Policy Alert #105 | August 4, 2015

The launch of a UN arbitration tribunal on the China-Philippines maritime dispute has Asian powers watching closely as these debates unfold. From July 7 to 13 at The Hague, the Philippine delegation argued China violated the Philippines’s rights to exploit waters within a 200-nautical mile exclusive economic zone (EEZ) as established by the 1982 U.N. Convention on the Law of the Sea (UNCLOS). The treaty – which set rules on countries’ exercise of maritime activities – counts China, the Philippines, ASEAN countries, and many others as member-states. Sea-lanes through the South China Sea account for $5 trillion in trade every year. Therefore, the case could have a significant impact on many Asian nations, including Indonesia, Japan, Malaysia, Thailand, and Vietnam who attended the hearing as formal observers.

While Beijing refused to formally participate in the UN Permanent Court of Arbitration (PCA) – the chosen UNCLOS dispute resolution mechanism – Chinese officials have taken opportunities to state their case through formal and informal channels, raising legal questions about whether China can dip its toes in the water without getting drowned by the tribunal’s verdict. Before the tribunal can begin to consider the case, the PAC will first decide if it has jurisdiction over the dispute in question before a later possible hearing to determine the legal merits of the Philippine complaint.

This Policy Alert — written by Timothy Westmyer, the program and research assistant at the Sigur Center, is part of our series on Energy and Maritime Security for the Rising Powers Initiative’s new project: The Linkages between Energy Security and Maritime Strategies in the Indo-Pacific. The research effort looks at how energy security debates shape and influence maritime strategies and vice-versa in China, India, Japan, the Philippines, and Vietnam and the implications of these linkages for U.S. policy toward the region.

BACKGROUND

The Philippine case against China challenges Beijing’s so-called “nine-dash line” claim over large parts of the South China Sea. The nine-dash line concept is a leftover of the 1940s KMT government in China drawing a line of sovereignty around hundreds of islands, reefs, and atolls in the region. Last year, the U.S. Assistant Secretary of State for East Asian and Pacific Affairs Danny Russel testified the use of the “nine-dash line” concept would be “inconsistent with international law.”

According toThe Diplomat’s Asia Geopolitics podcast, the tribunal examines three basic issues: (1) the validity of the nine-dash line claim; (2) the nature of legal entitlements and effects of features China is building in the region such as low tide rock formations, reefs, and artificial islands; and (3) the legitimacy of allegations China restricts Philippine activity in the region such as oil and gas exploration and fishing. The PCA has vowed to deliver a verdict on whether it has jurisdiction before the end of this year or “as soon as possible.”

ENERGY SECURITY LINKAGES

In addition to Manilla’s claims that China has “irreversibly damaged the regional marine environments” and threatened the livelihood of the Filipino fishing industry, the role of energy security and potential energy resources in the region have become a central part of this debate:

• Philippine Supreme Court Senior Associate Justice Antonio Carpio noted as his country’s primary gas field will run out in 10 years, the country desperately needs to develop the Recto Bank (Reed Bank) natural gas field in the South China Sea. However, the Chinese coast guard, according to Carpio, harasses Philippine survey teams and his country will “lose the entire Reed bank if we lose this case to China.”
• In an op-ed for The Philippine Inquirer, political commentator Bernie V. Lopez saw China “in despair for energy” and will soon establish naval bases in disputed waters to defend its claims.
• In contrast to Philippine President Benigno “Noynoy” Aqunio III, Vice President Jejomar Binay called for joint Sino-Philippine development of natural resources in the region.
• Responding to calls for Manila to “simply agree to joint use” and “revenue sharing in case oil is struck” in the islands, The Philippine Star columnist Ana Marie Pamintuan retorted the massive size of China’s reclamation beyond its shores proves “there is no stopping Beijing impunity in doing whatever it pleases.”
• In its position paper submitted to the tribunal, China declared “indisputable sovereignty” where it was “the first country to discover, name, explore and exploit the resources of the South China Sea Islands.”

CHINA

Dr. Wu Shicun, president and senior fellow of the National Institute for South China Sea Studies, denoted the South China Seas “a natural line of defense for Chinese national security, an important strategic waterway, and a strategic must-have for it to become a maritime power.”

Since Manila announced intentions to bring a case before the UNCLOS in 2013, Chinese officials have been public about their refusal to participate in the hearing and demanded the Philippines return to bilateral talks to resolve their core sovereignty and territorial disputes. China has until August 17 to formally respond to the tribunal on arguments presented by the Philippines.

