemma for Taiwan, regardless of who is currently sitting in the Presidential Hall in Taipei. Issues of foreign relations cannot be distilled from cross-strait relations. This conflation creates and further solidifies the dilemma of a pending sovereignty attribution of the island. As described by a Taiwanese scholar, in the South China Sea disputes, continuing coopera-tion with Beijing has put Taipei in a difficult position, “Beijing says we need to work together on the South China Sea, yet they exclude us from dialogues. But if we cooperate with China, ASEAN, then the US, gets upset that we’re siding with China.”11

Taiwan is prevented from joining the international community, due to, mainly, the condition of one China policy. Thus, the DPP’s strong advo-cacy toward de-Sinification undoubtedly affects its understanding and position toward the South China Sea issues. While the DPP’s concerns of the obscurity and unsound basis of the historical claim are not ground-less, such views cannot be easily upheld either. Despite political disputes across the Strait, Taiwan and China share a common heritage of culture, history, language and a bond of kinship. By denying these ancestral connections, the DPP has enmeshed itself in a difficult situation.

Current president Ma has adopted a relatively low-key approach in dealing with recent South China Sea frictions. He is careful enough not to side with either China, or ASEAN, but emphasises that Taiwan is advocating the freedom of navigation for the benefit of the interna-tional community as a whole.

Ma’s movement can be construed in two senses. On one hand, he tries to recalibrate Taiwan’s positions and thus, evaluates advantages in a rapidly changing strategic environment. Coupled with the possible deployment of marine vessels and additional military assets to the Itu Aba, the Ma administration may signal a reconsideration and shift of its position in maritime disputes vis-à-vis China. By distinguishing Taiwan’s position from those of China, with a particular focus on the freedom of navigation, Ma manages to reassure neighbouring ASEAN states and the United States that Taiwan will maintain a balance while still pursuing cross-strait rapprochement.

Meanwhile, such a move may help dismiss mounting criticism that targets Ma’s rapprochement measures with China, they may spoil the balancing act Taiwan uses to hedge between China and the United States. If ever China requires Taiwan’s support in these issues, it must use extra leverage to ground Taiwan’s cooperation.


The South China Sea issues pose harsh, yet, ironically helpful pres-sures on Taiwan. They provide a genuine test to Taiwan’s contemporary policies concerning the few foreign relations with stakeholder countries of security, intelligence and national defence issues, and of the unique cross-strait relations.

Scholars argue that Taipei has long been lukewarm in promulgating and implementing the South China Sea policies that help in solidifying and defending Taiwan’s interests (Lin & Song, 2006). While the pending sovereignty dispute of Taiwan indeed exacerbates the complexity, the island may need to reconsider if its decade-long policies, regarding both the East and South China Sea, now require reconsideration.

Succinctly, Taipei has long been playing the game of big-country diplomacy with a small-country capacity. In an issue as complicated as the South China Sea, claimants can wield relatively limited national prowess. Hence, international law, strategic allies, abundant historical evidence, and effective controls may be of particular importance. That said, Taiwan’s performance, by any measurement, requires a lot of improvement. Of primary importance however, will be the clarification of the historical claim and its derivative positions in this issue. How Taiwan identifies itself, when facing the Chinese and the international community, will decide the prospects of its role in the future South China Sea disputes.

Notes

1. Taiwan passed laws regarding territorial seas, contiguous and exclusive economic zones and continental shelves in 1998. Though it is not a member of the law of the sea regime, the laws largely conform to its principles, endowing similar rights and interests to Taipei in utilising adjacent maritime spaces to the island (Law on the Territorial Sea and the Contiguous Zone of the Republic of China, 1990); (Law on the Exclusive Economic Zone and the Continental Shelf of the Republic of China, 1998).

2. President Ma Ying-Jeou (2008-present) has reaffirmed sovereign claims laid by the Taipei government (ROC, Taiwan) over the South China Sea.

3. It should be noted that both sides would be refrained from launching protests or objections to the other’s claims. However, no explicit endorsement or approval would be expected either.

4. Some opined that this Chinese military act was not significant, and required no complicated deployment to rival with. The United States then was in no mood to intervene, which in turn required certain cooperation from China over its disengagement from Vietnam. The US calculations not to intervene into the sea skirmish were partly out of the consideration to incorporate China to help curbing the Soviet Union. See Beukel (2010, p. 7).


5. China owns indisputable sovereignty to the South China Sea, Sohu News, 3 February 2009.

6. The Guideline was developed and put into policy papers in 1993, by a task force aimed at better planning and coordinating of the South China Sea policy-making of Taiwan.

7. In more than one occasion, Beijing had expressed such concerns. Xuezhe Huyu Liangan Jiaqiang Wushihezuo Yi Weihu Nanhai Liyi [Scholars call on cross-strait cooperation to defend Chinese interests in the South China Sea], I-feng News, 11 July 2012.

8. Law on the Territorial Sea and Contiguous Zone of People’s Republic of China, Article 2.

9. See ICG (2012).10. Lin & Song (2006, p. 141). At that time, there emerge vehement debates of

whom to be in leading position in this task force, as the Interior Ministry regarded the Executive Yuan to be the appropriate candidate, while the Foreign Affairs Ministry opined that the Interior Ministry would have taken the burdens.

11. See ICG (2012, p. 12).

References

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Chen, H.-J. (2003). The Assessment of the Sovereign Dispute and the Republic of China’s Policy toward the South China Sea: An International Law Perspective. Master’s thesis, National Chengchi University.

China Legal Service. (25 February 1992). Law on the Territorial Sea and Contiguous Zone of People’s Republic of China. Article 2. Retrieved 28 November 2013, from First, the national laws of the Macao SAR: http://www.chinalegal.com.hk/index.php?option=com_content&view=article&id=111:113–1992–02–25&catid=54:2010–03–08–17–58–09&Itemid=137

Fu, K. (1980). anhai de Zhuquan yu Quangcang: Lishi yu Falv [Sovereign Rights and Mineral Resources of the South China Sea: A Historical and Legal Perspective]. Taipei: Youth Press.

Fu, K. (1994). Woguo Nanhai Lishixing Shuiyu yu Qizhong Daojiao zhi Falvdiwei [The Legal Status of Historical Waters and Islands in the South China Sea]. Review of Social Sciences (42), 149–183.

Hille, K. (6 2008). cpc Hopes to Revive Ties with cnooc. Retrieved 10 March 2014, from Financial Times: http://www.ft.com/intl/cms/s/0/a4885174–1b86–11dd-9e58–0000779fd2ac.html#axzz2vWgycnsf.

Hsiao, L. R. (2011). Taiwan Pivots in the South China Sea. China Brief, XI(11), 1–2.

Hsiao, R. a.-P. (2012). Taiwan Rebalances in the Near Seas. China Brief, XII(16), 9–12.


Hsu, B. (22 December 2000). President Chen visits Pratas Islands for first time. Retrieved 6 March 2014, from Taipei Times: http://www.taipeitimes.com/News/local/archives/2000/12/22/0000066524.

ICG (International Crisis Group). (July 2012). Stirring Up the South China Sea (II): Regional Responses. Retrieved 28 November 2013, from International Crisis Group, Asia Report, Nº229: http://www.crisisgroup.org/~/media/Files/asia/north-east-asia/229-stirring-up-the-south-china-sea-ii-regional-responses.

Kan, S., & Morrison, W. (2013). US-Taiwan Relations: Overview of Policy Issues. Congressional Research Service Report, R-41952.

Li, J., & Li, D. (2003). The Dotted Line on the Chinese Map of the South China Sea: A Note. Ocean Development & International Law, 34, 87–295.

Liang, F., Wei, W., & Yimin, Z. (2010). Liangan Nanhai Xiefang Lishi [The History of Cross-Strait Cooperation in the South China Sea]. Forums of World Economics and Politics, 4, 2–4.

Lin, C. Y. (1997). Taiwan’s South China Sea Policy. Asian Survey, 37(4), 323–339.Lin, C. Y. (2008). Taiwan’s Spratlys Initiative in the South China Sea. China Brief,

8(4).Lin, C., & Song, Y. (2006). Nanhai Qingshi yu Woguo Yingyou de Waijiaoguofang

Zhanlue [Developments of the South China Sea and the Corresponding Foreign Policy and National Security Policies]. Research, Development and Evaluation CommissionPolicy Research Report.

Mu, L. (2012). Nanhai: Liangan Xiefang Hezuo Shifou Kexing [The South China Sea: A Feasible Assessment of Cross-Strait Cooperation]. Shijiezhishi [World Knowledge], 11, 1–3.

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Ring, A. H. (July 2012). A U.S. South China Sea Perspective: Just Over the Horizon. Retrieved 28 November 2013, from Research Papers, Weatherhead Center for International Affairs in Harvard University: http://programs.wcfia.harvard.edu/files/fellows/files/ring.pdf.

Singh, T. (2012). South China Sea: Emerging Security Architecture. The Institute of Peace and Conflict Studies Special Report 132.

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Sun, K.-M. (1995). The Republic of China Tightens Its Grip on the Spratlys. L.S.I. Professional Newsletter, 39, 7.

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Tsai, Z., & Lin, W. (2001). Nanhai Qingshi Fanzhan duiwoguo Guojia Anquan he Waijiaoguanxi de Yingxiang [Developments of the South China Sea Disputes and the Implications to National Security and Foreign Relations of the Republic of China]. National Policy Foundation Policy Research Report.

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Part V

Solutions and Future Prospects

149

Tensions in the South China Sea have grown over the past few years because of a confluence of geopolitical and resource competition, mixed with an increasing domestic political debate about sovereignty and a corresponding increase in national assertiveness.1 The frictions that have surfaced since about 2009 (or, to be more precise, re-surfaced) are complex, dangerous, and unlikely to be resolved soon. While these tensions appear manageable and are unlikely to trigger war (except through miscalculation or accident), they are trending in an unfa-vourable direction. However, there are several policy options available to leaders both in the United States and China that can mitigate the tensions and help reduce the chances of conflict in these critical seas. This chapter focuses on the potential for cooperation and specific ideas for advancing US-China, and generally regional, cooperation in the South China Sea. The security situation in the South and East China Seas has deteriorated in the past few years, as disputes have multiplied and distrust has deepened. China’s assertiveness is growing, tensions in each of the seas have spilled over and produced suspicions in the other, regional institutions are not facilitating cooperation, international law is being ignored and Sino-American relations appear to be unmoored, with competitive elements outweighing shared great-power interests.

South China Sea Disputes: Recent Developments

China’s Growing Assertiveness

If Xi Jinping were inclined to revert to the longstanding policy artic-ulated by Deng Xiaoping of “setting aside dispute and pursuing joint development,” there was little hint of it as he began a 10-year stint as head of state, Communist Party leader and commander-in-chief (MFA

8The United States, China, and Cooperation in the South China SeaPatrick M. Cronin

150 Patrick M. Cronin

PRC, 2000). Addressing the People’s National Assembly in mid-March, Xi rallied delegates around the goal of achieving “the great renaissance of the Chinese nation and the Chinese dream” (AFP, 2013). He also called for the People’s Liberation Army to strengthen its ability to “win battles,” very likely an allusion to possible conflict in China’s near seas (AFP, 2013). More to the point, Xi has continued to the pre-existing Chinese policy of using a three-tiered, comprehensive maritime force comprising of civilian fishing vessels, civilian law-enforcement ships, and warships to express China’s growing claims to maritime rights and territory.

Beneath Xi’s calm demeanour is a tough man who should not be under-estimated. His father fought with Mao against the Imperial Japanese Army. To be sure, China under Xi is elevating veteran diplomats and still focusing on economic development and trade, especially in East Asia (Wan, 2013). But some of China’s neighbours are concerned about Xi’s sharp-edged neighbourhood policy. “The Chinese,” a Singaporean offi-cial told author Robert Kaplan, “charm you when they want to charm you, and squeeze you when they want to squeeze you, and they do it systematically” (Kaplan, 2012).

Maritime Disputes Are Spilling Over and Deepening

Despite the different disputes in the South China Sea and the East China Sea, rising tensions in one have affected the other. What appeared to begin with growing Chinese-Vietnamese tensions over the Paracel Islands in the South China Sea in 2009 reverberated throughout all of East Asia by July 2010, when Hanoi hosted the 27-member Association of Southeast Asian Nations (ASEAN) Regional Forum (England, 2010). It was there that the then-Secretary of State Hillary Clinton said that the United States now considered conflict resolution in the South China Sea “a leading diplomatic priority” (Katep & Gaouette, 2010). Similarly, when a Chinese fishing trawler rammed a Japanese Coast Guard ship in September 2010, East Asian countries took note, creating tensions leading up to the 2011 ASEAN Regional Forum.2 The standoff between Chinese and Filipino ships near Scarborough Reef in the South China Sea in 2012 led to Chinese de facto control of those land features and their surrounding waters, which was quickly followed by a heightened state of confrontation between China and Japan over the Senkaku/Diaoyu Islands in the East China Sea.3 In May 2013, following rising tensions in the East China Sea, the Philippines and Taiwan became embroiled in tension over the tragic shooting of a Taiwanese fisherman by the Philippine Coast Guard;4 even as both sides were continuing to debate

The United States, China, and Cooperation 151

the fatal incident, the Philippines lodged a new protest against Chinese intrusion into Ayungin Shoal in the disputed Spratly Islands (Gomez, 2013). China under Xi appeared to be bent on seizing the South China Sea one shoal at a time.

These local disputes are not just colouring the perceptions of others in the region but also show signs of growing intractability. Certainly this is the case in the East China Sea, where Japan’s conservative Prime Minister, Shinzo Abe, says that his country will not back off its claims to both sovereignty and administration of the Senkaku Islands.5 Meanwhile, China claims “indisputable sovereignty” over the same Diaoyu islands and their surrounding waters (as it continues to do over most of the South China Sea) (Guangjin & Jiao, 2010). The dispute has gradually escalated, especially since the previous Japanese administra-tion purchased privately-held leases to three of the five islands in 2012 (Perlez, 2011). Chinese maritime and air intrusions into the territorial waters and airspace now occur daily, with Beijing encouraging fishing in these troubled waters and then dispatching civilian marine surveil-lance and law enforcement vessels to exercise nominal administrative control (thereby challenging not only Japan’s claim to ownership but also its claim to sole administration). Military forces have increasingly been thrown into the mix of intrusions, and Japan has been forced to scramble fighter jets.6 In one instance in January 2013, a Chinese frigate locked onto a Japanese destroyer with its fire-control radar on the high seas surrounding the Senkakus ( Kyodo News, 2013). Whereas some believe that China’s logic may be to exhaust Japan’s limited coast guard and maritime forces, the rising tensions are accompanied by a constant and seemingly growing risk of military escalation (Holmes, 2012).

