Thayer Consultancy Background Briefing:

ABN # 65 648 097 123

The South China Sea Arbitral
Award Three Years Later
Carlyle A. Thayer
July 14, 2019

We are working on a review of the Arbitral Tribunal’s Award in The Hague three years
ago up to the present when China appears to be flexing its muscles at Vietnam’s
Vanguard Bank. We request your assessment of the following issues:
Q1: Has The Hague ruling changed China’s behavior in the South China Sea in the past
three years since the Award? What has China gained in terms of militarizing its
artificial islands?
ANSWER: The Award by the Arbitral Tribunal in the case brought by the Philippines
against China was not subject to appeal and under international law China should have
complied with the Award immediately.
After the Award was issued, the Chinese government and its media organs criticized
the Arbitral Tribunal and dismissed the Award. Since then China has not referred to
the Award by name. China has justified its claims to features and adjacent waters in
the South China Sea on the grounds of historical rights but without direct reference to
its “nine-dash line” claim. In Beijing’s view the Award is a dead letter.
The Washington-based Center for Strategic and International Studies’ Asia Maritime
Transparency Initiative issued an Arbitration Compliance Report Card. This report
concluded that “China is in compliance with just 2 of 11 parts of the ruling” with a
third part ambiguous. While well meaning, this report is irrelevant because the
Arbitral Award has had no impact on China’s behavior in the South China Sea. For
example, the Arbitral Tribunal ruled that two of China’s artificial islands were low tide
elevations and were not subject to appropriation. China continues to defy the Award
by illegally occupying these features (Subi and Mischief reefs) that belong to the
Philippines.
China continues to consolidate its military presence on its seven artificial islands to
the extent of deploying anti-ship and anti-aircraft missiles. China has increased the
maritime presence of its Coast Guard, maritime militia and fishing fleet in the South
China Sea. These ships and vessels act with impunity towards the other claimants.
Politically and diplomatically, China has been successful in getting all ten ASEAN
member states to suppress any mention of the Arbitral Tribunal Award in public
statements. ASEAN members refer to “legal and diplomatic processes” instead.
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Q2: If China did violate UNCLOS, why has the international community keep silent or
at least not expressed any strong reactions to China’s behaviour?
ANSWER: There is no unified “international community.” In the first instance,
compliance with the Arbitral Tribunal’s Award fell on China and the Philippines. Three
years ago (May 2016) Rodrigo Duterte became president of the Philippines and chose
to put the Award aside in favour of a pivot towards China. Duterte’s actions have
undermined both the ASEAN community and international community.
Second, initially only Vietnam and Myanmar mentioned the Arbitral Tribunal Award
by name. All other ASEAN members refrained from directly mentioning the Award or
did not mention it indirectly. ASEAN itself chose to use the expression “legal and
diplomatic processes” and focused on getting China to fully implement the Declaration
on Conduct of Parties in the South China Sea and to expeditiously complete a Code of
Conduct (COC) for the South China Sea. The current ASEAN-China Single Draft South
China Sea Code of Conduct Negotiating Text makes no reference to the Arbitral
Tribunal Award.
Third, elements of the international community composed of liberal democracies and
major maritime powers have taken a more assertive role in calling on China to observe
the rule of law. The United States used the third anniversary of the Award to call on
China to implement it. China has rebuffed these members of the international
community viewing them as outside powers.
Q3: What exactly does China want for now – buying time or something else?
ANSWER: China wants to conclude a COC in the South China Sea on terms favourable
to itself, such as excluding “outside countries” from conducting oil exploration or
military exercises in the South China Sea. China is pushing for joint development only
between national oil companies from China and ASEAN member states. An ASEAN-
China COC would serve as a legal basis against any interventions by outside powers.
China is also gradually building up its military capacity to seriously challenge U.S.
dominance in the South China Sea.
Finally, China seeks a compliant ASEAN that respects China’s so-called core interests
including sovereignty over the South China Sea. China will apply diplomatic, political