Even though China did not appear at the jurisdiction hearing, as a party to the UNCLOS, Beijing has already granted its consent to the proceedings should the tribunal determine it has jurisdiction. In order to make its case, however, China has expressed itself through a number of formal and informal outlets:

• China’s Foreign Affairs Ministry released a “Position Paper of the Government of the People’s Republic of China on the Matter of Jurisdiction in the South China Sea Arbitration Initiated by the Republic of the Philippines” detailing why Beijing feels the arbitral tribunal lacks jurisdiction. This followed the release of a book described as serving “a kind of amicus curiae brief advancing possible legal arguments on behalf of the absent respondent.”
• Chinese Foreign Ministry spokesperson Hua Chunying declared the arbitration move a “breach” of the 2002 Declaration on the Conduct of Parties in the South China Sea, signed by China and ASEAN. This was seconded by Xinhua.
• For its part, the PCA has indicated China’s lack of participation in the hearing will not have a direct adverse impact on its deliberations nor prevent the case from moving forward. The tribunal is likely to consider China’s informal communications as it makes a determination on jurisdiction. The tribunal requested a rebuttal by the Philippine delegation to China’s informal position paper and received a 3,000-page memorial document from Manila in response.

A fleet of Chinese media outlets and commentators viewed the Philippine case as outside the arbitration tribunal’s jurisdiction since the real central issue – disputes over sovereignty claims in the South China Sea – is outside the mandate of the UNCLOS, which focuses on managing maritime activities:

• Dr. Sienho Yee, the Changjiang Professor of International Law at Wuhan University’s China Institute of Boundary and Ocean Studies, argued “it is clear the Tribunal has no jurisdiction” on territorial sovereignty disputes, military components of China’s activities, or questions of “delimitation or historic bays or titles,” issues Yee said are specifically excluded by the UNCLOS. This view was also espoused by China Daily, Xinhua and The Global Times.

Others pushed back against the specific merits of the case advanced by the Philippines:

• Shen Dingli, associate dean of the Institute of International Studies, Fudan University, reiterated China’s position that for centuries it has “claimed and exercised its sovereignty” in the now disputed waters. Since 1947, he wrote, “China presented the dashed line to again claim its sovereignty and Manila remained silent for decades ever since.” This view was also expressed by Xinhuaand Global Times.
• China Daily’s senior writer Wang Hui accused Manila of creating “waves in the troubled waters” that will eventually “erode its credibility” and force China “to take countermeasures.”
• The People’s Daily Online cited a report by the National Oceanic Administration that China’s island-building efforts were necessary to “provide high quality public maritime services” and to protect the environment.
• Foreign Ministry spokesperson Hua Chunying and Li Guoqiang at the Chinese Academy of Social Sciences sought to turn global attention back on the Philippines, characterizing their efforts to repair and resupply a grounded WWII-vintage battleship, the BRP Sierra Madre in the South China Sea, as an effort to try “legitimizing claims it has in the sea and to infuriate China.” The Global Times warned Manila that “these provocations will come at a price.”

Some criticized the involvement of Washington in Manila’s maritime dispute with China:

• China’s defense ministry hoped “the U.S. will abide by its promise not to take sides over South China Sea issues.”
• Wu Shicu wrote in China-US Focus that the United States is supporting the Philippines’s case at the UN is to maintain the advantageous China-Philippines territorial dispute, which “facilitates its rebalancing to the periphery of the South China Sea and supports its military deployments against China.” This view was backed by Shen Dingli.
• Ruan Zongze, vice-president of the China Institute of International Studies, believed the heavy involvement of western lawyers on the Philippine delegation “pointed toward a U.S. stake in the case.”
• The Global Times mocked the idea Washington could exert more than “limited influence” in the region through surveillance missions, which “would only be the illusion of small number of Americans and Filipinos.” This newspaper and Xinhuadoubted the United States would directly square off with China or else risk trade and security dilemmas.

While the arbitration is unenforceable, some analysts questioned whether a ruling against China could force Beijing to at least clarify its vague nine-dash claims:

• Ankit Panda and Prashanth Parameswaran at The Diplomat argued a Philippine victory at court might lead to Beijing issuing a “face saving explanation of the nine-dash line” to further clarify the extent of its claims within the region, though unlikely a specific delineation of the geographical boundaries of its claim.
• On the other hand, Lan Nguyen, formerly at the Diplomatic Academy of Vietnam, did not expect Beijing to expand on its views concerning the substantive, non-jurisdictional issues of the case given “China’s long-standing policy of ‘deliberate ambiguity’ surrounding its claims in the South China Sea.”