Regional Institutions Falling Short

At a time when some foresee global fragmentation, there is an increasing need for effective regional institutions.7 East Asia is famous for its so-called alphabet soup of overlapping institutions, most of which are affiliated with ASEAN. But even as that organisation approaches a 2015 deadline for advancing a unified economic community, its core principles of neutrality, the non-use of force and consensus-based deci-sion-making are all showing strain over maritime disputes in the South China Sea. Having taken a decade to produce a Declaration of Conduct of the Parties in the South China Sea, and another decade to produce broad implementation guidelines, ASEAN does not appear any closer to concluding a binding Code of Conduct. Furthermore, it is divided over whether any such Code of Conduct should be first agreed to by


all ASEAN members or crafted with China from the start.8 Meanwhile, China appears more bent on preserving the diplomatic leverage and flexibility that comes with pressing its claims and disputes on a bilateral basis rather than within a rigid multilateral framework.

Indeed, the quest for a Code of Conduct process appeared to go in reverse while Cambodia held the ASEAN chair in 2012, as the coun-tries were unable to issue even a joint declaration for the first time in its history. The disputes in the South China Sea have divided ASEAN between the four claimant states of Vietnam, the Philippines, Malaysia, and Brunei on the one side, and the six non-claimant states on the other. In addition, the non-claimant states have widely varying degrees of opposition to the claimant states, often depending on their ties with China and the United States. Among the claimant states, Vietnam and the Philippines have been at the forefront of disputes with China, which has published a map with a vague nine-dash line covering most the South China Sea to indicate its historical claims.9 It was hoped that Brunei would do a better job at addressing the dispute while it holds the ASEAN chair in 2013, but that would also be much to ask of a small country with few defences and significant economic interests at stake with China.10 Lastly, Myanmar has been the chair ASEAN in 2014 and it may simply be hoping to get through the process without creating a regional incident.

Casting Aside International Law

International law rarely triumphs over power politics and national prerogatives. Yet, the law of the sea has evolved in important ways since Swiss jurist Hugo Grotius articulated his doctrine of freedom of the seas.11 In particular, the United Nations Convention on the Law of the Sea (UNCLOS) provides the world with positive law, which is to say treaty text, which has been ratified by the vast majority of coun-tries (although not the United States, as discussed below). But that text is open to different interpretations (for instance, over what precisely constitutes an “island” or a “rock,” the crucial difference being the unde-fined natural ability to sustain human life, or exceptions to compulsory arbitration of disputes). So in January 2013, when the Philippines opted to clarify its maritime disputes with China through compulsory third-party arbitration, China summarily rejected the process and elected not to participate.12 The arbitration will continue, but without the Chinese even attempting to explain why they believe the UNCLOS provision for compulsory arbitration does not apply.13 While it may be difficult for China to ignore the ultimate verdict (especially if it casts serious legal


doubt on China’s nine-dash line, for instance), it is worrisome that key countries seem to reject international law.

US Policy Questions Linger

The US policy of rebalancing to the Asia-Pacific region has occurred against the backdrop of rising tensions in the South (and East) China Sea. A major pillar of that policy has been to reassure allies and friends that the United States would not only remain in the region, but over time enhance its comprehensive engagement there. Although US policy studiously avoids taking sides over sovereignty disputes, the United States has sought to reassure Japan that it recognises Japanese administration of the Senkakus and as such is covered under Article V of the mutual security treaty.14 Even so, Washington has also sought to preserve some strategic ambiguity, underscoring its emphasis on the peaceful resolu-tion of disputes. Like Japan, the Philippines is a treaty ally of the United States, and the mutual security treaty pledges US support in responding to attacks on Philippine ships. Yet, officials in Manila have sought to remove strategic ambiguity and win an Article V-like pledge of support in the event of escalating tensions with China. The desire of the United States not to offer allies a blank cheque but instead to retain some stra-tegic ambiguity over its support is only reinforced by mishaps such as the Philippine Coast Guard killing of a Taiwanese fisherman in May 2013.

It may be particularly hard for the United States to fully reassure some allies in a period of fiscal austerity when the long-term defence budget of the United States appears uncertain. After all, historically, past post- conflict drawdowns have led to budget cuts across all services, slowing down and purchasing fewer large assets, and reduced operations and maintenance budgets (Adams & Leatherman, 2013). But US officials stress that US rebalancing will go forward despite budget cuts. For instance, Deputy Secretary of Defense Ashton Carter repeated the Obama admin-istration’s commitment to deploy “60 percent of our naval assets ... to the Asia-Pacific region by 2020 – a substantial and historic shift” (Carter, 2013). US rebalancing, which focuses more on engagement than new basing, is also meant to be as much about diplomacy and trade as much as it is about military presence. Even so, allies and partners will be watching the US defence budget very closely. Much will depend on the duration of sequestration and the future of the US economy, as well as the extent of America’s military involvement in crises in other regions of the world, especially the Middle East.

For China, US rebalancing offers too much allied reassurance, by showing that the United States intends to preserve its military


preponderance at a time when an increasingly capable China also wants to assert greater influence over its immediate neighbourhood.15 China’s military budget continues to grow at a double-digit rate, with invest-ments in maritime modernisation and information dominance as leading elements.16 The problem is that US-China relations have not achieved a satisfactory level of equilibrium. The confrontational elements of that relationship may overshadow cooperative elements such as trade.

The answers to these problems are readily apparent to some experts, especially from the United States and Southeast Asia and including this author: China should adopt a friendlier neighbourhood policy (as it has on some past occasions); countries should exercise restraint and advance cooperation; ASEAN needs to adopt a realistic strategy to advance a binding Code of Conduct; countries must institute military confidence-building measures to build habits of cooperation and minimise distrust; and the United States and China need to embrace their enlightened self-interest and pursue a cooperative framework for bilateral relations to prevent some tensions from creating a vicious cycle of action-reaction great-power relations.17

Dialogue and Management Do Provide Hope

While none of these disputes can be resolved easily, there is a way forward that decreases some of the risk and heads toward more common ground. Leaders in China and the United States, as well as throughout East Asia, can take positive steps in four important areas: international law, regional institutions, military confidence-building measures, and balanced US-China relations.

Advance International Law

Although international law is rarely the main topic of discussion among political leaders, tensions in the East and South China Seas now require them to embrace it and expand rules-based conflict management mech-anisms. In the next two years, they can advance international law in three ways.

First, claimant countries in the region should make the Philippines-Chinese UNCLOS arbitration an important precedent. They can do this by offering diplomatic support for the basic approach, thereby putting moral pressure on China to accept the ultimate determination of the panel. After all, the panel is not deciding sovereignty but rather seeking to clarify legal questions surrounding claims, including China’s claim to the nine-dash line area covering most of the South China Sea. While


Chinese leaders may believe that a claim only applies to land features and their surrounding waters, they appear either unable or unwilling to publicly state that it does not apply to the entire body of water, largely because this would undoubtedly inflame Chinese nationalist sentiment. An independent international determination that such a claim lacks a basis in contemporary international law could encourage China to narrow its claims, which in turn could make it easier to advance joint development projects and alleviate some concerns over the freedom of navigation. Although some officials believe China will only make concessions in private, when not threatened with a loss of face, it seems equally plausible that Chinese diplomats are sufficiently agile to taking a more conciliatory line to pre-empt deteriorating rela-tions with neighbours.

Second, non-claimant countries should host an international legal and political conference to explore conflict-prevention and conflict-resolution mechanisms, including the third-party arbitration mechanism in UNCLOS. Australia, India, and others might be able to mobilise new ideas and debate best practices for managing conflicts and averting escalation. Selecting a nongovernmental conference organiser could encourage new ideas and the convener could brief the results to different bodies such as ASEAN and claimant country governments.

Third, the United States needs to fully join the Law of the Sea by ratifying UNCLOS. The United States has long sought to establish rules by which all nations can get along and prosper. US policy towards the region currently focuses on establishing a rules-based international system, but it is robbed of moral authority by the failure of the US Senate to ratify the treaty that American political, military, and business leaders have embraced (including Henry Kissinger, George Shultz, James Baker, Colin Powell, and Condoleezza Rice.)18 The United States already abides by the law’s provisions, and the commercial reasons for ratifying UNCLOS are becoming even more important. The main conservative argument is that ratification would buttress the creation of a faceless, unaccount-able international bureaucracy, has some validity; but the best way to address that concern is by joining and then shaping the administra-tive body. The United States needs to be a full participant in shaping effective institutions for global problems; the problems of the East and South China Seas are not simply local problems to be left to the largest local power. More importantly, the United States cannot be persuasive if it criticises others for not using the dispute mechanisms of UNCLOS when it has not even ratified the agreement. Thus, the failure to ratify UNCLOS limits the United States’ ability to press for positive resolution


of disputes and to establish rules of the road because the United States simply lacks credibility.

Reinforce Regional Institutions

With so many overlapping regional institutions in East Asia, there is little need for new ones. Yet, the existing bodies need to become more effective. The United States can help strengthen these institutions in three ways.

First, the United States must continue to embrace ASEAN centrality. This does not mean that ASEAN should abandon its lowest-common-denom-inator principles of consensus and neutrality. Instead, it means that ASEAN should remain the central organiser for security dialogues in Southeast Asia and the Asia-Pacific. The Obama administration has gone a long way in the past four years to recognise the importance of ASEAN, both as an organisation of 10 Southeast Asian states and as a facilitator of larger regional discussions. The decision to join the Treaty of Amity and Cooperation meant that the president of the United States would now join other regional leaders at an annual meeting, combined with the variety of other senior-level and mid-level dialogues leading up to that East Asia Summit. Secretary of State John Kerry and other officials need to maintain active US engagement with ASEAN

Second, the United States should work with ASEAN members and other regional states to support an independent survey of land features in the East and South China Seas. A systematic survey could help to clarify major issues regarding geographical features, including narrowing down the roughly 140 in the South China Sea large enough to justify their own Exclusive Economic Zone (EEZ) to a mere dozen or so.19 Though all parties might not agree on the outcome, such an objective, technical study could provide a good basis for future cooperation among those who do agree. Because islands deserving their own 200-nautical-mile EEZ would create the largest overlapping claims, reducing their number would focus diplomacy on a finite set of geographical features rather than all of them, thereby making it easier for claimant states to coop-erate on freedom of navigation and joint development

Third, the United States should move decisively forward, by completing Trans-Pacific Partnership (TPP) negotiations with expanding the economic and trade dimensions of its rebalancing policy. Commerce is ultimately the main shared interest in the region, and even when it is competitive it less dangerous than military issues. With Japanese Prime Minister Abe’s decision to join negotiations for the TPP, the burgeoning trade agree-ment finally has some wind beneath its sails. If necessary, the United


States and the other 11 nations currently negotiating initial rules for the TPP should set aside those few issues that remain too difficult to resolve to ensure that they fulfil their goal of concluding “a next-generation, comprehensive” trade and investment agreement (OUSTR 2013).20

Strengthen Military Capacity and Confidence

Military modernisation is inevitable in a dynamic and growing region. This is a key reason why Asian militaries outspent the NATO European defence forces in 2012, for the first time in recent history but mostly likely as part of a trend that is likely to continue.21 To ensure that regional militaries remain a stabilising force, the United States should support them in two ways.

First, the United States should continue to boost the capacity of allies and partners to maintain a minimal credible defence. This is particularly critical for issues surrounding maritime forces and information sharing. The main aim should not be to threaten neighbours but to help deter the first shot from being fired. But the United States should recognise that some of the most active security developments are occurring within the region, as a number of countries such as Japan, South Korea, Australia, India, and others are working with individual ASEAN members and each another to enhance their security. The United States still needs to adhere to its commitments and strengthen its presence for the long term, but these dynamics can help regional states that might feel threatened by rising neighbours.

Second, the United States should work with other countries in the region to prioritise cooperation on humanitarian assistance and disaster relief. All countries share an interest in being able to address disasters and humanitarian crises. Civil-military cooperation in these areas can not only help alleviate human suffering; it is also an important building block for inclusive regional security and cooperation. The United States could encourage ASEAN members to help establish a regionally based coordination authority similar to the United Nations Office for the Coordination of Humanitarian Affairs, to be established under the auspices of ASEAN.22 The body could improve readiness, training and effectiveness for joint responses to future crises.

Reverse the Perception toward Zero-Sum Relations with China

Many Chinese commentators believe Sino-US relations are increas-ingly and confrontational and zero-sum – that one country can only gain at the expense of the other.23 This increases the chance that incidents in the East and South China Seas will undermine bilateral relations and


thereby reduce the scope for partnership as well. US National Security Advisor Tom Donilon suggested a similar concern during a major speech on Asia policy in March of 2013. “Every Administration,” Donilon said, “faces the challenge of ensuring that cascading crises do not crowd out the development of long-term strategies to deal with transcendent challenges and opportunities.”24 The United States can do two things to reverse this perception and establish a bilateral relationship that is mostly cooperative.

First, the United States should improve military-to-military relations with China, because the most likely cause of any conflict in these seas would be the result of accident or miscalculation. As Donilon added in his recent speech, “a deeper US-China military-to-military dialogue is central to addressing many of the sources of insecurity and potential competition between us ... and it is a critical deficiency in our current relationship.” He added that, “We need open and reliable channels to address perceptions and tensions about our respective activities in the short-term and about our long-term presence and posture in the Western Pacific.”25 While there is frustration about past cooperation, including on a maritime military agree-ment that China has never fully implemented, the rising stakes require a new effort. The invitation from the United States to China to participate in biennial, multilateral Rim of the Pacific naval exercises in 2014 is the kind of initiative that may begin to reduce some suspicions and mistrust.

Second, the United States should once again seek cooperation on other pressing security issues.26 Besides searching for rules for cyber space (some-thing both countries say they want), both countries would benefit from closer cooperation in addressing North Korea’s growing nuclear and missile programs. North Korea is closing in on the ability to fashion a nuclear intercontinental ballistic missile, and given North Korea’s record of proliferating nuclear technology off the peninsula to the Middle East and countries like Iran, the two great powers share a strong interest in tamping down the threats posed by the young, inexperienced and dangerous North Korean leader, Kim Jong-un.

If the United States, China and other countries in the Asia-Pacific region can move forward on any or all of these initiatives, then the slow deterioration of stability in the East and South China Seas may yet be the preamble to future regional cooperation.

