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The Philippines' Misguided Plan to Stop South China Sea Tensions
The Philippines' Misguided Plan to Stop South China Sea Tensions
Philippines: Addressing Islamist Militancy after the Battle for Marawi
Philippines: Addressing Islamist Militancy after the Battle for Marawi
Op-Ed / Asia

The Philippines' Misguided Plan to Stop South China Sea Tensions

Originally published in The National Interest

Cooperating on oil won't work - but fishing might.

Former Philippine president Fidel Ramos was in Hong Kong earlier this month to meet his “old friends” in hopes of breaking ice with Beijing. In a statement issued Thursday, Ramos and his interlocutors, including prominent Chinese diplomat Fu Ying, said they discussed the way forward “in the spirit of universal brotherhood and sisterhood for peace and cooperation between the two countries.”

In the geopolitical equivalent of David versus Goliath, China was legally thrashed by the Philippines last month in an international arbitration over their disputes in the South China Sea. In the aftermath, both are showing desires to mend fences. The parties, however, will squander the opening if they keep circling around the tried-and-failed idea of joint development of energy.

Minutes after a tribunal under the Permanent Court of Arbitration ruled against a raft of Chinese maritime claims and activities, China issued a statement denouncing the Philippines, the tribunal and its ruling, but also said it was willing to “make every effort to reach transitional arrangements, including conducting joint development in relevant waters.”

Manila had already signaled interest. A few days before the tribunal ruled, Foreign Minister Perfecto Yasay said the Philippines wanted talks with Beijing to see how “we can utilize and benefit mutually from the utilization of the resources.”

First raised by Deng Xiaoping and repeated by subsequent Chinese leaders, joint development has become Beijing’s reflex response to its acrimonious maritime relations. Desperate for energy and incapable of developing it alone, Manila has long hung its hopes on Chinese partnership. The ruling may have rekindled the political will to collaborate, but has also legally snuffed out the prospect.

In a direct rebuke to the most controversial and sweeping component of China’s claims, the tribunal declared 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 line, also known as the U-shaped line or the cow’s tongue, swoops down from China’s coast to take in most of the South China Sea. It slices into the Exclusive Economic Zone (EEZ) claimed by the Philippines, as well as into those by Brunei, Indonesia, Malaysia and Vietnam. China has not specified the line’s coordinates, nor articulated exactly what it is claiming within it, but its actions—evicting other claimants’ oil and gas surveillance vessels and shielding Chinese fishermen from other coastal states’ law enforcement—suggest it asserts entitlement to natural resources within it.

The Tribunal also ruled that none of the land features in the Spratly chain, off the Philippine coast and a few hundred nautical miles from China, are legally “islands.” That means no country, China included, can legally claim an EEZ, which extends two hundred nautical miles outward and comes with exclusive rights to resources.

The ruling dramatically shrinks the scope of maritime zones that China can lawfully claim and leaves little chance that they overlap with the Philippine EEZ. The two sides are now hard-pressed to define a suitably disputed area with promising hydrocarbon prospects to collaborate in.

The Philippines’ Hunger for Energy

The Philippines may indeed be hungry enough for energy that it would consider trading off sovereign rights for Chinese capital, technology and freedom from harassment. The country imports more than 90 percent of its crude oil and petroleum products. Its only natural gas field is expected to run dry within the next fifteen years, while demand is projected to rise.

Manila has neither the funds nor the technical capacity to develop new energy sources in the South China Sea without foreign partnership. The only sizable commercial-grade natural gas reserves are on the Reed Bank, which Manila claims as part of its EEZ but which is within Beijing’s nine-dash line. International conglomerates have stayed away for fear of offending China.

Until the recent ruling, Manila’s only hope for developing the Reed Bank has been linking hands with China, and there has been no lack of effort. In 2003, the Philippines was short on options after failing to attract international investors to develop indigenous hydrocarbon resources. “We imported almost 99.9 per cent of crude oil and petroleum products. It was . . . the era of $100 per barrel of oil. We wanted indigenous oil but couldn’t explore ourselves in our backyard,” lamented Eduardo Manalac, then Philippine National Oil Company (PNOC) president and CEO and energy undersecretary.

