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The Philippines: Renewing Prospects for Peace in Mindanao
The Philippines: Renewing Prospects for Peace in Mindanao
The Philippines' Misguided Plan to Stop South China Sea Tensions
The Philippines' Misguided Plan to Stop South China Sea Tensions
MILF rebels attend a rally in support of the peace agreement inside Camp Darapanan in Sultan Kudarat town, on southern island of Mindanao, 27 March 2014. AFP PHOTO/Ted Aljibe
Report 281 / Asia

The Philippines: Renewing Prospects for Peace in Mindanao

Hopes are high that one of the world’s longest-running civil conflicts can be resolved in the Philippines. The newly-elected president must act on his commitment to the outgoing administration’s promise of autonomy for the southern Bangsamoro (Muslim Nation) population. Failure to do so risks more lawlessness or reigniting the insurgency.

Executive Summary

The southern Philippines is potentially closer to peace than at any time in the four decades since Muslim insurgents started fighting for independence, but the substantial progress over the past six years is also fragile. President Rodrigo Duterte, who took office on 30 June, needs to build quickly on the foundations laid by President Benigno Aquino’s administration or the process risks collapsing. Duterte has suggested a new enabling law could be drafted by an ad hoc convention that brings together members of different southern ethnic, religious and political groups. The idea has some advantages, but not at the cost of prolonged delay. The greatest danger to peace is that the restive south, sceptical after watching at least three other agreements founder, will lose faith in the process and return to guerrilla warfare or tip deeper into lawlessness. The most effective way of avoiding these dangers is for the new government to pass enabling legislation quickly that delivers at least as much autonomy as was promised by the outgoing administration.

At the beginning of 2015, the government and the Moro Islamic Liberation Front (MILF) seemed on the brink of an historic peace to end a conflict in which more than 120,000 people have died. After years of neglect, factionalism and talks in bad faith, Aquino’s government and MILF leaders had broadly agreed on a package that would grant the five southern provinces, collectively called Bangsamoro (Muslim Nation), a large degree of political and financial autonomy in return for the MILF disarming and dropping independence demands. The Framework Agreement on Bangsamoro in October 2012, followed by the Comprehensive Agreement on Bangsamoro (CAB) in March 2014, laid out the architecture, but finalisation was contingent on Congress approving the enabling legislation before Aquino’s term ended. That did not happen, the result of a bungled police operation and politicking ahead of the May 2016 elections. 

Duterte, the mayor of the southern city of Davao who won that election, was one of the peace deal’s most vocal supporters during the campaign. Though he has said he favours autonomy for Bangsamoro, all indications are that he will not follow the same route as the previous administration to deliver it. It is unclear whether he envisages the settlement for the south as an advance model for his broader plans of national federalisation or as an integral part of them. A long delay, or an autonomy bill that delivers less than the CAB’s promises, risks alienating key sections of the Bangsamoro population. A particular danger is that young people, disillusioned by failure of political negotiations, would seek alternatives, such as joining one of the militant groups waiting in the wings or turning to anarchic criminality.

There was no contingency plan for failure to pass the bill under Aquino, and by law the new government must start the process of drafting and approving legislation over. While doing so, it needs to put in place measures to preserve the gains of the previous administration and make significant good-will gestures fast to boost damaged confidence in the deal. Both sides need to prepare for the coming autonomy. The MILF leadership has invested most of its political capital in the negotiations and to maintain its credibility has to be able to show that the new administration will continue it in good faith. A number of interlocutors within the process and outside suggest the government should boost confidence through increased development assistance to local bodies in the south.

The south is ill-prepared for autonomy. Although the delay presents a threat to the process, it is also an opportunity. It allows the MILF and other groups, such as the Moro National Liberation Front (MNLF), time to transition from guerrilla organisations to political parties; create an inclusive political platform bringing together Mindanao’s disparate population; and convince sceptics within their own communities to support social change for a lasting peace.

Mindanao’s peace process has been innovative: it includes an International Contact Group to coordinate outside support and, at least on paper, commitment to involve women, minorities, and civil society during the negotiation and implementation of agreements. International partners, in particular Malaysia and the member states of the European Union (EU), have been a vital, constructive force in the peace process, facilitating and assisting as needed, but resisting the temptation to insert themselves so far into the mechanism as to detract from its essentially home-grown nature. Foreign governments, diplomatic missions and NGOs should now help escort the process through the delay, publicly supporting measures such as development aid and education programs, while impressing upon Manila’s political elite that Congress needs to build on the achievements of the previous administration.

Failure to pass an acceptable autonomy law would risk exacerbating disenchantment with negotiated change, fuelling criminality and facilitating religious radicalisation. Global jihadist movements like Islamic State (IS) have shown a clear ability to exploit social disorder in Muslim communities elsewhere to gain new recruits and have already gained some adherents among smaller and more opportunistic rebel groups in Mindanao.

Years of negative national media coverage of Muslim aspirations have had a harmful impact on how the rest of the Philippines views southern autonomy. The new government under Duterte must remember that ignoring or derailing the existing process would lead not to a return to the status quo ante but to an unpredictable, potentially much more violent future.

Recommendations

To maintain the momentum of the peace process

To the Philippines authorities: 

  1. Use the 2014 Comprehensive Agreement on Bangsamoro (CAB) as the basis of any future process. 
     
  2. Expedite the passage of enabling legislation to create a CAB-compliant autonomous region in Mindanao.
     
  3. Ensure strong coordination with Mindanao-based security forces to avoid confidence-shaking clashes.
     
  4. Use high-profile developmental and social investments, funnelled through local groups, to show goodwill, with a focus on infrastructure, education and health. 
     
  5. Develop a public communication strategy to prepare the rest of the country for Bangsamoro autonomy.
     
  6. Establish a National Transitional Justice and Reconciliation Commission on Bangsamoro to deal with past injustices.

To the MILF:

  1. Continue to show flexibility in negotiations with the new government on how autonomy is going to be delivered.
     
  2. Reach out to non-Muslim constituencies, particularly Christian and indigenous groups, to ensure they do not feel threatened by the prospect of living in an autonomous Bangsamoro.

To the MNLF:

  1. Do not attempt to renegotiate the CAB from scratch.

To international partners and donors: 

  1. Focus financial, programmatic and monitoring support on three main areas: governance and capacity building, strategic communications and peace diplomacy, and justice and rule of law.
     
  2. Establish in coordination with various levels of government and the MILF a multi-donor normalisation trust fund to help pay for the transition.
     
  3. Help facilitate inward investment in Bangsamoro to boost the local economy through jobs and commerce.

To prepare for autonomy

To the Philippines authorities:

  1. Ensure that MILF fighters who agree to demobilise get their full socio-economic assistance package, so as to encourage other fighters to follow. 
     
  2. Extend the offer of amnesty and a demobilisation package to fighters of other once-secessionist groups, including the MNLF.

To the MILF:

  1. Broaden the political base of its political vehicle, the United Bangsamoro Justice Party (UBJP), to give a greater voice to women, young people, Christians and members of the Lumad indigenous group.
     
  2. Help build capacity for governance in Bangsamoro by identifying and nurturing talent across all ethnic, social and religious groups and genders, and seeking assistance and advice as necessary.

To international partners and donors: 

  1. Focus on boosting the technical capacity of the Bangsamoro bureaucracy, with specific emphasis on new areas of governance they will inherit with autonomy, including taxation and fiscal governance, investment policy, and land management.

Manila/Brussels, 6 July 2016

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

Former Senior Analyst, China
YanmeiXie
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Adam Lee
PhD candidate at Johns Hopkins University’s School of Advanced International Studies