PHILIPPINES

Before arriving at The Hague, Malacañang Palace (the office of the Philippine president) was optimistic it had a “strong case” against China. The Philippines hired a senior group of western lawyers to argue its case in front of the tribunal, including Paul Reichler, a lawyer the Philippine president’s office called a “giant slayer of public international law” after his successful case on behalf of Nicaragua against the United States at the International Court of Justice (ICJ). The full delegation comprised representatives from the executive, legislative, and judiciary branches of government. The Philippines filed a 4,000-page brief in March 2014 and a 3,000-page supplemental docket in support of its case.

Without permission from China, the Philippines were unable seek a ruling at the International Court of Justice on the central sovereignty disputes. Needing to go through the PCA instead, Manila required a way to avoid the tribunal dismissing the case as outside its jurisdiction, which does not include sovereignty or territorial questions. Therefore, Manila pursued a creative strategy to indirectly challenge China’s nine-dash line territorial claims by seeking a ruling on China’s maritime activities and exclusive use of the region.

Beyond the tribunal’s ruling, the Philippine government proposed spending a record $757 million in 2016 to acquire new frigates, surveillance planes, and advanced radars to operate in the South China Sea. Before appearing before the tribunal, the Philippines have pushed for a binding Code of Conduct in the Association of Southeast Asian Nations.

Several commentators lauded the Philippine government for garnering international support on its approach:

• Presidential spokesperson Herminio Coloma said “there are additional voices supporting our move for a peaceful resolution,” citing the European Union, Australia, Japan, and ASEAN.
• In The Philippine Star, columnist Elfren Cruz noted while it initially appeared Manila “would stand alone” without even ASEAN support at the tribunal, the Philippines have now received international support. He credits the country’s president for refusing “to bow under all these pressures” and making the “China threat” an issue in the upcoming elections in the United States. The Philippine Inquirer echoed this conclusion and called the case a “boon to the Philippines” that “provides sympathetic states a more diplomatic way to find common cause with it.”
• Ma. Ceres P. Doyo, in The Philippine Inquirer was disappointed other South China Sea claimants such as Brunei, Malaysia, Vietnam, and Taiwan declined to formally join the tribunal case, but thought a Philippine “victory can be their victory against a bully.”
• On the other hand, Ana Marie Pamintuan doubted countries would “jeopardize their political survival for puny Philippines” in the face of losing a “healthy cash flow and unfettered trade” with China. Similarly, Lucio Blanco Pitlo III, a member of the Philippine Association for China Studies, predicted in China-U.S. Focus that the “minimal and unenthusiastic” ASEAN support for Manila “may lessen the perceived value attached to this regional body.”

In contrast, several media outlets and politicians openly criticized the Noynoy Administration’s rejection of China’s offer to negotiate on a bilateral basis and urged Manila to improve ties with China:

• The issue of China and maritime disputes is a primary topic in the early-2016 presidential elections in the Philippines. According to Lucio Blanco Pitlo III, many candidates including Vice President Binay and Davao City Mayor Rodrigo Duterte expressed interest in joint oil and gas exploration with China. Binay seeks broader engagement with China while Duterte pushes for a stronger indigenous military for the Philippines – as well as the return of U.S. bases – to defend against Chinese aggression.
• The Tribune lambasted President Noynoy for doing “everything the American way” resulting “in parts of the contested territories being lost to China,” who “wanted to engage in bilateral talks” before being provoked by Manila. This call for bilateral talks was seconded by The Philippine Star’s managing editor Tony Katigbak.
• Herman Tiu Laurel, Tribune columnist and former assembly candidate, doubted “a ‘victory’ by the Philippine junket team at The Hague” would “matter an iota” to China. Furthermore, he urged bilateral talks and joint ventures with China as a “win-win.”

Other commentators and media outlets focused on the role of the United States in the South China Sea:

• Ana Marie Pamintuan felt the decision by the new commander of the U.S. Pacific Fleet, Admiral Scott Swift, to spend his first overseas trip on a spy plane surveilling the South China Sea was aimed at reassuring Manila of U.S. commitment to the region. Still, Pamintuan concluded “trust in the U.S. military muscle and security commitment has been shaken” and “it’s better for us to develop our own minimum credible defense capability.”
• On the other hand, The Tribune was pessimistic on whether the case could limit China’s assertiveness, leaving Manila with no choice but to “run to the US, which it seems to be the grand plan in it all.” In another editorial, The Tribune considered Noynoy “to be starstruck by the Americans by doing its bidding through irritating China.”
• Lucio Blanco Pitlo III observed the failure of U.S. and Japan to deter Chinese aggression and island-building activities “may have serious implications in the reckoning of aspiring Philippine leaders as it showed the possible limits of what the U.S. can do for a Mutual Defense Treaty Ally.”

