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Landmark South China Sea Ruling Could Revive Negotiations
Landmark South China Sea Ruling Could Revive Negotiations
A Filipino fisherman sits on the hull of his boat after arriving from Scarborough Shoal, 10 May 2012. REUTERS/ERIK DE CASTRO
Commentary / Asia

Landmark South China Sea Ruling Could Revive Negotiations

An international tribunal has issued a sweeping ruling against China in a landmark case brought by the Philippines over disputed claims in the South China Sea. Beijing rejected the ruling, but the judgment’s legal clarity could ultimately provide the basis of a better, durable, negotiated outcome for the many parties involved.

The most significant part of the 12 July award by the International Tribunal on the Law of the Sea under the Permanent Court of Arbitration in The Hague is the judgment that “there was no legal basis for China to claim historic rights to resources within the sea areas falling within the ‘nine-dash line’ ”. The decision delivers an unequivocal rebuke to the most controversial component of China’s claims.

The Nine-Dash Line, which appears on official Chinese maps, includes most of the South China Sea and slices into the Exclusive Economic Zone (EEZ) claimed by the Philippines – as well as into those claimed by Brunei, Indonesia, Malaysia and Vietnam. The Tribunal said Beijing had forfeited those rights when it signed the United Nations Convention on the Law of the Sea (UNCLOS). The Tribunal also ruled that none of the features in the Spratly chain are legally “islands”, and so do not generate EEZ entitlements. The two decisions combined will significantly limit the size of the maritime zone and scope of maritime rights that China can legally claim.

China’s Nine-Dash Line covers most of the South China Sea. CRISIS GROUP

Following from this, the Tribunal ruled that China has violated the Philippines’ sovereign rights in its EEZ by interfering with Philippine fishing and petroleum exploration, constructing artificial islands and failing to prevent Chinese fishermen from fishing in the area.

Arguably even more negative for China’s international reputation is the Tribunal’s ruling that Chinese activities have severely harmed marine ecology and the environment by destroying coral reefs and failing to prevent the harvesting of endangered species.

China repeated its refusal to accept or comply with the ruling. It also restated its claims in the South China Sea, including land features, internal waters, territorial sea, contiguous zone, exclusive economic zone, continental shelf and historic rights. Early signals indicate that China does not plan to retreat from claiming historic rights within the Nine-Dash Line, which likely include entitlement to fisheries and hydrocarbon resources. Its claim to internal waters suggests China may consider drawing a baseline around the entirety of the Spratly island chain, claiming internal waters within the baseline and maritime entitlement outward from it, despite the Tribunal’s decision that “the Spratly Islands cannot generate maritime zones collectively as a unit.”

While the ruling is likely to provoke heated rhetoric in the short term, it could ultimately help reverse recent trends toward confrontation. Despite Beijing’s public rejection, the ruling is binding on China and the Philippines. The process could set an example for other claimants to follow and thus provide incentive for China to negotiate. By providing greater legal clarity and generating international attention, it could reduce the asymmetry between China and other claimants in negotiations.

To mitigate the damage to its reputation and demonstrate respect for international law, China could take some incremental and face-saving steps towards compliance. It could reopen Scarborough Shoal to Filipino fishermen; stop interference with fishing and exploration activities by other claimants in their lawful EEZs; and prevent its fishermen from poaching endangered species.

Finally, it could make substantive progress on formulating a code of conduct with the Association of Southeast Asian Nations. This would commit all parties to binding norms of behaviour, reduce the risk for clashes and restore South East Asia’s faith in China’s pledge for peace and cooperation.

Report 223 / Asia

Stirring up the South China Sea (I)

China is one of its own worst enemies in the South China Sea, as its local governments and agencies struggle for power and money, inflaming tensions with its neighbours, illustrated by Beijing’s latest standoff with the Philippines.

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Executive Summary

The conflicting mandates and lack of coordination among Chinese government agencies, many of which strive to increase their power and budget, have stoked tensions in the South China Sea. Repeated proposals to establish a more centralised mechanism have foundered while the only agency with a coordinating mandate, the foreign ministry, does not have the authority or resources to manage other actors. The Chinese navy’s use of maritime tensions to justify its modernisation, and nationalist sentiment around territorial claims, further compound the problem. But more immediate conflict risks lie in the growing number of law enforcement and paramilitary vessels playing an increasing role in disputed territories without a clear legal framework. They have been involved in most of the recent incidents, including the prolonged standoff between China and the Philippines in April 2012 in Scarborough Reef. Any future solution to the South China Sea disputes will require a consistent policy from China executed uniformly throughout the different levels of government along with the authority to enforce it.

China’s maritime policy circles use the term “Nine dragons stirring up the sea” to describe the lack of coordination among the various government agencies involved in the South China Sea. Most of them have traditionally been domestic policy actors with little experience in foreign affairs. While some agencies act aggressively to compete with one another for greater portions of the budget pie, others (primarily local governments) attempt to expand their economic activities in disputed areas due to their single-minded focus on economic growth. Yet despite the domestic nature of their motivations, the implications of their activities are increasingly international. Other factors – both internal and external to China – have also been responsible for increasing tensions, but they are beyond the scope of this study. Regional dynamics, including arms build-ups, competition for resources and increasing nationalist sentiment in other claimant countries are the subject of a separate report.

Effective coordination of actors is also hampered by a lack of clarity over precisely what is supposed to be defended. China has yet to publicly clarify the legal status of the so-called nine-dashed line that appears on most Chinese maps, encompassing most of the South China Sea. While the foreign ministry has taken steps to try to reassure its neighbours that Beijing does not claim the entire South China Sea and has at least partially justified its claims on the basis of the United Nations Convention on the Law of the Sea (UNCLOS), the government cannot easily back down from claims to significant portions of the sea that are based on historical presence in the region. Local government agencies take advantage of this lack of legal clarity when engaging in activities in disputed areas.

Beijing has deliberately imbued the South China Sea disputes with nationalist sentiment by perpetually highlighting China’s historical claims. This policy has led to a growing domestic demand for assertive action. While Beijing has been able to rein in nationalist sentiment over the South China Sea when it adopts a specific policy, this heated environment still limits its policy options and its ability to manage the issue.

In mid-2011, as tensions in the sea led to neighbouring countries seeking closer military ties with the U.S., China adopted a less assertive approach. While Beijing’s overall emphasis on maintaining the status quo still includes a preference for bilateral negotiations, it is strengthening regional relations through high-level visits and multilateral engagement by signing with the Association of South East Asian Nations (ASEAN) the Guidelines for the Implementation of the Declaration of Conduct (DOC) in the South China Sea.

Internally, China has taken measures to calm nationalist sentiment and discourage aggressive actions by local agencies. However, China’s current approach remains characterised by numerous ministerial-level actors and law enforcement agencies with no effective coordinating authority and no high-level long-term policy. While repeated and failed attempts to establish a centralised mechanism on maritime management show a lack of political will to address the coordination issue, Beijing might also see benefit in ambiguity. As long as this situation exists, however, its new conciliatory approach is unlikely to be sustainable. Ultimately, the ability to manage relations in the South China Sea and resolve disputes will present a major test of China’s peaceful rise.

Beijing/Brussels, 23 April 2012