Sources of Optimism

There is no single answer to the problems of the South and East China Seas. Yet, there are reasons to be optimistic, especially because most


parties believe that war is remote and dispute management neces-sary. Economically, the seas are at the crossroads of global commerce and an increasingly vital source of both food and energy resources. Politically, cooperation in these seas is a growing test of rising Asia’s peace and prosperity, as well as a test of China’s narrative of its peaceful rise. Strategically, the South and East China Seas are the place where Chinese military modernisation is most likely to directly challenge to America’s long, post-war dominance. In other words, the East and South China Seas are central to Asia-Pacific security. The stakes are high and increasing in these seas, and all governments must place a premium on avoiding war, managing disputes, slowly building institutions and advancing joint cooperation.

In the pursuit of peace, all nations – not just the United States – will need both wisdom and deft statecraft to manage these complicated and interwoven challenges. Building new norms and effective institutions take time. While China’s future intentions cannot be known, China’s embrace of globalisation has evolved over time. Today, for instance, it regularly accepts third-party arbitration in World Trade Organization disputes, and there is some hope that in the future it will do so when it comes to maritime disputes as well. Intelligent, rules-based solutions can allow international fair play and give equal protection to the weak and strong alike.

Notes

1. Some of the information in this chapter has been taken from the author’s articles in the Centre of Strategic and International Studies and the Centre for a New American Society. See Cronin (2013a; 2013b).

2. See Auslin (2012). 3. See Holmes (2012) and (Cronin, 2012b). 4. See Whaley (2013). 5. See Sekiguchi & Nishiyama (2013). 6. For a background on Chinese assertiveness see, Hosford & Ratner (2013). 7. Further global fragmentation is a major theme in National Intelligence

Council, see NIC (2012). 8. See Storey (2013). 9. The nine-dash line, which originally included 11 lines before a 1950s agree-

ment with Vietnam covering the Gulf of Tonkin, was inherited from the former Nationalist Government of China and the claim is thus also made by Taiwan today. See Brown (2009).

10. ASEAN countries seek leverage against China through multilateral coop-eration and China prefers bilateral negotiation over areas of dispute. For instance, see Storey (2012).

11. See Oxman (2006).


12. For more on the legal dispute between China and the Philippines, see Dutton (2013).

13. See Dutton (2013).14. One notable exception occurs when a country has been invaded, as when

Iraq invaded Kuwait in 1990.15. For a discussion of recent Chinese actions and aims, see Mastro (2012).16. Office of the Secretary of Defense (2013).17. These ideas were at the centre of discussion during a recent two-day confer-

ence on the South China Sea with leading Americans, including former Ambassadors Stapleton Roy and Christopher Hill, as well as this author. See “South China Sea: Central to Asia-Pacific Peace and Security,” co-sponsored by the Asia Society New York and the Lee Kuan Yew School of Public Policy in Singapore, conducted in New York from 13 to 15 March 2013. See Asia Society (2013).

18. See Rogers (2012) and (Kissinger, Shultz, III, Powell, & Rice, 2012).19. I am indebted to Professor Jerome A. Cohen of New York University School

of Law for this idea.20. Japan announced its decision to join TPP discussions on 15 March, see

(Martin, 2013).21. See IISS (2013) and Norton-Taylor (2012).22. This has been proposed by retired Australian Lieutenant General Peter Leahy,

who is now a professor at the University of Canberra. See “Humanitarian and Disaster Relief (HADR) Missions in the Context of Changing Geo-strategic Relationships in the Asia Pacific Region,” October 2012 draft manuscript for the US Studies Centre, University of Sydney.

23. For instance, see Lieberthal & Jisi (2012).24. See Donilon (2013).25. See Donilon (2013).26. This was a major element of President Barack Obama’s first-term Asian policy

agenda. See Bader (2012).

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164

The on-going disputes amongst China, Taiwan, Vietnam, Malaysia, the Philippines, and Brunei in the South China Sea have reached an impasse as a result of heightened tensions in recent years. The fact that they involve the concept of sovereignty and that none of the claimant parties are willing to make a compromise have added layers of complexity, preventing much progress from being achieved. This has made the prospect of resolution unlikely in the near future. This chapter evaluates existing approaches directed towards resolving the South China Sea disputes. It argues that a comprehensive and durable resolution of the disputes (especially those aspects concerning sovereignty) cannot be expected in the foreseeable future. It therefore suggests that claimant parties should focus on exploring ways for better management of the disputes.

First, the article provides a brief analysis of the factors that have contributed to the heightening of tensions since 2009. Next, it exam-ines the effectiveness of existing approaches for the settlement of mari-time territorial disputes in the South China Sea: multilateral diplomacy through the Association of Southeast Asian Nations (ASEAN), strategic balancing of external powers, and legal solutions based on interna-tional law and the United Nations Convention on the Law of the Sea (UNCLOS). Given the infeasibility and inflexibility of these approaches, the article encourages all parties to initiate confidence-building meas-ures and focus on dispute management in the near future, to prevent further escalation. This includes better implementation of the existing Declaration on the Conduct (DOC), continuous efforts towards negotia-tion and drafting of Code of Conduct (COC), and multilateral coopera-tion such as joint exploration of natural resources and full utilisation of the available funding and other resources to conduct non-traditional security cooperation.

9The South China Sea Disputes: Whither a Solution?Yang Fang

The South China Sea Disputes 165

Recent Developments and Causes for Escalation

Since 2009, tensions between various claimants of the disputed islands and insular features in the South China Sea have soared. This has resulted in a souring of relations between China and some Southeast Asian claim-ants. The disputes appear to be a quagmire of issues including growing resource interest, strong national sentiment, and increased militarisa-tion and an inconclusive law enforcement capability.

On 6 May 2009, Malaysia and Vietnam jointly lodged a submission to UN’s Commission on the Limits of the Continental Shelf (CLCS). Through this, they claimed sovereign rights over resources of the seabed and the subsoil of an extended continental shelf in the South China Sea. This was met with opposition from China, which attached a map with the nine-dash line in response to the Malaysian and Vietnamese claim. The map has since attracted wide attention from international commu-nity and given rise to great concern over its legal status (Ocean & Law of the Sea, United Nations, 2009).1

China and Vietnam have been involved in an increasing number of minor incidents at sea. In 2011, there were two cable cutting inci-dents between the surveillance ships and fishing boats of the Chinese and Vietnamese oil survey ships in contested waters. The main cause for these incidents is the immense resource base of hydrocarbons and fisheries. Countries have embarked on national programmes on marine economic development. Vietnam, for instance, announced a national policy titled “Maritime Strategy to 2020,” which aimed to increase its share of the maritime and coastal economy from 48% of its GDP in 2005 to 53% in 2020 (Authority of Foreign Information Service, 2012). It invited international energy companies to bid for new oil fields in disputed areas off its coast. The Chinese government accused Vietnam of violating its sovereignty and maritime rights, while Vietnam blamed Chinese fishing ships that operated nearby of damaging the cables of its energy survey ships (BBC, 2011). Consequently, there is an increasing number of energy exploration and fishing activities as well as interrup-tion and expulsion of survey and fishing ships in disputed waters.

Similarly, there has been friction between China and the Philippines over energy and fishing issues in 2011 and 2012. Incidents in the Reed Bank and the Scarborough Shoal have captured international atten-tion. The former was initiated by the Chinese that attempted to stop Philippine oil exploration activities in Reed Bank waters. The second involved a two-month standoff between Chinese law enforcement ships and Philippines’ ships in Scarborough shoal waters, after the Chinese

166 Yang Fang

found their fishing ships being intercepted and besieged by Philippines’ largest warship.

China has also taken a series of moves to protect its resource interest. For example, in May 2011, China’s state-run oil enterprise China National Offshore Oil Corporation (CNOOC) launched a new deep-water rig, Haiyang Shiyou 981. The rig can drill oil and gas up to 3000 metres deep (China.org.cn, 2011). In June 2012, the CNOOC announced that nine offshore areas in the South China Sea would be available for exploration in cooperation with foreign companies (CNOOC, 23 June 2012). These areas are located within the nine-dash line and some blocks overlap with those offered by the Vietnamese companies (CNOOC, 5 July 2012). Through these actions, China tries to portray the message that it has the intention, technological capability, as well as resources to explore energy in the South China Sea.

While the pursuit of resources is one aspect of the South China Sea disputes, another layer of complexity stems from the nationalistic senti-ment when the question of sovereignty is attached to the disputed islands. China, Vietnam and the Philippines, are all sensitive to sover-eignty issues, given their shared history colonisation to the Second World War. Sino-Vietnamese relations have always been asymmetrical (Womack, 2006). The two countries had confronted each other at the land border area, towards the end of the 1970s, and faced two brief skir-mishes over the Paracel islands and the Johnson Reef in 1974 and 1988 respectively. As a result, people in both countries have strong nation-alistic sentiments and cannot tolerate any loss of sovereignty to each other.

It has been argued that the Philippine government faces relatively less intense nationalist sentiment on the South China Sea issue as it has only been evoked when high-profile incidents occurred (International Crisis Group, 2012, p. 21). That said, it should also be recalled that the public pressure among Philippines had successfully forced the government to withdraw its contract with China and Vietnam in a Joint Marine Seismic Undertaking (JMSU) in disputed areas. Although it had been signed in 2005, the agreement was met with strong public opposition in 2008, when the Arroyo government was faced with a series of corruption scan-dals. It was alleged that the Arroyo government violated the constitu-tion in order to obtain a quid pro quo for Chinese investment and loan projects (Baviera, 2012). More recently, when China and the Philippines engaged in the Scarborough Shoal standoff, neither party was willing to back down, partly due to their fear of being perceived as weak by the public (O’Reilly, 2012).


The significant increase of defence budgets and expansion of naval programmes, as well as the development of civilian forces, have also been sources of concern. Southeast Asia has become one of the fastest growing regions, in terms of defence expenditure, in the world. According to data by the Stockholm International Peace Research Institute (SIPRI), Southeast Asian defence spending grew by 42% from 2002 to 2011 (O’Callaghan, 2012). While there is a link between economic growth and increased procurement, as well as justification by the need to upgrade their obsolete weapons, it is believed that territorial disputes in the South China Sea have prompted Vietnam, Malaysia, the Philippines, and Brunei to try to offset China’s growing naval power (O’Callaghan, 2012). In 2012, two of the largest real increases in defence spending were seen in Vietnam (16.9% in 2012) and the Philippines (37.1% in 2011 and 5.1% in 2012) (International Institute for Strategic Studies, 2013, p. 250). Furthermore, they have acquired expensive items such as the Kilo Class submarines – purchased by Vietnam – which could fundamentally alter the regional security equation (International Crisis Group, 2012, pp. 18–19).

China, on the other hand, is amongst those countries that have strengthened their law enforcement capabilities. It has launched the China Maritime Surveillance (CMS) force – a construction programme aimed at producing 16 aircrafts and 350 patrol vessels by the end of the 12th Five Year Plan (Wang, 2011). By 2020, its manpower will increase from 9000 to 15,000 personnel. Other than CMS, the Chinese mari-time law enforcement agencies, including the Maritime Police of the Border Control Department, the Maritime Safety Administration, the Fisheries Law Enforcement Command, and the General Administration of Customs are all projected to expand to fulfil their roles better. In March 2013, China unveiled a plan to consolidate four of the five agencies – except for the Maritime Safety Administration – under the leadership of Sate Oceanic Administration (Xinhua, 2013). Such bureaucratic restructuring could strengthen China’s capability to protect its maritime rights and interests. Vietnam has also constructed more Offshore Patrol Vessels and maritime-patrol aircraft to boost its maritime enforcement capabilities (International Institute for Strategic Studies, 2013, p. 277).

While law enforcement agencies are non-military in nature, coast guard ships usually act with limited restraint and follow a few restric-tive rules of engagement, when compared to naval vessels. This may lower the barriers for confrontation. Consequently, confrontations and skirmishes tend to occur between coast guard vessels from one country,

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and fishing vessels, energy survey vessels, or exploration vessels from another country in disputed areas (Mière, 2011).

All the factors analysed above have together contributed to height-ened tension in the South China Sea. The thorny question of sovereignty over the South China Sea has resulted in a deadlock. The complexity of the disputes makes finding a solution almost difficult, if not impos-sible. Thus far, the approaches to resolve the disputes have hardly been successful. The next section will discuss this in greater length.

Whither a Solution for the South China Sea Disputes?

In order to deal with increasing tensions in the South China Sea, Southeast Asian claimant countries have been pursuing different strate-gies for resolving disputes. Up until now, they have only been moder-ately successful. For one, they have relied on ASEAN to take a united Southeast Asian position over sovereignty disputes and insist on engaging with China at a multilateral level. Next, they prefer to draw in external powers to provide a strategic balance to counter Chinese assertiveness. Third, they have also pursued the legal route by seeking a resolution through the International Court of Justice (ICJ) or the International Tribunal of the Law of the Sea (ITLOS). As discussed in other chapters of this volume, Philippines initiated arbitral proceedings against China under Annex VII of UNCLOS in January this year. This section discusses each of these approaches at length and why they have fallen short of providing viable solutions to the disputes.

Multilateralism and the Limitations of the “ASEAN Way”

Southeast Asian claimant countries led by Vietnam and the Philippines have turned to ASEAN in order to rally regional solidarity behind them. To their disappointment however, members are divided in articulating a joint position vis-à-vis China over disputes in the South China Sea.

Due to varied national interests and external relations with China and the United States, ASEAN members have been unable to reach a unanimous consensus on the South China Sea disputes. Among the four claimant states, Vietnam and the Philippines have been more active over the recent years, while Malaysia and Brunei tend to be relatively quiet. The former two have greater stakes in the South China Sea and this is perhaps why they have taken a forceful position in asserting their claims. Both countries are located in close proximity to China and have claimed the largest portion of maritime territory in the South China Sea. Their strong position against China is not matched by other ASEAN


states and this was reflected in their failure to secure a joint commu-niqué in 45th Annual Ministerial Meeting (AMM) in Cambodia. The latter has been blamed for prioritising its bilateral ties with China over ASEAN’s regional interests. Consequently, it generated doubts about ASEAN’s future capability to steer regional integration and manage complex security-related conflicts.