Formerly a senior executive at Phillips Petroleum, Manalac had developed friendship with counterparts at China National Offshore Oil Corporation (CNOOC). “My instinct was, why can’t I ask these guys to help out with joint development? So I presented this to the [Philippine] president, and she enthusiastically approved.”

At the time, then president Gloria Macapagal Arroyo was presiding over a “golden age” of Sino-Philippine relations underwritten by generous Chinese infrastructure loans. During her 2004 state visit to Beijing, PNOC and CNOOC signed an agreement to collaborate on seismic surveys of the disputed waters. The agreement evaded sovereignty concerns by stating that it would “not undermine the basic position held by the Government of each Party on the South China Sea issue.”

The area covered by the bilateral agreement ended up overlapping with Vietnam’s claims. After six months of strong objection, Hanoi reluctantly joined the deal. The ambitious project covered an area of 143,000 square kilometers.

Under the tripartite agreement, CNOOC collected data that was processed in Vietnam and subsequently brought to the Philippines for interpretation. The parties performed their jobs dutifully and developed cordial working relations, and initial analysis turned up promising results for commercially recoverable deposits. They were, however, soon to encounter a debilitating backlash.

In late 2007, a Manila press conference was held to publicize the surveys. “It was then the media asked about the location of the area, and the controversy began,” said Guillermo Balce, then energy undersecretary. Though the size of the area had initially been made public, its location had remained confidential. Press articles, especially one in the Far Eastern Economic Review, revealed details of the deal, including its location. The author alleged the Philippines had “made breathtaking concessions in agreeing to the area for study,” and “about one-sixth of the entire area, closest to the Philippine coastline, is outside the claims by China and Vietnam.”

Around the same time, sentiment was turning against Arroyo and Chinese investments. The president and her husband were accused of corruption in a $329 million telecommunications deal with a Chinese company. Revelations about the joint exploration deal further energized her critics. Opposition lawmakers filed resolutions seeking probes into whether the administration had compromised sovereignty and sold out national territory for an $8 billion loan package. Some urged impeachment.

Opponents also challenged the project’s constitutionality. Under the Philippine constitution and the Oil and Gas Exploration and Development Act, Philippine entities must own at least 60 percent of the capital of a natural resource project in Philippines waters and the government must retain at least 60 percent of the net profit. Collectively, they are known as the 60/40 rule, which the tripartite agreement—with cost split evenly three ways—did not appear to meet. The Supreme Court was petitioned in May 2008 to nullify the agreement.

Besieged by legal challenges and political troubles, the Arroyo administration let the joint exploration agreement expire on July 1, 2008, despite China’s and Vietnam’s desire to renew.

Another attempt at Sino-Philippine cooperation also miscarried. In May 2012, Philex Petroleum—a private Philippine company and majority shareholder of Forum Energy—approached CNOOC and offered it an investor role in a block on the Reed Bank. CNOOC reportedly responded “positively,” yet ultimately declined, as its participation would have to follow the 60/40 rule and could be interpreted as recognizing Philippine sovereignty. Talks have continued on and off, most recently in July 2014, but without agreement.

Pro-business members of the Philippine Congress have introduced bills to loosen the 60/40 rule but failed to gain traction.

If Manila were to now propose joint development on the Reed Bank on Chinese terms—even split of ownership and profit—it would be conceding sovereign rights to an area that China has no legitimate claim to. President Rodrigo Duterte may be willing to fudge some of the issues, but such a deal would be politically perilous and legally vulnerable. Beijing could not sign off on a deal involving a Chinese company participating as a minority shareholder, because it would be seen as retreating from its own claim and risking nationalist rage.