VIETNAM

Vietnamese envoys were in attendance at the PCA hearing. This follows Hanoi’s submission of a formal statement to the tribunal last year criticizing China’s maritime activities:

• In late-2014, Hanoi challenged China’s position paper that outlined its nine-dash line claims. Vietnamese Foreign Ministry spokesman Le Hai Binh “reiterate[d] that Vietnam has incontestable sovereignty over the Hoang Sa (Paracel) and Truong Sa (Spratly) islands.”
• Gregory Poling, an analyst at the Center for Strategic and International Studies, characterized Vietnam’s public criticism as an opportunity for Hanoi to express its dissatisfaction with Beijing but “in a way that is less provocative than Vietnam actually joining” the arbitration case. This view was echoed by Australian professor Carl Thayer.
• Nevertheless, Chinese officials immediately dismissed Vietnam’s sovereignty claims as “illegal and invalid.”

Last year, Vietnamese Prime Minister Nguyen Tan Dung said Hanoi was considering legal action of its own with the UNCLOS against Beijing over a disputed Chinese oil rig in the South China Sea:

• Dung underscored that “Vietnam will resolutely defend its sovereignty and legitimate interests because territorial sovereignty, including sovereignty of its maritime zones and islands, is sacred.”
• Rommel Banlaoi, vice president of the Philippine Association for Chinese Studies, saw Vietnam as reaching a tipping point after China provided “a pretext for key countries in Southeast Asia to unite in pushing harder for the immediate conclusion of the Code of Conduct in the South China Sea.”
• In response, Chinese officials warned Hanoi against filing legal action and criticized Dung for “distorting the facts.”

INDIA

Indian officials have indicated a preference for international arbitration to settle disputes in the South China Sea:

• Earlier this year, India’s Ambassador to the Philippines told The Manila Times that international arbitration was the most effective way to resolve the Philippine’s dispute with China, similar to India’s acceptance of the Permanent Court of Arbitration’s ruling on a dispute with Bangladesh.
• The U.S.-India joint statement during Prime Minister Narendra Modi’s visit to Washington last year raised freedom of navigation in the South China Sea as a key principle of India’s commitment to the UNCLOS.
• While at the Institute for Defense and Security Analyses (IDSA) in New Delhi in July, Philippine Foreign Secretary Evan Garcia praised India’s territorial dispute resolutions with its neighbors and urged India to “be at the head table as a partner in arms” in Manila’s case against Beijing. Garcia also welcomed India’s “expression of full understanding of the Philippines position on the South China Sea.”

Raghavendra Mishra, a research fellow at the National Maritime Foundation in New Delhi, saw the “the road ahead for [South China Sea] claimants and the court is not only uncertain but also complex.”

• Furthermore, he warned that any escalation of crisis in the South China Sea would “potentially result in system effects” due to the high volume of sea-trade and natural resources (oil, gas, and strategic minerals) in the disputed waters.

JAPAN

Despite the fact that Japan has no territorial claims in the South China Sea, Tokyo envoys attended the UNCLOS tribunal as an observer. This follows several Japanese signals of support for the Philippine case:

• Last May, Prime Minister Shinzo Abe addressed the Shangri-La Dialogue on the Japan’s interest in maintaining freedom of sea-lane and airspace navigation throughout Southeast Asia. “My government strongly supports the efforts by the Philippines calling for a resolution to the dispute in the South China Sea,” Abe said at the summit.
• In June, Japan and the Philippines signed a strategic partnership pact outlining defense equipment and technology transfers to Manila and further security dialogues.
• Also last June, Japan and the Philippines conduct joint military drills simulating search and rescue operations in the South China Sea. However, the use of an advanced Japanese surveillance plane worried China and caused experts to believe the exercises could  lead to future Japanese joint patrols in the South China Sea.
• As expected, Beijing called on Japan to stay out of the South China Sea, dismissed worries about sea-lane access, and accused Abe of portraying China as a “bully” to justify his expansive national security reforms.

The Rising Powers Initiative Policy Alert project identifies and tracks the world views of major and aspiring powers in Asia and Eurasia. RPI acknowledges support from the MacArthur Foundation for research on maritime security that contributed to this report.