Apart from Cambodia, the other ASEAN states, Thailand, Myanmar, Laos, Singapore, and Indonesia are also non-claimants of territorial features in the South China Sea. Cambodia, Thailand, Myanmar, and Laos are known to have close relations with China and do not want to damage their bilateral ties by overtly supporting claimant parties’ initia-tives in the South China Sea. Singapore and Indonesia do, for instance, support a peaceful resolution of the disputes, as regional instability would impact freedom of navigation. Both countries are littoral states bordering the Straits of Malacca, which connect the South China Sea and the Indian Ocean, and are heavily reliant on maritime trade and seaborne transportation. That said, however, they too are not willing to support any particular party’s claim (Storey, 2011, p. 3). Both Singapore and Indonesia do not get involved in any conflicts regarding the matter and maintain close relations with China. Hence, Singapore distanced itself when Philippines initiated arbitration proceedings against China under Article 287 and Annex VII of UNCLOS. The Singapore Ministry of Foreign Affairs clearly stated that this was a “national decision” and that “Singapore first knew about this action from media reports” (MFAS, 2013). As the largest of the ten ASEAN member states, Indonesia has maintained a natural position and has been very committed to taking a leading role in maintaining a regional order in Southeast Asia (Wanandi, 2012).

While ASEAN does not speak in one voice over the nature and reso-lution of the disputes, China is not a great believer in multilateral solu-tions. It has always insisted on bilateral negotiations directly involving the parties concerned in the disputes. Having resolved most border disputes with its neighbours bilaterally, it believes that involving more parties complicates the situation. The agreement with Vietnam on the delimitation of the territorial seas, the Exclusive Economic Zones, and the Continental Shelves in the Gulf of Tokin were also concluded on a bilateral basis on 25 December 2000 (United Nations, 2005).2 According to the agreement, the proportion of the area that is allo-cated to Vietnam is 53.23% and China is 46.77%. Vietnam obtained approximately 8,000 square kilometres more waters than China (Zou, 2005, p. 15).

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Guided by its implementation of “good neighbourhood policy,” China is generally open for multilateral cooperation on some non-tra-ditional security issues with ASEAN. However, being more instrumental than fundamental, it does not mean that China is ready or willing to adopt multilateralism as a dominant part of its foreign policy (Gupta, 2005, p. 259). Most importantly, the Chinese government sees recovery of territory as critical to securing the legitimacy of its regime back home. It is apprehensive that claimant countries like Vietnam and the Philippines might unite all the ASEAN member states to press for conces-sions. Moreover, the multilateral process would invite bigger powers like the United States, India, Japan, and so on to mediate and leverage it.

However, this does not mean ASEAN is inactive in the South China Sea disputes. Under the chairmanship of Brunei in 2013, ASEAN has been carrying forward the policy of neutrality and “trying to make it clear that territorial disputes can only be solved by the claimant states themselves” (CNA, 2013), they have been playing a role to facilitate dialogues among claimant states, to work together for a DOC, to observe the implementation of a COC, and restrict unilateral actions that could jeopardise the security environment of the region.

Strategic Involvement of Great Powers

The United States has always been the corner stone of peace and stability in Southeast Asia. As the Chinese presence in the region expands and develops, several Southeast Asian countries – especially the claimant parties – have sought to welcome a stronger US presence in the region. The increased involvement of external powers may have been perceived by claimants as strong support for their individual sovereignty claims. Among all the four claimant states in Southeast Asia, Vietnam and the Philippines have been the most active in challenging China’s claims.

The involvement of external powers however, works contrary to the Chinese approach of resolving disputes bilaterally. China is strongly against the intervention into bilateral sovereignty disputes by external powers, especially the United States. It perceives the “pivot” or “rebal-ance” to Asia and its active involvement in the South China Sea as having emboldened other claimants to challenge China (Xinhua, 2012b).

Vietnam sought to draw in a US presence during its chairmanship of ASEAN in July 2010. On the 15th anniversary of the normalisation of US-Vietnamese relations, the then US secretary of state Hillary Clinton stated that the resolution of the disputes must be made in accord-ance with UNCLOS. In particular, she urged that “legitimate claims to maritime space in the South China Sea should be derived solely from


legitimate claims to land features.” This was interpreted as a direct chal-lenge to China’s historical claim and the legality of its nine-dash line. Mrs. Clinton also announced that the South China Sea is of “national interest” to the United States, a statement considered being in direct contrast to the Chinese expression of its “core interest” (US Department of State, 2010).

US-Vietnamese defence ties have been on a steady increase in the past few years. The former rivals have not only conducted a few joint naval drills, but also signed an agreement on 1 August 2010 to set up cooperation in various areas, which marked “the first formal military cooperation since the normalisation of diplomatic relations in 1995” (AFP, 2010). Additionally, Vietnam received a United States naval visit to Cam Ranh base, and Vietnamese naval officers also visited a United States aircraft carrier. They have also strengthened their military links through the conclusion of their formal memorandum of understanding (MOU) on defence cooperation in September 2011 (Thanh Nien Daily, 2011).

Vietnam forms an interesting claimant party to observe in relation to asserting its claims in the South China Sea. While US-Vietnamese relations are strengthening, it still maintains pragmatic ties with China and continues to cooperate with it at economic levels. The party-to-party communication between Vietnam and China plays an important role in providing assurance when tensions surface. For example, after a summer-long duration of accusations over rival territorial claims, the Vietnamese Party secretary and his Chinese counterpart held meetings in Beijing in October 2011, that helped pave the way for a bilateral agreement on six principles for managing the disputes (International Crisis Group., 2012, p. 21). Vietnam realises the importance of being cautious with its relations with the United States to prevent the latter from interfering in its domestic affairs over issues such as human rights and democracy. It has diversified its cooperation with many powers, including Russia, India, Japan, and France, by procuring new military hardware and strengthening defence ties with them. The main objective of the Vietnamese military is to obtain their own self-defence capability rather than rely on any single country.

While Vietnam is a proactive claimant like the Philippines, the latter possesses perhaps the weakest defence capability in Southeast Asia and cannot confront China’s growing military might. The United States is a traditional ally to the Philippines and the sole super naval power in the world whose return to Asia and forward military presence in the region has naturally been seen as an effective counterbalance to China’s

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claims. In recent years, Philippines has received military funding and equipment from Washington, and implemented military modernisa-tion programmes with the assistance of the United States. When Joint military exercises with the United States were conducted during the Scarborough Shoal standoff; it tried to seek the assurance from the United States that their 1951 Mutual Defense Treaty should apply to its claims in the South China Sea. The United States, however, has main-tained a degree of ambiguity over whether its military obligation would extend to the defending of the South China Sea in a situation when the Philippines is being attacked by its rivalries.

Apart from the United States, both the Philippines and Vietnam have been conducting extensive diplomatic initiatives with other countries such as Japan and India to garner support over their claims in the South China Sea (Asia Times, 2013). They have also welcomed international oil companies to cooperate in the disputed areas and thus, have indirectly drawn more countries into the dispute. For example, Vietnam Oil and Gas Group (PetroVietnam) has concluded a deal with India’s Oil and Natural Gas Corp (ONGC) for developing oil and gas around the Paracel Islands, resulting in a sharp protest from the Chinese side.

Among the non-claimant countries, Singapore has generally welcomed the presence of the United States in the region while maintaining friendly relations with China. As a nation heavily dependent on maritime trade for its prosperity and future development, it has an allied interest with the United States in maintaining freedom of navigation and stability in the South China Sea.

Demonstrating strong relations with external powers in an attempt to counter-balance China is not a strategy embraced by all Southeast Asian countries. In 2012, when Cambodia took up ASEAN chairman-ship, it decided to minimise the internationalisation of the disputes. It was criticised for its close relations with China, a relationship that dominated the agenda of ARF in 2012. Thailand, Myanmar, and Laos have not made any overt attempts to challenge China. As argued by Sam Bateman, “While the US pivot towards Asia has been welcomed in the region, it is equally true that most Southeast Asian countries are apprehensive about growing tensions between China and the US. They don’t like the way great power politics have intruded into the region” (Bateman, 2012).

As Southeast Asia’s largest economy and emerging leader, Indonesia has pursued a strategy to strengthen relations with both China and the United States simultaneously. It welcomes the constructive security presence of the United States, but ensures that Sino-Indonesian relations


will not be jeopardised. For instance, Indonesia has been watchful of the United States deployment of troops in Darwin, despite the fact that the latter lifted the decade-long ban on military assistance to Indonesia’s elite Special Forces – the Kopassus Special Forces. It has raised concerns that the move may trigger tensions between the United States and China and jeopardise Indonesia’s security interest, given its geographical prox-imity with both the military base in Australia and the disputed waters of the South China Sea (The Jakarta Post, 2011).

Similarly, even the four claimant states have attempted to maintain strong relations with both China and the United States. Malaysia and Brunei adopt a comparatively less proactive approach towards China and there is little sign that they rely on the external powers to back their claims. China’s non-confrontational position on the joint development of resources agreement between Malaysia and Brunei in a disputed area has also been an assurance to them.

While drawing external powers in is a strategy that certain claimants are using to hedge against China, it is debatable how sustainable this is, given that even external parties may not see this as being in their broader national interests to do so. Seriously challenging China’s claim might risk jeopardising their own economic relations and the need to cooperate with China over other international issues. It is important to note that the United States “pivot” is intended as its economic revival, of which its relations with China become a crucial part. It does not intend to see the game of strategic balance overplayed by some countries in the region, which might force it to directly challenge or confront China, or even worse, evoke military conflicts. While the likelihood of the latter is highly unlikely, most countries are more than willing to maintain a balanced relationship with both China and the United States and selec-tively rely on the United States in time of need. As noted by Bonnie Glaser, President Barack Obama’s “pivot to Asia” is facing a paradox. “When Washington acts to prevent China from running roughshod over the region, its partners’ concerns about US-China tensions spike and they implore the United States to step back.” Such a paradox makes maintaining a consistent and principled US policy on the South China Sea essential, yet challenging (Glaser, 2012).

Reliance on International Law

Arguably, small states are more reliant on international law and its enforcement, particularly because of their inability to defend themselves through military or economic means (Duursma, 1996). Conversely, big powers like China have many means to secure their interests.

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Their stronger economic and political clout leverages over smaller and weaker parties. Besides, international law could serve as “a tool of diplomatic persuasion for small states” (Petric, 2012). Tommy Koh, a veteran diplomat and legally trained expert, explains the reason why Singapore firmly upholds international law. “Small States benefit from an orderly world in which the behaviour of bigger and stronger States are constrained by laws, principles and rules” (Koh, 2007). With regard to the South China Sea disputes, none of the claimants can match China either economically or militarily. Hence, understandably, weaker parties are keen to submit the disputes to the ICJ or the ITLOS.

Under international customary law, the sovereignty disputes cannot be taken to any form of third-party dispute settlement without the consent of all parties (Beckman & Bernard, 2011). China firmly opposes any involvement of a third party in the South China Sea disputes, including referring the case to the ICJ. Hence, it is impossible to submit the disputes to the ICJ without China’s consent. Besides, China has also exercised its right to opt out of the obligation of applying the dispute resolution mechanism set in UNCLOS by making a statutory declaration under Article 298 of UNCLOS on 25 August 2006 to the UN secretary-general, UN Division for Ocean Affairs and the Law of the Sea, 2006.3 By doing so, China excluded itself from compulsory adjudication or arbi-tration by the ICJ or ITLOS on issues relating to maritime boundary delimitations, historic bays, and titles as well as disputes concerning military activities. In addition, the UNCLOS does not contain provision to decide the sovereignty claims over maritime features. It has only set criteria to decide maritime zones that extend from pre-determined land territory.

Nevertheless, as argued by Robert Beckman, China could be involved in the system of compulsory biding dispute settlement in Section 2 Part XV of UNCLOS when the disputes are relating to the interpretation or application of provisions of UNLCOS. This means, China’s exclusion of the compulsory binding dispute settlement system in UNCLOS is only limited to certain circumstances, such as the disputes relating to historic title and maritime boundary delimitation (Beckman & Bernard, 2011, pp. 18–19). As such, although China rejected Philippines’ suggestion to seek arbitration from the ITLOS in July 2011, the Philippines has not given up its effort to file the case with the ITLOS. On 22 January 2013, the Department of Foreign Affairs handed the Chinese ambassador a Note Verbale in which it stated that the Philippines had initiated arbi-tral proceedings against China and wanted international arbitration to declare both Beijing’s nine-dash line and moves in the potentially


oil-rich waters as “illegal” (Republic of the Philippines, Department of Foreign Affairs, 2013a).4 The Philippines also acknowledged that it is conscious of China’s Declaration of 25 August 2006 under Article 298 of UNCLOS and had tactically avoided “raising subjects or making claims that China has, by virtue of that Declaration, excluded from arbitral jurisdiction” (Republic of the Philippines, Department of Foreign Affairs, 2013b).5 Rather, it requested the determination of the legality of the nine-dash line and Chinese activities in the disputed area, which may fall into the arbitral jurisdiction of UNCLOS. However, China has decided not to participate in the panel. It is also possible that China could simply choose to ignore the court’s ruling, even if the ITLOS decides to hear the case and issue a binding result in favour of the Philippines (Gallo, 2013). Without the Chinese participation or enforcement, one can hardly expect a “peaceful and durable solution” to the disputes, though it might help the Philippines to seize the “moral high ground” (Storey, 2013).

More fundamentally, as Beckman admitted, “the referral of disputes on legal issues cannot solve the underlying sovereignty disputes” though decisions of arbitral or an advisory opinion by ITLOS could contribute to a peaceful resolution of the underlying issues by clarifying whether certain claims or unilateral actions of the claimants are consistent with UNCLOS and international law (Beckman, & Bernard, 2011, pp. 18–19). In this regard, ITLOS might be able to provide advisory opinion to decide the legality of China’s nine-dash line and its activities in the South China Sea, but ultimately, it has no jurisdiction to decide the sover-eignty or boundary limits to solve the disputes. Besides, the Philippines’ decision could create “negative repercussions” for ASEAN-China rela-tions (Storey, 2012). It is warned that the legal process could turn into a “political mess” in the region unless it is carefully managed (Tay, 2013).

An Issue of Management

Through the analysis above, it is evident that current ways and means to resolve the disputes have shown limited results. Prospects of an overall resolution in the near future seem equally limited at this rate. For now, it is critical to pursue ways for better management of the disputes so that they do not escalate into a full-fledged conflict at the time of rising tensions. Hence, it is recommended that claimants exercise strong self-restraint and jointly work on a COC. In the meantime, they should also closely observe terms and conditions in the DOC and better implement the guidelines they reached in November 2011. Further, they should

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develop joint cooperation mechanisms to rebuild confidence, trust each other, and share common interests.