It remains to be seen how Beijing might react were Manila to reopen blocks in the disputed waters for international bidding, but the prospect for China and the Philippines to jointly develop hydrocarbon resources in the South China Sea, for now at least, is dim. It is time to give up wishful thinking and base cooperation on reality.

Fishing for Cooperation

The tribunal has left space and hope for the parties to share and jointly manage fisheries. Fish stocks may be less glamourous than hydrocarbons, but they are more strategically important from two perspectives: disagreements over fishing rights have led to most of the clashes in the area, and a collapse in stocks from overfishing would present an existential threat to many of the claimant governments—some 210 million people in the countries surrounding the South China Sea are estimated to depend on fishing and its associated industries for their food and livelihood.

The ruling states that both Filipino and Chinese fishermen have the right to pursue their traditional livelihoods in the surrounding territorial waters—a twelve-nautical-mile band—of the Scarborough Shoal, regardless of its sovereignty. Before Beijing sealed off the area during a two-month standoff in 2012, the waters had long been accessible to fishermen of both countries. With the ruling, China could reopen the waters to Filipino fishermen without detracting from its sovereign claims. This restoration of the status quo ante would ease tensions at little cost to Beijing.

In addition, in ruling that no land feature in the Spratly group qualifies as natural islands capable of generating EEZs, the tribunal has classified a sizable swath of the waters there as “high seas” in which all states enjoy “freedom of fishing.” That leaves space for all claimants to jointly manage fisheries.

Overfishing and ruinous fishing practices are devastating the South China Sea’s fish stocks, which “have fallen 70% to 95% from 1950s levels, according to researchers at the University of British Columbia” as cited in the Wall Street Journal. Cooperation in sustainable fishing would not only build trust, but also help ensure the sustainability of a vital source of food and income. If the South China Seas fisheries continue to be unregulated and unmanaged, the fish stocks could drop “by as much as an additional 59% from 2015 levels in the next 20 years.”

Contributing to a sustainable fishing regime would help China salvage its reputation. The tribunal ruled that China had failed to prevent its fishermen from using fishing practices that destroy the environment and poaching endangered species. China can establish itself as a guardian of the marine environment and biology by participating in or even leading cooperation on sustainable fishing and enforcement against illegal activities.

The tribunal’s ruling provided legal clarity. The attendant international attention lit a fire under China’s seat to show goodwill and reduces the daunting power asymmetry that faces the Philippines. An opportunity for collaboration is presented—in fishing, not drilling.

Contributors

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A tattered Philippine flag is seen near ruined houses, after battle between government troops and Islamic State militants, at the Islamic city of Marawi, Philippines April 19, 2018. REUTERS/Erik De Castro
Commentary / Asia

Philippines: Addressing Islamist Militancy after the Battle for Marawi

The Philippine city of Marawi, on Mindanao island, remains in ruins more than a year after a five-month jihadist takeover. To avoid fuelling militancy, Manila must involve locals in reconstruction, implement a 2014 deal with Mindanao separatists and go beyond efforts to counter jihadist ideology.

In May 2017, Muslim militants acting in the name of the Islamic State (ISIS) seized Marawi, a lakeside economic hub in the Lanao del Sur province of Mindanao, the second-largest island in the Philippines. It took the Filipino military five months to regain control of the city. Now, more than a year after the siege began, Philippines President Rodrigo Duterte’s administration in Manila appears overwhelmed by the task of reconstructing the destroyed city.

Manila faces significant challenge in restoring its writ, enabling the 200,000 civilians displaced by the fighting to return home and, more broadly, preventing a militant resurgence in Mindanao. Thus far, the government has tended to view jihadism in the archipelago as mostly ideologically motivated. Its policies, as a result, focus mostly on promoting counter-narratives, often through hand-picked local religious leaders who typically lack local legitimacy. In reality, jihadism’s roots lie in decades of separatist insurgency and dysfunctional local politics. Carrying out the provisions of a 2014 peace deal between the government and the Moro Islamic Liberation Front (MILF), the largest armed group on Mindanao, would better suck the oxygen from jihadists than attempts to counter their ideology. Manila also should involve local communities in reconstruction, so those efforts do not fuel anger at the state.

Muslim Mindanao

Muslims are a minority in the Philippines, making up about 11 per cent of the population. On Mindanao, however, that proportion rises to roughly 23 per cent. In 1989 the government formed the Autonomous Region in Muslim Mindanao with Lanao del Sur and three other provinces. This west-central part of the island has a rich Islamic heritage, embodied by Marawi with its concentration of historic mosques. When, in 1980, the city council designated Marawi an “Islamic city”, many of the city’s inhabitants saw that step as a welcome acknowledgement of this history. Now the city centre, including the Marawi Grand Mosque, has been reduced to rubble and is littered with unexploded ordnance, preventing the displaced from returning. Manila’s vision of reconstruction is a showcase of promenades and resorts built by a China-led consortium in the ruined commercial district.

The struggle to retake Marawi was the largest urban engagement for the Philippines armed forces since the Battle of Manila during World War II. The Maute Group, a jihadist group hailing from Lanao del Sur seized the city in an operation ISIS propagandists likened to the capture of Mosul in Iraq. It remains unclear how much operational guidance the Maute Group received from the ISIS core in Iraq and Syria during the battle. Open source evidence showed the Maute leaders, brothers Omar and Abdullah Maute, calling the shots during the final stages of attack planning.

This group of largely college-aged and, in some cases, particularly among the leadership, college-going militants held the city for months, thanks to a combination of local knowledge and planning capacity, funds generated locally and abroad, the arrival of dozens of foreign fighters and propaganda support from ISIS-linked media. The militant’s infiltration of the city before they seized it suggested the presence of sympathisers among Marawi’s inhabitants. Disenfranchised youth frustrated with the protracted Mindanao peace process and local clans who take an adversarial stance toward Manila-imposed policies provided a permissive environment for the Maute Group.

The protracted battle to oust the group highlighted limitations within the Philippines security forces in information gathering and urban warfare. These weaknesses, in turn, result at least partly from Manila’s struggle to adapt to the growing threat posed by jihadist cells adept at decentralised operations, after years fighting more hierarchical Mindanao secessionist groups whose structure emulates conventional military forces.

Jihadism in Mindanao should be understood against the backdrop of the 40-year Moro separatist conflict that has killed more than 120,000 people and displaced millions, and faltering efforts to find a political solution to that conflict. In 2014, the Philippine government and the MILF signed a peace deal – the Comprehensive Agreement on Bangsamoro – which pledged increased political autonomy, more equitable resource sharing and the demobilisation of former secessionists.

The Maute Group appears to have recruited former MILF fighters and has ties to armed factions previously aligned with the MILF.

Since then, however, the agreement’s implementation has faltered due to factionalism among militant groups, objections from some legislators to the autonomy it envisaged for Muslim Mindanao and breaches of a ceasefire between the Philippines and the MILF. Prior to the Marawi siege, MILF commanders had warned that the longer the peace process remained mired in the legislature, the more receptive their junior cadres could grow to ISIS propaganda. Indeed, the Maute Group appears to have recruited former MILF fighters and has ties to armed factions previously aligned with the MILF.

Implementing the Bangsamoro deal is thus essential to efforts to curtail the influence and spread of jihadism, as well as the MILF’s splintering or return to combat. On 31 May, after an almost three-year delay, the Philippine legislature approved the bill that would enact a future Bangsamoro Basic Law, the most important component of the 2014 deal. Once signed into law by President Duterte, the bill would allow for the creation of a “new, political entity” – called Bangsamoro – in Mindanao to replace the existing Autonomous Region. This would address the MILF’s demands for self-rule and for Bangsamoro to benefit from a share of the wealth from Mindanao’s natural resources. Government surveys estimate natural gas reserves in the Liguasan Marsh at 68 billion cubic feet, leading some Maguindanao politicians to refer to the province as the “next Dubai”.