Stronger Implementation of the Declaration of the Code of Conduct and Adoption of a Code of Conduct

The DOC includes a set of agreements signed by China and ASEAN members in 2002. Essentially, it is aimed at encouraging claimant parties to exercise self-restraint and build mutual trust and confidence amongst themselves. It also pledged that parties would “work, on the basis of consensus, towards the eventual attainment” to adopt a Code of Conduct to further promote peace and stability in the South China Sea (ASEAN, 2002).6 Hence, claimant states are committed to work further to upgrade the existing DOC into a COC. Unlike the DOC, which lacks legal efficacy or rigid enforcement, it is envisaged that the COC will be empowered with legal force and work more effectively to avoid further escalation of tension and lay the foundation for multilateral coopera-tion. The DOC does not deal with sovereignty resolution, nor does it impose sanctions on any form of infringement by signatory parties. Since the inception of DOC in 2002, claimant countries have gener-ally refrained from taking military actions and stopped new occupation. Prior to its adoption, China and Vietnam had two brief naval encounters over Paracel islands and Johnson Reef, in 1974 and 1988 respectively. In 1995, China was found militarising the Mischief Reef, inciting sharp criticism from the Philippines.

However, progress over adoption of the COC is limited. The diffi-culty is initially attributed to the differences amongst the concerned parties over the content of the COC. Within ASEAN, member states have expressed differences regarding whether the draft of the COC should refer to dispute resolution mechanisms. In January 2012, the Philippines proposed to transform the South China Sea into a Zone of Peace, Freedom, Friendship, and Cooperation (ZoPFFC) and circulated a draft of the COC among ASEAN countries. The proposal envisages a possibility to conduct joint cooperation efforts. However, it requires all claimant parties to clarify their claims, distinguish between the disputed areas and non-disputed areas, fully resolve the territorial and jurisdictional disputes, establish dispute settlement mechanisms, and so on. After reviewing the Philippines’ draft, the ASEAN Senior Officials Meeting (SOM) Working Group decided to rework the draft and eventu-ally the Philippines’ draft was significantly pruned. In particular, the working group decided to drop reference to the obligation of resolving disputes, areas of joint cooperation, and dispute settlement mechanisms.


This could be explained by the Malaysian foreign minister’s statement in the ASEAN Ministerial Meeting (AMM), “COC aims to create rules based framework; it should not serve as an instrument to resolve territo-rial disputes. Existing disputes should be resolved between the parties concerned based on existing mechanisms, including the UNCLOS” (Thayer, 2012). As a result, it is clear that COC should be aimed at preventing the existing disputes from escalating into armed conflict and promote peace and stability in the region, rather than serve as an instru-ment to resolve territorial disputes.

The second difference is over when would be the “appropriate time” to discuss the formulation of the COC. China expressed that it would discuss the COC with ASEAN when “conditions are ripe” (MFA PRC, 2012). China also insisted that it should be involved in the negotia-tion of the COC at an early stage. Initially ASEAN members wanted to drive a consensus over the draft of the COC among all members before meeting with China. With the objection from China, the Philippines and Vietnam made a compromise and agreed to communicate with China through the ASEAN Chair while they proceed on their own to draft a COC (Thayer, 2012).

The third concern is China’s preference for full implementation of DOC over an early adoption of the COC. The Minister of Foreign Affairs Wang Yi suggested that “DOC shall by no means be bypassed in the formulation of [the] COC.” He emphasised that the conclusion of the COC cannot be expected in a rush and must be “consensus-based,” with the interests of all parties being considered (Xinhua, 2013). In addition, Chinese leader Li Keqiang criticised Philippines’ decision to file the case for international arbitration without prior consultation with China as a violation of the spirit and principles of the DOC (People’s Daily, 2013). The DOC states that disputes in the South China Sea should be resolved peacefully and in a friendly manner through “consultations and nego-tiations by sovereign states directly concerned” (ASEAN, 2002).7

In practice, despite all the differences that exist, China and ASEAN have moved steadily on with the negotiation and drafting of a COC. The senior officials of the ASEAN managed to identify the core elements required for making the COC by May 2012, before they submitted them to the ASEAN foreign ministers for their final decision in July’s meeting (Xinhua, 2012a). Indonesia has taken the initiative to promul-gate a COC. As reported, the COC is comprised of confidence building, conflict prevention, and management measures. In September 2012, Indonesia circulated a version to the ASEAN foreign ministers (Ririhena, 2012). A consensus has also been reached between China and ASEAN

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that the implementation of the DOC and discussion of the COC should progress in tandem. For example, in September 2013 during the 9th ASEAN-China Joint Working Group meeting on the Implementation of the DOC and the 6th ASEAN-China Senior Officials’ Meeting (SOM) on the implementation of the DOC in Suzhou, China, for the first time, agreed to take concrete steps to discuss the details of a code of conduct and set up a group of eminent persons and experts (Bangkok Post, 2013). In addition, both China and ASEAN agreed to formulate a “roadmap” for COC and move forward “step by step” (Xinhua, 2013). While an early conclusion of a COC may not be feasible, the initiation to push forward agendas is a significant development. Equally important is that the conduct of cooperative projects for better implementation of the DOC would also promote confidence building and further facilitate the negotiation of a COC (Thayer, 2013).

Joint Cooperation: Necessity and Challenges

Given the difficulties for disputing states to reach a compromise over territorial claims, political negotiation could be a protracted process. In the absence of a resolution, competition for energy resources would continue to play a destructive role and perpetuate tensions in the South China Sea. Besides, with growing domestic demand and dwindling supplies in international market, littoral states have turned their atten-tion to the hydrocarbon reserves in the South China Sea. In this regard, there are both political and economic imperatives to consider the joint exploration of energy resources.

Countries could also initiate discussions and cooperate over common non-traditional security threats such as navigation hazards, natural disasters, piracy and smuggling, marine pollution, and others. This is in line with the spirit of DOC, in which it states that, “pending a compre-hensive and durable settlement of the disputes, the Parties concerned may explore or undertake cooperative activities” (ASEAN, 2002).8

The UNCLOS also sets provisions to encourage parties to boundary disputes to agree on provisional arrangement in the transitional period pending the final delimitation of the maritime zone. In Paragraph 3 of both Articles 74 and 83, it stated that:

The State concerned, in a spirit of understanding and cooperation, shall make every effort to enter into provisional arrangements of a practical nature, and during the transitional period, not to jeopardize or hamper the reaching of the final agreement. Such arrangements shall be without prejudice to the final delimitation. (United Nations, 1982)9


According to Article 123, Part IX of UNCLOS, countries bordering an enclosed or semi-enclosed sea should cooperate with each other over management, conservation, exploration, and exploitation of living resources of the sea, the protection and preservation of the marine envi-ronment, and so on (United Nations, 1982).10 Since the South China Sea is categorised as a semi-enclosed sea, coastal countries have obligation to cooperate with each other.

There are both successful and unsuccessful precedents of joint coop-eration in the South China Sea. The most recent successful case is the ratification of the Production Sharing Agreements between Malaysia and Brunei in a disputed area (Brunei Times, 2010). Another case is the JMSU in a disputed area in the Spratly Island. This was the first trilateral agree-ment involving China, Vietnam, and the Philippines. Had this been successful, it would have been a benchmark in the annals of such joint cooperation. Unfortunately, the agreement failed and was concluded in March 2005 and eventually suspended in 2008.

In the case of the JMSU, it was ended with the withdrawal of the Philippines from the project. One of the reasons presented by the Philippines is that the project is largely located in its claimed area and could weaken its claim to the area by involving China and Vietnam (Buszynski, 2010, p. 101–102). Hence, disagreement over the actual location of a joint development could be one of the obstacles preventing parties from engaging in the joint development project. As explained by Rommel C. Banlaoi, “claimants may have varying understanding and contending definitions of the concept of joint development,” which include the understanding about whether an area is disputed and whether a geographic area is allowed for joint development (Banlaoi, 2012). However, the practical difficulty associated with the identifica-tion of disputed areas and non-disputed areas will involve determina-tion of legal status of all land features and their respective maritime zones entitled by UNCLOS. It will also request Chinese clarification of the legal status of its nine-dash line. Given the large number of features in the South China Sea and competing interpretations of UNCLOS driven by different national interests, as well as the reluctance of the Chinese to drop reference to the nine-dash line and its historic right, clear identification of disputed areas and non-disputed areas will not be achievable.

Another reason that led to the failure of the JMSU is attached to a series of corruption scandals leading to massive public pressure on the Arroyo administration in the Philippines. As such, it is important for the governments involved to conduct transparent and inclusive dialogues

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at the domestic level before proceeding to an external negotiation process.

Yet, the JMSU could provide a valuable experience for the future joint cooperation among multiple parties. In the words of Prof. Hasjim Djalal,

In some disputed areas, the application of Joint Development concept might be useful as long as the zone of the dispute, the subjects to be jointly developed, the mechanism for such a joint development, and the participants in such a joint development concept, can be identi-fied, and the parties concerned are willing to negotiate seriously on the modalities for the Joint Development concept in a particular area. (Djalal, 2011)

It is also suggested that the future cooperation would be good to receive collective ASEAN endorsement and “would have to avoid the pitfalls of the Philippine-sponsored JMSU and should embrace all claim zones and should not be located in any one” (Buszynski, 2010, pp. 101–102). With the availability of funding and enhanced technological capability, as well as stronger political will to implement the DOC, it would be practical for countries to review the possibilities to conduct joint cooperation both on energy projects and non-traditional security issues. Interestingly, the idea of “setting aside disputes and pursuing joint development” was first proposed by Chinese leader Deng Xiaoping in late 1970s. However, other claimants were wary of it, given that it perhaps implied that it is tantamount to recognising China’s “indisputable sovereignty” in the region (Storey, 2012).

Conclusions

A permanent and durable solution for the South China Sea disputes cannot be expected in the foreseeable future. This chapter has assessed the complexity of the disputes, especially as they relate to sovereignty and competing claims. Thus far, the approaches to resolving disputes have been moderately successful. It is important to acknowledge the context within which tensions in the South China Sea have been esca-lating. For one, the strategic rivalry between China and the United States might polarise ASEAN and its ability to manage the issue with China. Next, Southeast Asian claimant countries differ amongst them-selves over the extent to which the American presence is required in the region. Furthermore, the Southeast Asian countries are also driven by


different national interests and some have also been locked in different maritime boundary disputes with each other (Bateman, Ho, & Chan, 2009).11

Legal solutions also have certain limitations. China firmly rejects any third party involvement. Besides, UNCLOS does not contain provi-sions for the resolution of sovereignty disputes and cannot determine maritime zones when the sovereignty is not agreed upon. Though international adjudication or arbitration relating to the interpretation or application of provisions of UNLCOS, can help to press parties to clarify their claims, they do not ultimately deal with the sovereignty disputes.

While the stalemate continues and claimants have not moved beyond the gridlock, a conflict management mechanism should be reached with emphasises on incident prevention and confidence building meas-ures. Meanwhile, joint cooperation could be a provisional measure to shelve disputes, meet energy demands, and tackle common threats in the region. Nevertheless, both initiatives should sufficiently consoli-date interests of all parties directly concerned and insist on the ASEAN’s central role and collective effort in facilitating the process.

Notes

1. The Joint Submission dated 6 May by Malaysia and Vietnam, as well as the Communications submitted to the UN Secretary-General by China with regard to the Joint Submission of Malaysia and Vietnam, are available on UN website www.un.org/Depts/los/clcs_new/submissions_files/submission_mysvnm_33_2009.htm.

2. Full text of the treaty is available at United Nation Treaty Collection, Vol. 2336, Treaty No. 41860, http://treaties.un.org/doc/Publication/UNTS/Volume%202336/v2336.pdf.

3. Declaration under Article 298 by the Government of the People’s Republic of China (25 August 2006), UN Division for Ocean Affairs and the Law of the Sea, available at http://www.un.org/Depts/los/convention_agreements/convention_declarations.htm#China after ratification.

4. Full text of the Note Verbale is available at http://xa.yimg.com/kq/groups/11561283/574494819/name/Notification%20and%20Statement%20of%20Claim%20on%20West%20Philippine%20Sea.

5. “Statement by Secretary of Foreign Affairs Albert del Rosario on the UNCLOS Arbitral Proceedings against China to Achieve a Peaceful and Durable Solution to the Dispute in the WPS,” Republic of the Philippines, Department of Foreign Affairs, available at http://www.dfa.gov.ph/index.php/newsroom/dfa-releases/7300-statement-by-secretary-of-foreign-affairs-albert-del-rosario-on-the-unclos-arbitral-proceedings-against-china-to-achieve-a-peaceful-and-durable-solution-to-the-dispute-in-the-wps.

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6. Full text of “Declaration on the Conduct of Parties in the South China Sea” is available at http://www.asean.org/asean/external-relations/china/item/declaration-on-the-conduct-of-parties-in-the-south-china-sea.



9. UNCLOS, Article 74 in Part V, and Article 83 in Part VI.10. UNCLOS, Article 123 in Part IX.11. It is noted that of the approximately 60 maritime boundaries required in

the Southeast Asia, less than 20% have so far been fully resolved. See Sam Bateman, Joshua Ho, and Jane Chan, “Good Order at Sea in Southeast Asia,” RSIS Policy Paper, April 2009.

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189

The year 2013 ended with increased strain in China’s relations with its neighbours, largely owed to territorial spats over the South China and East Sea areas. In particular, China’s pronouncement of a new Air Defence Identification Zone (ADIZ) above the East Sea area in December 2013 raised the ire of its neighbours Korea, Japan, and Taiwan.

The early weeks of 2014 indicate that this pattern will remain. China’s Hainan province, which administers an area that includes approximately half of the entire South China Sea, enacted a 2004 law on 1 January 2014 that requires countries to secure fishing rights with China’s central level authorities if they wish to fish in the South China Sea area, including around the disputed Paracel Islands. The law requires approval from the State Council for “foreigners or foreign fishing ships entering sea areas administered by Hainan and engaged in fishery production or fishery resource surveys” (Fravel, 2014), thereby further testing the patience of the South China Sea’s other littoral states, particularly Vietnam and the Philippines.

At initial glance, it might seem that China is the sole provocateur with regard to the South China Sea area’s territorial disputes. A Republic of China map from 1947 that demarcates present-day China’s claims to most of the South China Sea area (now referred to commonly as the “9-dash line” or “cow’s tongue” map), coupled with China’s increased enforcement of the territory in recent years, is not supported by inter-national law (Li, 2012). Instead, China’s claims rely on a contested historical record that is not shared with other states with legitimate legal claims to the same islands and the surrounding waters.

The US, although not stoking regional tensions directly, must also shoulder some responsibility for getting the dialogue back on track. Since America’s pronouncement of a “pivot” to the region in 2011, Asia has

ConclusionHarmony from Disunity: Core Issues and Opportunities in the South China SeaAndrew Billo

190 Andrew Billo

been struggling to interpret the strength of its commitment (Clinton, 2011). Nevertheless, with the promise of US support, the Philippines and Vietnam have further pushed the boundaries of their relation-ships with China, both through strongly worded rhetoric condemning Chinese actions, as well as through action utilising international legal mechanisms. Rather than simply providing assurances of support to its regional partners, the US can and should make efforts to ensure its approach publically recognises China’s growing international stature and the opportunity for the PRC to take a leadership role in its own backyard.

Due to America’s approach at present, including its support for smaller littoral states, China feels it is being contained (Global Times, 2014). For example, although the Philippines’ arbitration case against China under the United Nations Convention on the Law of the Sea (UNCLOS) in theory could resolve the dispute on a level playing field, in practice China viewed the case as contrary to the spirit of neighbourly coopera-tion. As a rising power, China’s refusal to seek a solution according to established international law may have negative implications. It only demonstrates that China does not respect the norms and laws of the international community, a concern reiterated by legal scholar, Professor Robert Beckman in Chapter 3 of this volume.

The same is true of the long-discussed Association of Southeast Asian Nations (ASEAN) Code of Conduct (COC), which the US has described as a key mechanism for resolving the disputes. The COC process has been frequently stalled because of China’s stubbornness in negotiating a reso-lution to the territorial disputes on a multilateral basis. As The Economist wrote in 2012, China “insists the territorial disputes are a series of bilat-eral issues. It does not want its smaller neighbours ganging up on it, still less if they are backed up by America” (The Economist, 2012). While China’s preference for bilateral negotiation persists, meetings between China and ASEAN in early 2014 indicate that, as a whole, concerned parties are willing to ensure the COC discussion remains on track so as to better manage the disputes (Tansubhapol, 2014).

While there is always the possibility of renewed and enhanced cooper-ation, persistent challenges remain that require specific attention. These are, as follows: the power struggle between the United States and China, in spite of its consistent escalation; persistent nationalist forces within the region, fuelled by governments facing increasing domestic political and economic challenges; and a divided ASEAN that does not have a unified approach to resolving the matter.

Harmony from Disunity 191

Still, the dispute can be better managed. First, considering that trade between China, the US, and ASEAN form a vital pillar within the global economy, a total erosion of the economic relations between these coun-tries would spell disaster for global economic and political stability. The trade figures speak for themselves: China is ASEAN’s largest trading partner while ASEAN is China’s third largest trading partner (Xinhua, 2013). ASEAN is the fifth largest trading partner of the United States (Office of the United States Trade Representative, n.d.), while the United States is ASEAN’s fourth largest trading partner (ASEAN, 2013). The states involved in the dispute would suffer greatly if their economic ties were to evaporate completely.

Second, many of the existing spats amount to little more than mere blustering. While preserving sea-lanes is of vital importance for trade (see Nguyen Thi Lan Anh’s discussion of this in chapter 2), the oil reserves in the region are largely unproven, and incidents involving fishermen are largely isolated given that several littoral states have not adequately developed a deep sea fishing industry. The issues require resolution because they have the propensity to escalate but the resources being fought over are yet to be proven as significant. There are also opportu-nities to cooperate on joint energy projects, while cooperation could further be extended into the marine fisheries area.

Third, the economic and military power of the United States and China dwarfs that of the smaller countries in the region. If China and America can resolve their differences, or figure out a way for their differ-ences to be managed harmoniously, this will be an important step in settling the remaining contested areas.

Still, many questions remain unresolved. Will this conflict ever be resolved, or should we content ourselves with mechanisms that merely manage the dispute? Will ASEAN be able to unify around a common desire to pass a binding code of conduct? Will the international legal system have the strength to intervene? What is America’s role as an arbiter, and can both China and the United States share relations with Southeast Asia harmoniously?

When Asia Society and the Centre on Asia and Globalisation at the Lee Kuan Yew School of Public Policy came together to host a two-day conference examining the South China Sea disputes in March 2013, these questions were already being tabled. Moreover, while the sugges-tions from that conference are yet to be fully realised, more discussion is needed to keep dialogue moving forward constructively and to prevent longer-term, irreparable damage.

192 Andrew Billo

United States and China: Agree to Disagree?

There is a strong case to be made that if the Chinese and Americans were able to find a resolution of their differences in East and South China Sea areas, then much of the region’s bickering over contested areas would also be dampened. Indeed, as Major General Zhu Chenghu, Dean of China’s Defence Affairs Academy, said in 2013, “If China and the United States cooperate, then we can look for peace” (Asia Society, 2013).

Nevertheless, there is an uphill battle toward cooperation. Political scientist Stephen Walt wrote in Foreign Policy that “the main issue is whether China will continue to tolerate America’s extensive and powerful military presence in East Asia or whether it will conduct a sustained effort to drive a wedge between the United States and its current allies and eventually force the United States out of the region” (Walt, 2013).

At present, China is successfully preventing America’s unhindered return to the region, while also showing unwillingness to compro-mise. For example, leaders in Beijing are convinced that their coun-try’s present trajectory toward increased strength can be maintained thus buying them more time in avoiding cooperation. Additionally, it is unlikely that the other claimant countries will form a united front against China over the South China Sea (as pointed out by Yee Kuang Heng in chapter 4 of this volume), thus making it difficult to contest China’s actions. Finally, despite the US rebalance, it would be highly disadvantageous for Washington to find itself in direct conflict with Beijing. Therefore, Washington has been very clear that it will not take sides in the dispute.

Nevertheless, resurgent US East Asian policy, marked by the above-mentioned “pivot” in 2011, still succeeds in irking China. Not only is an increased US military presence in the Pacific a threat to China’s ability to control the same waters, the United States also has signifi-cant economic and political relations with ASEAN states that China long courted without America’s interference. Where China has enjoyed some autonomy in the three decades preceding, the United States re-emerged looking to rebuild historically fraught relationships with Southeast Asian states, particularly Myanmar and Vietnam.

While leaders in China and the United States concede that the former’s development is rapidly approaching that of the latter’s, few, if any leaders within America openly admit that China’s economic or military forces may eventually be the largest in the world. As a result of their rivalry, collaboration isn’t seen as a priority at present, in spite of the fact that finding a way to cooperate would lend to the “peaceful


integration” of major powers “into a rules based international order” (Schiffer, 2009).

US criticisms of China are only growing. US vice president Joe Biden’s late 2013 trip to Asia showed the challenge of the US-China relationship and the sensitivities around that topic. After traveling to Japan, Biden called China out on its unilateral attempt to “change the status quo in the East China Sea.” He added that “[t]he world should not forget that our alliances have been critical for the stability that has made this region’s remarkable progress possible” and that the United States would “remain steadfast” in its alliance commitments (The Whitehouse, 2013).

In January 2014, a US State Department spokesman described the restrictions imposed by China on other countries’ fishing activities in disputed portions of the South China Sea as “provocative and poten-tially dangerous” (US Department of State, 2014). Yet China’s Foreign Ministry dismissed the US response as lacking in “common sense” and “with ulterior motives” (MFA PRC, 2014).

When Chinese and American naval vessels came within several hundred metres of each other in the South China Sea in January 2014, causing the US ship to take evasive action, US admiral for the Pacific Command Locklear blamed the episode on “inexperienced” Chinese operation (Alexander, 2014).

Most recently, the US Department of State’s Assistant Secretary for East Asian Affairs further stoked the fire by describing China’s claims as “fundamentally flawed” (US Department of State, 2014). This again invited a response from China’s Foreign Ministry, which stated, “To deliberately create an issue and play up tension will do no good to peace and stability of Southeast Asia” (MFA PRC, 2014).

US military and economic strength also arguably embolden China’s direct neighbours as well, who would otherwise lack the necessary resources to take a confrontational stance. Vietnam’s Ministry of Foreign Affairs, for example, released a statement saying, “Vietnam demands that China abolish the above said wrongful acts, and practically contribute to the maintenance of peace and stability in the region” (Dien, 2014). In 2012, it described China’s manoeuvring in the South China Sea as “illegal” and “seriously violating Vietnam’s rights” (BBC, 2012).

At the same time, Vietnam is careful to balance its criticisms with carrots. In advance of the 2014 Lunar New Year celebration, Vietnam’s Ministry of Foreign Affairs posted an article stating that Chinese presi-dent Xi Jin Ping and Vietnamese Communist Party secretary Nguyen Phu Trong, “spoke highly of the progress of Vietnam-China ties in 2013,” a sharp contrast to the aforementioned concerns. The article continued by

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stating that “[t]he two leaders also reached consensus on the persistent coordination in maintaining peace, stability in the East Sea [South China Sea] in accordance with the joint perspectives and agreement reached by senior leaders of Viet Nam and China” (Permanent Mission of the Socialist Republic of Viet Nam to the United Nations, 2014). Whether the top leadership in both countries honour their commitment to coop-eration on the two countries’ territorial disputes remains to be seen.

The Philippines has been more uniform in its anti-China stance, however, in large part because of the historical military alliance it has enjoyed with the United States. Its Department of Foreign Affairs stated that the enactment of China’s fishing law in Hainan, “escalates tensions, unnecessarily complicates the situation in the South China Sea, and threatens the peace and stability of the region” (Cerejano, 2014). In a New York Times interview, President Aquino of the Philippines drew a comparison between the conflict and the start of the Second World War: “At what point do you say, ‘Enough is enough’? Well, the world has to say it – remember that the Sudetenland was given in an attempt to appease Hitler to prevent World War II” (Bradsher, 2014).

The still untested US commitment in the Asia-Pacific region is also changing the balance of power and leading to dangerous hedging on the part of Asia’s medium powers. While US military support may encourage a stronger stance against China on the part of Vietnam and the Philippines (and Japan in the East Sea), it is not yet known how far America will go to support these partners. As such, this has also led these states to develop their own domestic military strength in the event the United States will not come to their aid in the long term.

Indeed, countries like Vietnam are increasingly looking to China and the United States to act with transparency, particularly as they make up their minds on which power is a more reliable partner for the remaining decades of the twenty-first century. This sentiment was reinforced by Vietnam’s prime minister Nguyen Tan Dung at the 2013 Shangri-La Dialogue when he said that “big states” should also have a greater role in the “cultivation and consolidation of such strategic trust” (Nguyen, 2013).

Unfortunately, as mentioned above, China need not compromise at present, nor does it see itself benefitting from the use of interna-tional legal mechanisms to resolve questions of territorial sovereignty. By virtue of international discord as well as its strongly held domestic beliefs regarding its continued status as a rising power, China will remain “strategically ambiguous” about the nine-dash line. Beijing will also show increasing willingness in adopting a multilateral approach to


developing resources in the area, provided the sovereignty issues are left out of the discussion. Finally, China will insist on a bilateral approach to solve the territorial issues. In sum, China will stay firm, and in doing so, is adding a formidable challenge to finding a solution.

The United States also faces a considerable dilemma as a domi-nant power in maintaining regional peace and stability. On one hand Washington has realised that its relations with China are critical to regional stability. This has been repeatedly asserted by numerous offi-cials from the United States including President Obama himself. On the other hand, it cannot and should not appease Beijing’s assertive policy. After all, China challenges not only the sovereignty of disputed islands but also the established international order in the region. This approach is growing to become increasingly problematic given the rapid rise of China with the impressive military build-up. This has changed the secu-rity landscape in the South China Sea.

Nationalism

Nationalism has also been a source of tension in the territorial disputes in the South China Sea area. Defined as “a political creed that under-lies the cohesion of modern societies,” which “centres the supreme loyalty of the overwhelming majority of the people upon the nation sate, either existing or desired” (Young, 1979), it has served to maintain the legitimacy of governments in a region mired by widespread corrup-tion and bureaucratic inefficiencies. As such, most of the South China Sea claimant states are guilty of perpetuating nationalist tendencies, and the South China Sea dispute serves as an ideal distraction from domestic challenges. Left unchecked, nationalist policies perpetuated by regional governments distract from the realities of the dispute, thus making the possibility of rational and unemotional discussion less likely.

The challenge for Asian states in confronting nationalism relates to both the region’s history, as well as the present economic situation, which has shown signs of weakness in recent years and months.

In the twentieth century, nationalist forces competed with colonial influencers. Many Southeast Asian states were stripped of their autonomy, carving out a niche for nationalist resistance forces to push back against the colonial authority. The legacy of this stems today, when we consider the dangerous hedging that takes place amongst several Southeast Asian states. Even the view of a country like the Philippines, arguably the most ardent ally of the United States within ASEAN, is tempered by a legacy of mistrust (Billo & Pan, 2012). The same is true of Myanmar’s relationship

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with China, which has soured considerably in the last eighteen months because of China’s inability to address issues surrounding investments in Kachin State in particular (Berger, 2013).

The Asian economic miracle, which impressively lifted millions from poverty in just a few decades, is being increasingly tested. China, for example, will weather several significant economic reforms and a likely slowdown in the coming years as its government seeks to maintain control over its economy (Yao & Wang, 2014). In Southeast Asia, the economic assessment is more mixed, but nevertheless governments are largely struggling with the implementation of similar reforms in response to inflated property values (Colombo, 2014) and a reduction in government subsidies (Monaghan, 2014).

The more the region seems to have economic challenges, the more it will fall back on the nationalistic fix of creating an illusion of state supremacy. In spite of this, nationalist tendencies show no signs of abating.

For the first time in history, Hanoi publically marked the 40th anni-versary of China’s invasion of the Paracel islands. The state-controlled Thanh Nien news website published a page dedicated to the fortieth anni-versary of the 1974 naval battle, where more than seventy sailors from US-backed South Vietnamese regime were killed (Thanh Nien, 2014). The anniversary was further marked by a rare public protest (AFP, 2014).

The Philippines has also taken a hard-line with regard to the disputes. In addition to his more recent comments, as mentioned above, in 2012, President Aquino signed an order officially renaming the South China Sea area as the West Philippines Sea (Ubac, 2012). While much of the Philippines’ resources have been devoted to using international legal mechanisms like the UN Convention on the Law of the Sea, the country’s politicians have simultaneously taken unhelpful actions like visiting the contested Spratly Islands and singing their country’s national anthem (BBC, 2011).

China is also no stranger to nationalist rhetoric. As one analyst wrote, “The country is guilty of boosting its international stature while condi-tioning people in China to think positively about Chinese foreign rela-tions.” In other words, with the government losing some of its lock on public thought and opinion, its tendency has been to portray China as the oppressed victim, consistently exploited by other powers (Sutter, 2012).