President Duterte is expected to sign the bill this month, which should check the growing impatience of younger MILF commanders. But while autonomy for Bangsamoro will be a good start, Manila also needs to rethink some of its core assumptions about what drives many Muslim Filipinos to militancy.

Domestic Roots of Mindanao Militancy

In the case of the Marawi takeover some observers solely attribute the Maute Group’s ability to occupy the city and then withstand the siege through foreign cash and fighters. Certainly foreign funds and the apparent reinforcement of the group’s ranks with seasoned fighters from abroad seem to have helped. But the full story is more complex. Mindanao’s jihadist milieu has its origins in local clan and electoral politics, as well as the grey economies that sustain militants such as the Maute Group.

Prior to pledging allegiance to ISIS, the Maute Group was in effect a private militia for the eponymous clan headed by matriarch Farhana Maute, intimidating other clans that contested in local elections in the province. It used coercion to mobilise votes and extort contractors involved in public works projects. This provided the group with experience in purveying violence that would prove useful during the Marawi siege. In 2016, after candidates backed by Farhana suffered losses, the Maute Group appeared to adopt ISIS-related imagery, less because of any particular affinity for ISIS’s ideology than to burnish its fading image as a tough enforcer. It also began to attract former fighters from MILF, especially younger members who felt that the peace process with Manila was taking too long.

In the past, other militants in Mindanao have similarly deployed jihadist rhetoric to promote a more ferocious image. Best known is the Abu Sayyaf Group, formed in the early 1990s by Abdurajak Janjalani, a Filipino veteran of the anti-Soviet mujahidin in Afghanistan. After Janjalani’s death in a 2006 police raid, the Abu Sayyaf Group became infamous for kidnapping-for-ransom activities under the guise of jihad. Kidnapping for ransom is a lucrative supplement to communities that would otherwise derive their incomes from fishing and subsistence farming. The lack of law enforcement and the challenging agricultural environment in western Mindanao incentivise kidnapping.

Abu Sayyaf leaders have long been connected to jihadist movements elsewhere. In its early years, the group’s leaders enjoyed al-Qaeda links and the global movement provided seed funding for attacks in the Philippines. Since mid-2014, Abu Sayyaf factions, particularly in the western Mindanao province of Sulu, have used ISIS-associated iconography such as black flags, apparently in part to extract larger ransoms from foreign governments.

Involvement in jihadist militancy is often the result of a vocational decision within a family or a village, rather than an individual’s epiphany.

Factors that motivate people to join Mindanao’s jihadist groups are complex. While ideology undoubtedly plays some role, motives among those in outfits like the Maute Group tend to be more material. As described, some local militias adopt the ISIS brand to intimidate rivals or project greater ferocity. Among the rank and file, involvement in jihadist militancy is often the result of a vocational decision within a family or a village, rather than an individual’s epiphany. Not a single Filipino Muslim has attempted a suicide bombing in nearly five decades of insurgency in Mindanao. The rewards in the afterlife promised by jihadist ideology have yet to trump the real-world needs of militants and their kin.

Nor have local jihadist groups produced ideological texts that indigenise the global jihadist movement. Compare this to the prolific writings of other non-state armed groups in the Philippines, such as the Communist Party of the Philippines and its New People’s Army, which outline what form locally-rooted communism might take. Or compare it to jihadists in Indonesia, who have long produced original vernacular material in various formats including books, pamphlets and DVDs. No such material exists in the Philippines.

Thus far, Manila has not invested seriously in understanding the origins of jihadism in Mindanao. Since the election of President Duterte, the Filipino policy response has veered from military operations to policies framed through the lens of “countering violent extremism” (CVE) – mostly involving efforts to counter jihadist propaganda and indoctrination – despite the absence of a national policy that defines “violent extremism”. CVE framing tends to reduce the complex interaction of political and socio-economic factors that underpin Mindanao’s ongoing conflict to the single cause of jihadist ideology.