Addressing nationalism will be vital for also resolving the dispute. Resolution cannot be found unless claimant states are willing to sacrifice some of their short-term domestic political gains in the name of a future centred on regional cooperation.


A Role for ASEAN?

ASEAN has shown some promise in recent months toward getting the South China Sea dialogue back on track. While initially there were concerns about Myanmar’s 2014 ASEAN chairmanship, given the coun-try’s recent historical alliance with China, those concerns are now abating as the country looks to balance its interests between the United States and its northern neighbour.

Indeed, the 2014 ASEAN Foreign Ministers’s Meeting in Myanmar showed a marked improvement over the 2012 gathering in Cambodia, when ASEAN’s top diplomats failed to issue a joint communiqué for the first time in its history (BBC, 2012). The 2014 meeting not only netted a joint communiqué, but also made specific reference to “increased tension” in the South China Sea area (Economist, 2014). Still, a signifi-cant hurdle remains as Laos, which enjoys a relationship with China rivalling Cambodia’s, takes over the chairmanship in 2015.

ASEAN’s long-discussed COC (also mentioned in the introduction to this chapter) remains alive, although it is highly unlikely to see enactment in the near future, given China’s strong preference for bilateral negotia-tion. Most members of ASEAN, and additionally the United States, have long favoured multilateral resolution of the territorial dispute while China has argued that the dispute must be one that is strictly handled on a bilateral basis directly with the countries concerned.

Singapore provides a strong example of how ASEAN members are addressing the need to balance interests between the United States and China. Although a strong ally of Beijing, Singapore has welcomed America’s participation in the region and offered a guiding hand. Its prime minister, Lee Hsien Loong, stated his country would “help America engage in the region, constructively, productively and in a way that fosters the stability and prosperity of all the countries” (The White House, 2013).

Nevertheless, ASEAN states are also wary of the strength of the US presence. The US government shutdown in late 2013 prevented Barack Obama from attending the Asia Pacific Economic Forum in Bali, making the United States the only country without head of state representation. When asked about Obama’s absence, Singapore’s prime minister Lee voiced concern: “We prefer a US president who is able to travel and fulfil his international duties to one who is preoccupied with his national domestic preoccupations” (Otto & Brereton-Fukui, 2013).

Ideally a best of both worlds policy could be pursued, one that welcomed a strong, and shared, US-China regional security presence,

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coupled with strong relations with both America and China. However, this seems unlikely to happen. China cannot rely on the United States to act in its interest from a security perspective, nor can it expect the United States to not encroach upon its relationship with ASEAN states.

Japan has also showed renewed interest toward ASEAN, particularly with Prime Minister Shinzo Abe at the helm. As The Economist wrote in June 2013, Japan’s “ministers have tripped over each other in Southeast Asian capitals, offering new investment, aid and more” (The Economist, 2013). This adds an additional ingredient to the mix, and will likely pose a greater threat to China’s – than to America’s – interests in the region.

In light of this, the sensible course of action for China, vis-à-vis ASEAN, is to focus on developing positive economic and political rela-tions, while gradually developing a strong, but defensive, regional mili-tary force. However, given China’s strong action in the South China Sea area, the country is viewed increasingly by most ASEAN states as less trustworthy than America. China could reverse its fortunes in this respect by consistently building its economic relations while simultane-ously backing down from its aggressive posturing. This would allow a window for Japan and the United States to also stand down from forceful rhetoric and actions.

In addition, as Yee Kuang Heng asserted earlier in this volume, it will be important for ASEAN to present a united front in dealing with its external stakeholders. To achieve this aim, those powerful external states influencing the Southeast Asian region must also act responsibly so as to unduly sway and tip the already precarious balance.

Bright Spots on the Horizon?

Given the shift of strategic balance in the region, we are not optimistic about any solution in the South China Sea in the foreseeable future. In this regard, our conclusion is that the best approach towards this explo-sive issue should focus on management, thus preventing escalation into a disastrous conflict.

Still, it would be remiss to not highlight some points of optimism. For example, the United States invited China to join its Rim of the Pacific exercise – RIMPAC – in 2014, and China agreed to participate (Harris, 2014). China’s ambassador to the United States, Cui Tiankai, also said there’s a growing consensus amongst the Chinese that aims for a new model of relationship with “win-win” cooperation and “mutual respect” (Tiankai, 2014).


The achievement of a positive outcome is dependent largely upon the United States, still the world’s sole hegemon, even if its role is increas-ingly being challenged. America’s capacity to role model policy that adheres to international law will be important, including its often trum-peted commitment to a “rules-based system that respects international laws and adheres to well-established norms” (Harris, 2014).

Unfortunately, recent US history has done much to undermine its credibility by acting in its own interest. Only little more than a decade ago did America ignore international law in favour of its incursion in Iraq thus risking the possibility of rendering the UN Security Council irrelevant (McClain, 2002). Prior to that, in the case of Nicaragua v. the United States at the International Court of Justice in 1984, the United States set the dangerous precedent of ignoring the Court’s decision and refusing to pay reparations (Billo, Fall 2013). For a rising China, decades behind the United States in terms of its economic development, there is little incentive to adhere to these structures and hence it is selective in its own adherence to various aspects of the international legal system.

Nevertheless, the impetus for cooperation is still strong. What is at stake, from a natural resources perspective, may be largely overblown, as we have seen in the vastly differing estimates of the resources available within the South China Sea area. In other words, the resources within the South China Sea may not be worth the fight that is presently occur-ring (Billo, Fall 2013).

For example, the fishing sector is yet to be significantly impacted as smaller states like the Philippines and Vietnam lack the appropriate vessels to access the contested fishing grounds, which are mostly found well away from their shores (Pomeroy, 2008). This will change, however, as these countries gain new fishing technology that permits deep-sea fishing. In the meantime, China is already setting up significant deep sea fishing operations of its own, a worrisome fact for ASEAN coun-tries that presently are limited to remaining on the sidelines (Lyons & Davenport, 2012).

Energy exploration is also largely underdeveloped owing to past exploratory expeditions being interrupted in contested waters. The expeditions of different countries have been repeatedly halted as a result of the criss-crossing sovereignty claims (Hookway, 2011). Nevertheless, it is paradoxically hydrocarbons, and the significant level of resource potential they hold, which may make cooperation a possibility as well. A recent exploratory vessel with an American ship, and Chinese and Filipino scientists, bodes well for all parties making joint assessments of the region (Chen, 2014). Efforts within the private sector to cooperate

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with regard to energy exploration may also yield positive results. Most importantly, China may agree to joint exploration, provided that sover-eignty issues are left off of the table.

As much as the dispute is international, domestic issues will continue to play a major role. In the case of the United States, in spite of the challenges posed by its broad “strategic pivot,” Barack Obama’s presi-dency has projected relative moderation in its international foreign policy strategy. The administration has arguably won favour within most Southeast Asian countries, with the exception of Cambodia and Laos whose allegiance to China remains strong. Whether subsequent US administrations are capable in projecting soft power effectively will be important for the direction of the dispute.

Further, questions also remain about the new Chinese leadership, and President Xi Jinping’s known connections with China’s military estab-lishment. The future of China’s economy, which is undergoing substan-tial reform, is also cause for concern. The possibility of these significant domestic reforms souring will further challenge China’s capacity to maintain a rational and stable platform for its international policies.

Similarly, the United States is clearly in an era of transition. Its own economy is yet to fully recover more than five years after suffering from its most significant financial crisis. Its foreign policy is further crippled by highly polarised politics in its domestic arena.

Therefore, two central questions remain. Can the United States, as a large democracy, lead the world in taking an unwavering, participatory, and structured approach to international relations? Can China, whose military spending dwarfs that of its neighbours (and likely the United States over the next two decades), behave in a way that heeds the advice of its former leader Deng Xiaoping, who emphasised the setting aside of territorial disputes in favour of joint development (MFA PRC, 2000)?

All of the potential avenues for dispute resolution, whether a more conciliatory interpretation of the historical record, a reduction in nation-alist forces, strengthened international legal mechanisms, a stronger, unified ASEAN, and, most importantly, improved US-China relations, cannot be considered in isolation. Taken in combination, these different facets present a means for well-informed, apolitical individuals within states to devise cooperation-minded policies and achieve the ideal of “good neighbourliness” that so often is discussed within ASEAN.

Most importantly, it will take the joint effort of the international community to persuade the Chinese leadership to adhere to interna-tional law. This would not only serve the interests of various Asian countries, but also China. Indeed, the latter’s tremendous success in


the past few decades is attributed to its effort to integrate itself into the international system through its policy of reform and openness and not expansion. A rules-based global order is good for China. This effort not only originates from countries that have a dispute with China, but China itself. It is in this regard we continue to promote the process of communication and consultation, within our capacity, between China and other claimant countries on the issue. This volume is a token of our efforts.

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Young, C. (1979). The Politics of Cultural Pluralism. Madison: University of Wisconsin Press.

205

Abe, Shinzo, 74, 115, 151, 156, 198Acharya, Amitav, 85Air Defence Identification Zone

(ADIZ), 189Akbayan, political party, 107Alcaraz, Ramon, 114Amboyna Cay, 18Amphitrite, 16–17Annex VII of UNCLOS, 55, 109

arbitration, 44, 109–10Article 3 of, 59, 120–1n35–7Barbados v. Trinidad and Tobago

(2006), 43–4Philippines invoking, 39, 44–7, 54Philippines v. China arbitration,

57–9unilateral invocation of, 47–8

Annex VIII, of UNCLOS, 55, 109APEC (Asia Pacific Economic

Cooperation), 108Aquino, Benigno, 6, 77, 90, 105, 108,

113, 115, 119n9, 196Armed Forces Modernisation

Program, 113Arroyo, Gloria Macapagal, 6, 30,

105–7, 166, 179Arroyo, Miguel, 106Article 3 of Annex VII to

UNCLOS, 59, 120–1n35–7Article 15, of UNCLOS, 46, 50n27Article 33, of UN Charter, 42Article 37, of UN Charter, 49n10Article 39, of UN Charter, 49n10Article 121, of UNCLOS, 47, 62Article 122, of UNCLOS, 48Article 281, of UNCLOS, 44, 50n19Article 282, of UNCLOS, 44, 50n21Article 283, of UNCLOS, 108Article 286, of UNCLOS, 43, 49n12,

49n15, 109Article 287, of UNCLOS, 43, 49n13–14,

109Article 290, of UNCLOS, 109

Article 298, of UNCLOS, 43, 46, 49n17, 49–50n18, 56, 57, 64

ASEAN (Association of Southeast Asian Nations), 1, 7, 8, 11, 48, 78–9, 93, 164, 190

application of United Nations Convention on the Law of the Sea (UNCLOS), 84–6

centrality, 70–2, 156claimants Philippines and

Vietnam, 90–1difficulties in remaining

neutral, 72–5disputes concerning UNCLOS

provisions, 57divergent member interest, 87–93engagement with China, 82exercising self-restraint, 86–7limitation of ASEAN way, 168–70negotiation of code of conduct

(COC), 83–4non-claimants Indonesia and

Singapore, 91–2past chairs from Cambodia and

Brunei, 88–90regional institutions falling

short, 151–2role for, 197–8role in regional security, 75–8security challenges, 69–70six-point principles, 71

ASEAN Regional Forum (ARF), 85, 102, 118, 120n13

ASEAN-China Joint Working Group, 103, 178

ASEAN-China track, 48, 78, 83, 88, 93, 175

Asia Pacific Economic Forum, 108, 197

Asia Society, 10, 191award, South China Sea

disputes, 61–3Ayungin Shoal, 151

Index

206 Index

Bajo de Masinloc, 101Ban Ki-Moon, 85banana exports, Philippines, 107Barbados v. Trinidad and Tobago

(2006), 43–4Bateman, Sam, 172Beckman, Robert, 174, 190Biden, Joe, 193Bo Xilai, 30boycott of China-made goods,

Philippines, 107Brunei, 1, 4, 6, 18, 21, 26, 40, 69, 78,

84, 164, 167, 179ASEAN chair, 88–90, 105, 152,

170Brunei Darussalam, 54, 64

Cairo Declaration, 18, 19Cambodia, 69, 70, 73–5, 77, 92, 93,

169, 197ASEAN chair, 88–90, 105, 117, 152,

172Capability Upgrading Program

(CUP), 114Carter, Ashton, 153Centre on Asia and Globalisation

(CAG), 10, 191charm offensive, 6, 87Charter of United Nations (UN

Charter), 41–4Chen Shui-Bian, 134Chiang Ching-Kuo (1978–88), 129,

132Chiang Kai-Shek (1949–75), 129China, 1, 73

ASEAN-centric framework, 82, 94assertiveness, 8, 149–50indisputable sovereignty, 151, 180law enforcement, 167–8Philippines, 39, 44–7, 90, 99, 165–6resistance to settling the

dispute, 39–40strategy, 40–1tensions, 59–69, 150–1, 152–3Vietnam, 90–1, 165

China and United Statesadvancing international law, 154–6agreeing to disagree, 192–5

competing influence, 27–8dialogue and management

providing hope, 154–8military-to-military relations, 158regional security, 197–8reinforcing regional

institutions, 156–7sources of optimism, 158–9strengthening military capacity and

confidence, 157zero-sum relations, 157–8

China Global Investment Tracker, 88China Maritime Surveillance (CMS)

force, 167Chinese Communist Party (CCP), 3,

129Chinese People’s Daily (newspaper), 29CLCS (Commission on the Limits of

the Continental Shelf), 165Clinton, Hilary, 27, 94, 112, 150,

170–1Cloma, Tomas, 3, 100–1, 119n3CNOOC (China National Offshore

Oil Corporation), 136, 137, 166

code of conduct (COC), 11, 44, 71, 164, 190

ASEAN Declaration (1992) establishing, 102–3

implementation and adoption of, 176–8

negotiation of, 83–4Cold War, 26, 69colonization, beginnings of

dispute, 15–19Constructing a Security Community in

Southeast Asia (Acharya), 85continental shelf, legislation, 46–7Cot, Jean-Pierre, 60, 110cow’s tongue, 189CPC (Chinese Petroleum