The dominance of CVE discourse is likely to render Manila’s policy in Mindanao ineffective. The government’s effort to promote Muslim clerics it views as “moderate”, for example, may further alienate a populace that derides them as mere mouthpieces. Strategic communications campaigns to counter extremist content on social media do not resolve the real-world issues such as dysfunctional politics and economic deprivation that jihadists tap to win recruits.

Aftermath

In the shattered city of Marawi, civil society and neighbourhood collectives eye Manila’s reconstruction plans warily. Many fear that reconstruction, which will most likely be carried out by a Chinese-led consortium, may mean permanent exile for the displaced.

The Duterte administration has declared it wants to build a “new Marawi”, which includes plans for transforming the battle area into an “economic zone”, though precisely what this would entail remains unclear. Its plans appear to ignore the murkiness of land ownership in the city, where competing deeds and informal property claims have sparked periodic clan and family disputes for decades. Many residents of the area that saw the worst destruction, known as the “most affected area”, do not have deeds to their houses, many of which now lie in ruins. They may lose the right to rebuild their homes, while potentially receiving no compensation from the government. Manila cannot solve the problem by paving it over.

Mishandling Marawi’s reconstruction, notably by carrying it out in a manner than angers inhabitants, also risks amplifying the idea, pushed by the Maute Group and its allies, that Islam is under attack in Mindanao. A botched reconstruction could also impugn the autonomy-centric political stance of mainstream groups such as the MILF, potentially driving more of its younger members toward jihadism.

Locals take considerable pride in the city’s heritage as the centre of Islamic education in Mindanao. Should the government disregard that sentiment – and proceed with plans to gentrify the city centre in order to lure tourists – it could further alienate inhabitants of the city from the state. It also could entrench the sentiment of some influential clans that deployment of state security forces in the city was tantamount to foreign occupation. This, in turn, would play into the hands of Maute Group remnants or other violent rejectionist movements that may emerge.

Instead, Manila should enhance measures to involve Marawi’s inhabitants in its reconstruction. Substantial local input would signal a deeper commitment by the central government to Mindanao’s autonomy, even beyond the provisions of the Bangsamoro Basic Law, which itself should be enacted without delay. The Bangon Marawi (Rise Marawi) inter-agency task force supervising reconstruction should become an active partner of affected residents, rather than simply promoting the Chinese-backed plan.

Meanwhile, the Duterte administration should avoid pronouncements that cast Mindanao militants as “desperate” individuals driven to crime or hardcore terrorists who should be “eaten”. The Filipino security forces should instead refocus on intelligence analysis and build on their experience of peacebuilding, gained while the MILF was still in negotiations with the Philippine government. Nor should those officials who spearhead CVE policies pick which community or religious leaders will represent Marawi or Mindanao. Rather, they should focus on addressing the grievances that jihadist movements exploit, thus empowering individuals and communities that promote peace and support a political solution to the Mindanao conflict.

The jihadist takeover of Marawi, with the Maute Group able to leverage frustration at the gaps in governance and stalled peace process, was a jarring reminder to Manila of the depth of Muslim grievances in Mindanao. What started as militants’ tactical use of ISIS iconography ended in a protracted siege that brought into question the Philippines’ ability to attain peace in Mindanao. The government should take a holistic view of the drivers of conflict, being careful not to lose sight of those that predate the emergence of jihadist cells, notably the demands of many Muslims in Mindanao for a greater say in running their own affairs and reaping the benefits of the region’s natural resources. The Maute Group, for now, appears weakened, but if Manila mishandles the aftermath of the battle for Marawi and the reconstruction of that city, similar forces could easily arise in the years to come.

Joseph Franco, Research Fellow with the Centre of Excellence for National Security, helped with research and preparation of this commentary as a Crisis Group consultant.