Company), 136, 137credible minimum deterrence

capability, Philippines, 113–15Cuarteron Reef, 45, 58, 111Cui Tiankai, 198

de la Cruz, Angelo, 106

Index 207

Declaration on the Conduct of Parties in South China Sea (DOC), 8, 48, 71, 103–5, 164

implementation and adoption of, 176–8

del Pilar, Gregorio, 114del Rosario, Albert, 72, 76Democratic Progressive Party (DPP), 7Deng Xiaoping, 9, 149, 180, 200Diaoyu Islands, 41, 138, 150, 151dispute settlement

exceptions from, in UNCLOS, 56law concerning, 20, 22UNCLOS, 39, 40, 42see also legal disputes

domestic factors, South China Sea, 28–31

Donilon, Tom, 158Doronila, Amando, 115DPP (Democratic Progressive

Party), 128, 133, 134, 137–41

East China Sea, 24, 28, 41, 115, 121n36, 139, 149, 150–1, 158–9, 193

economics, South China Sea, 22–4Economist, The (magazine), 190,

198effectivités, full title, 20energy exploration, 199–200Enhanced Defence Cooperation

Agreement (EDCA), 114, 122n55Exclusive Economic Zone (EEZ), 4, 43,

49n12, 62, 110, 111, 112, 156200 nautical mile, 4, 17, 101, 156China, 40, 41, 58, 64Philippines, 46–7, 57, 63, 101

Fiery Cross Reef, 45, 58, 112First World War, 19fishing industry, 2, 5–6, 23–4, 199Foreign Policy (Walt), 192Formosa, 19France, 15, 16f, 17–18, 27, 60, 115,

171Freedom Land, 100–1freedom of navigation, concept, 2Fu Ying, 75

Gaven Reef, 45, 58, 112Global Times (newspaper), 29globalization, 3–5Goh, Evelyn, 74Great Powers, 74, 75, 79, 158, 170–3Grotius, Hugo, 152Gulf of Tokin, 27, 169

Heritage Foundation, 88historic titles, term, 46historical waters, 129–30, 132,

137–8HMS Rifle, 17Hor Namhong, 73Hu Jintao, 105Hua Chunying, 31hydrocarbon resources, 23, 26, 106,

165, 178, 199

Ile de la Tempeté, 17inchoate title, initial title, 20India, 2, 155, 157, 170–2Indonesia, 40, 62, 69, 71–2, 79, 84,

86, 88, 101, 102, 115, 169, 177ASEAN non-claimant, 91–2Kopassus Special Forces, 173

Inter-Ministerial Task Force, Taiwan, 139–40

International Court of Justice (ICJ), 55, 109, 168, 174

international lawadvancing, 154–6development of, 20–2dispute settlement, 20, 22law of the sea, 20, 21–2rejecting, 152–3reliance on, 173–5territorial acquisition, 20–1United Nations (UN) law and

UNCLOS, 41–4Ishikane, Kimihiro, 75Island of Palmas, 113, 122n49islands, 62, 85, 152ITLOS (International Tribunal for Law

of the Sea), 55, 59, 61, 109–10, 168, 174–5

Itu Aba Island, 3, 18, 129–33, 134, 136, 141–2

208 Index

Japan, 2–3, 7, 16, 18–19, 30, 40–1, 74–5, 79, 137, 150, 170–2

marine disputes, 150–1Philippines, 90, 101, 107, 115United States, 28, 153, 156–7

Japanese Maritime Self-Defence, 27Jardeleza, Francis, 110Johnson Reef, 45, 58, 59, 111, 166,

176Joint Communiqué, 18, 19, 73, 84,

105, 169, 197Joint Development Agreement, 40–1Joint Marine Seismic Undertaking

(JMSU), 106, 107, 166, 179–80jurisdiction, 18, 46, 83, 85, 175

ASEAN’s role in security, 75–8compulsory, 9, 22dispute under UNCLOS Part

XV, 55–6interference with, 63maritime, 39, 45, 48, 50n22, 112Philippines, 57, 58, 60–1, 100–2,

104–5, 108–13, 118

Kalayaan Island Group (KIG), 58, 64, 100, 101, 112

Kaplan, Robert, 150Kerry, John, 156Kim Jong-un, 158Kishida, Fumio, 115KMT (Kuomintang) political party, 7,

128, 134–5, 138–41Koh, Tommy, 174Kopassus Special Forces, 173

Laos, 74, 93, 169, 172, 197, 200Le Luong Minh, 84Lee Hsien Loong, 70, 72, 77, 78Lee Myung-bak, 115Lee Teng-Hui, 128, 130, 132, 136–7,

141legal disputes, 54–7, 63–4

binding force of arbitral tribunal, 56

concerning UNCLOS, 55court or tribunal with jurisdiction

for disputes under UNCLOS Part XV, 55–6

effect of award on, 61–3exceptions from dispute settlement

procedures in UNCLOS, 56interference with sovereign rights

and jurisdiction, 63issues concerning islands, 62issues concerning low-tide

elevations, 62–3issues concerning rocks, 62issues concerning submerged

features, 62–3legality of maritime claims within

nine-dash line, 61–2sovereignty over off-short

islands, 54–5UNCLOS provisions not excluded

by China’s declaration, 57see also South China Sea disputes

lex specialis, 42Li Keqiang, 177Loaita Reefs, 18low-tide elevations, legal disputes

concerning, 62–3Luzon, 24, 101, 114, 122n53

Ma Keqing, 112Ma Ying-Jeou, 135, 136–7, 142,

143n2Malaysia, 1, 6, 21, 26–7, 40, 54, 62,

64, 69, 78, 112, 134–5, 152, 164–5, 167, 173, 179

claimant state, 93fishing industry, 23–4

management issuesimplementing and adopting code of

conduct, 176–8joint cooperation, 178–80step towards solutions, 10–11

Manchuria, 19Manila Bulletin (newspaper), 77Mao Zedong, 129, 150maritime claims. See nine-dash linemaritime disputes, value of

resources, 7–8maritime jurisdiction, 39, 45, 48,

50n22, 112McKennan Reef, 45, 46–7, 58, 112Meiji Jiao, 102

Index 209

Mensah, Thomas, 60Ming Dynasty (1368–1644), 2Mischief Reef, 6, 45–7, 58, 102, 103,

105, 112, 114, 176multilateralism, South China Sea

disputes, 168–70Mutual Defence Treaty (MDT), 114,

172Myanmar, 75, 152, 172, 192, 197

ASEAN chair, 93relations with China, 169, 195–6

Natalegawa, Marty, 84National University of Singapore, 9nationalism, 5–6

Chinese navy, 30–1disputes in South China Sea, 28–31South China Sea, 195–6

NATO (Non-Atlantic Treaty Organisation), 69, 157

navigation route, South China Sea, 24, 25f

Netherlands, 15, 16, 60, 110Nguyen Dynasty (17th–19th

centuries), 3Nguyen Phu Trong, 193Nguyen Tan Dung, 29, 194Nicaragua v. the United States

(1984), 199nine-dash line, 122n48, 152, 154,

159n9, 165China’s claims in South China

Sea, 76, 85, 91, 189, 194legality of maritime claims

within, 61–2, 111–13, 179

Obama, Barack, 105, 160n26, 173, 195, 197, 200

Obama administration, rebalancing strategy, 27, 116, 153, 156

off-shore islands, disputes on sovereignty, 54–5

oil and gas reservesChina, Vietnam and

Philippines, 166China and Taiwan, 136energy exploration, 199–200South China Sea, 23, 26

Oil and Natural Gas Corp (ONGC), India, 172

ownership, islands, 42–3

Panatag Shoal, 101Paracel Islands, 1–3, 17–21, 26, 45,

83, 103, 166, 189, 196China and Vietnam, 54, 130, 150,

166, 172, 176Part XV, of UNCLOS, 55–6Pawlak, Stanislaw, 59, 110People’s Republic of China (PRC). See

ChinaPermanent Court of Arbitration in

Hague, 6, 60Pescadores, 19PetroVietnam (Vietnam Oil and Gas

Group), 172Philippine Constitution, 100Philippine Star (newspaper), 77Philippines, 16, 30

Annex VII Arbitration, 39, 44–7ASEAN approach, 78, 90–1credible minimum deterrence

capability, 113–15dealing with China, 194diplomatic track and its

travails, 105–8fishing industry, 23–4friction with China, 165–6law of the sea, 21legal framework, 100–1legal track into uncharted

waters, 108–13Manila’s three-track

approach, 101–5multi-party dispute, 99–100Notification and maritime

jurisdiction, 45, 50n22public opinion of disputes, 29risk and challenges, 115–18Scarborough Shoal standoff, 5, 6support of United States, 171–2

Philippines v. China arbitration caseChina’s failure to participate in

arbitration, 59–60intervention by other states, 60–1limits of Philippines’ claim, 57–9

210 Index

Philippines v. China arbitration case – continued

main issues, 58–9procedural issues, 59–61provisional measures, 61settlement of case, 61

Pinto, Chris, 110Pitsuwan, Surin, 70, 75, 79Potsdam Declaration, 18, 19Pratas Islands, 131Principled Consensus, 41, 48n6public opinion, disputes in South

China Sea, 28–31

Qian Qichen, 91Qing Dynasty (1644–1911), 2

rebalancing strategy, Obama, 27, 116, 153, 156

Regime of Islands, KIG and Scarborough, 101

regional institutionsfalling short, 151–2reinforcing, 156–7

Republic Act No. 9522, 101, 119n6, 119n7

rocks, 45, 47, 62, 152

San Francisco Treaty, 3, 18, 19Scarborough Shoal, 45, 58, 59, 62, 69,

73, 86, 90, 101, 108, 165standoff, 5, 6, 29, 30, 54, 87, 104,

107, 150, 165–6, 172Second Thomas Shoal, 69Second World War, 2–3, 7, 18–19, 27,

69, 166, 194security

ASEAN’s role in regional, 75–8China and South China Sea, 8Philippines, 32n22South China Sea, 26–7United States and cooperation,

158US-China regional, 197–8

Senkaku Islands, 41, 115, 138, 150, 151, 153

Severino, Rodolfo, 72, 83, 103Shanmugam, K., 70

shipping lanes, Southeast Asia, 24, 25fSin Cowe Island, 18Singapore, 69–73, 77–9, 169

ASEAN non-claimant, 88, 91–2United States and China, 172, 174,

197Sino-Japan War of 1885, 2Soons, Alfred, 60, 110South China Sea, 1, 189–91

colonisation and early beginnings of dispute, 15–19

competing influence of China and United States, 27–8

domestic factors, 28–31economic factors, 22–4future, 198–201geo-strategic importance, 26–8management for solutions, 10–11nationalism, 195–6ownership of islands, 9regional institutions running

short, 151–2Taiwan, 142–3United States and China, 192–5

South China Sea disputesdevelopments and causes for

escalation, 165–8implementation and adoption of

code of conduct, 176–8involvement of Great

Powers, 170–3joint cooperation, 178–80management issue, 175–80multilateralism and limitations of

ASEAN way, 168–70reliance on international law,

173–5solutions for, 168–75see also legal disputes

Southeast Asia, 1, 3–6, 8, 15, 16f, 24, 25f, 83, 94, 154, 167, 169, 171, 191

sovereign rights, 45–6, 57, 58, 63, 85, 110, 130, 165

sovereignty, 1–5, 9, 15, 17–24, 29, 74, 76, 85, 90, 100, 164–8, 170, 174–81, 194–5

China and Philippines, 57–60

Index 211

China’s U-shaped line, 45–6debate about, 149, 151, 153, 154disputes over off-shore

islands, 54–5maritime claims, 61–2, 63Philippines, 100–4, 111–16Taiwan, 128–32, 133–8, 141–3

SOVFA (Status of Visiting Forces Agreement), 115, 122n57

Spratly, Richard, 17Spratly Islands, 1–4, 17–24, 26–7,

54, 62–4, 69, 77, 103, 106–7, 113, 129, 131–6, 151, 179, 196

Stockholm International Peace Research Institute (SIPRI), 167

Subi Reef, 45, 58–9, 112submerged features, 21, 45, 50n23,

58, 62–3, 112Swallow Reef, 24, 135

Tai-Ping Islands, 130Taiwan (Republic of China), 1, 6–7

changing positions, 132–3deciphering the shifting

attitudes, 133–4fishing industry, 23fragmented administration, 139–40historical claims, 140–1modern interpretation of

disputes, 136–7politics, 139–43prospects in South China Sea

dilemma, 142–3South China Sea policy, 128–34twenty-first century

uncertainties, 134–6terra nullius, belonging to no one,

19, 20territorial acquisition, law

concerning, 20–1Thailand, 69, 73, 93, 169, 172Thanh Nien (news website), 196Thayer, Carlyle, 74, 104Thitu Island, 18tianxia, influence of China, 28–9Till, Geoffrey, 7Tingyang, Zhao, 28

tourism, 24, 105, 107, 133Trans-Pacific Partnership (TPP),

rebalancing policy, 156–7Treaty of Amity and Cooperation

(TAC), 76, 83, 86, 102, 119–20n12

type A disputes, 42–3type B disputes, 43type C disputes, 43type D disputes, 43

UNCLOS (United Nations Convention on the Law of the Sea), 2–4, 9, 54, 72–3, 76, 82, 109–10, 129, 164, 190

application of, by ASEAN, 84–6dispute-settlement mechanism, 39,

40, 42, 55international law, 152–3Philippines maritime claim, 99–100Philippines-Chinese

arbitration, 154–5policy in international law, 41–4United States and, 155–6

United Kingdom, 15, 16, 18United Nations. See UNCLOS

(United Nations Convention on the Law of the Sea)

United Statescompeting influence with

China, 27–8military-to-military relations with

China, 158policy questions, 153–4supporting Philippines, 171–2territories in Southeast Asia, 16fsee also China and United States

United States’ Energy Information Administration, 26

United States Maritime Strategy, 27US Excess Defence Article (EDA)

Program, 114U-shaped line, 128–9, 138. See also

nine-dash lineUSNS Impeccable, 86USS John McCain, 86

Valencia, Mark, 70

212 Index

Vietnam, 1, 29, 64, 192ASEAN, 90–1, 94dealing with China, 5–6, 165, 193–4fishing industry, 23–4

Vietnam Oil and Gas Group (PetroVietnam), 172

Visiting Forces Agreement (VFA), 114, 122n54

Walt, Stephen, 192Wolfrum, Rüdiger, 59, 109–10Woody Island, 3, 87World Trade Organization, 159world wars. See First World War;

Second World War

Xi Jinping, 108, 149–50, 193, 200Xue Hanqin, 73

Yanai, Shunji, 110Yang Jiechi, 74, 112Yellow Sea, 40, 41

Zheng He (1405–33), 2Zhongxing Telecommunications

Equipment Company (ZTE), 106, 120n19

Zhu Chenghu, 192Zone of Peace, Freedom, Friendship,

and Cooperation (ZOPFFC), 104, 176

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