and maritime coercive pressures to keep individual ASEAN member states in line.
Q4: How do you assess activities by the United States and European Union in the South
China Sea over the past three years? Note that both France and the United Kingdom
have made friendly port calls and conducted their own “Freedom of Navigation
Operational Patrols (FONOPS)”?
ANSWER: A distinction should be made between traditional freedom of navigation on
the high seas and the U.S. policy of challenging what it views as excessive claims to
maritime jurisdiction or FONOPS. Under international law, all warships have freedom
of navigation on the high seas (what America calls international waters) and the right
of innocent passage through another states’ 12 nautical mile territorial sea.
Both France and the United Kingdom are exercising traditional freedom of navigation
as they sail through the South China Sea. They are doing so not on behalf of the
European Union but independently and as allies – NATO allies – of the United States.
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Both France and the UK have separate reasons for their actions. France won a major
submarine deal with Australia and wants to show case its military expertise. France,
with its possessions in the South Pacific, is now under the umbrella of the U.S. Indo-
Pacific Region strategy. The UK is seeking a post-Brexit role and is considering free
trade agreements with Australia and membership in the Comprehensive and
Progressive Agreement on Trans-Pacific Partnership. Both France and the UK are
responding to pressure from Trump to do more as treaty allies.
Q5: The Philippines’ attitude towards China seems inconsistent. In your assessment,
what is the real stance of the Philippines when it comes to China and the South China
Sea? Is there any change after China sank a Filippino boat and abandoned the
fishermen earlier this year?
ANSWER: The inconsistency in the stance by the Philippines towards China and issues
related to the South China Sea is mainly a product of the mercurial personality and
mental state of President Rodrigo Duterte. There are elements in the Philippine
Department of Defense that are concerned if not alarmed at China’s continual
encroachment on Philippine sovereignty.
The United States has made unprecedented clarifications of the 1951 mutual defense
treaty, including that the South China Sea is part of the Pacific and that actions by
China’s maritime militia would be viewed as the same as military action. The 1951
treaty includes provision for consultations if the armed forces of either the US or the
Philippines are attacked in the Pacific.
Chinese actions, such as the sinking of a Filipino fishing boat, have rekindled anti-China
Filipino nationalism. But, paradoxically, at the same time as anti-China sentiment has
grown so too has support for President Duterte. We can only expect more
inconsistency in the Philippines.
Q6: What is your assessment about what Vietnam has done in the three years
following The Hague ruling?
ANSWER: Vietnam has stepped up the modernization of its armed forces including the
navy and air defence-air force, expanded the number of ships in the Vietnam Coast
Guard, and made improvements to living conditions on its islands and rocks.
Vietnam has also adopted a comprehensive Maritime Strategy to link national defense
and economic development of its coastline and island territories in the East Sea.
Vietnam has witnessed a gradual expansion of its security-defence ties with the United
States, such as receiving the USS Carl Vinson aircraft carrier, and with Japan and India
as well.
Vietnam has submitted very strong proposals for consideration in the Single Draft
South China Sea Code of Conduct Negotiating Text, including a list of do’s and don’ts.
Vietnam will play a crucial role as ASEAN Chair in 2020.
Vietnam-China relations have improved since 2017-18 when China abruptly cancelled
its participation in friendly border exchanges. This year the Vietnamese Navy
participated in the 70th anniversary of the People’s Liberation Army Navy fleet review.
High-level leaders continue to exchange visits and commit to the peaceful resolution
of disputes.
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But tensions remain in the East Sea. The issues concerning hydrocarbon exploration
in the waters near Vanguard Bank have not been resolved, and since early this month
China has escorted a survey ship to conduct seismic surveys in the waters to the west
of Truong Sa Lon and northeast of Bai Tu Chinh.
Q7: After the signing of the Europe Union Vietnam Free Trade Agreement (EVFTA), the
head of EU representatives in Vietnam said that the EU would continue conducting
freedom of navigation activities in the South. China Sea. Over the past few years,
Vietnam has signed several tree trade. Agreements. In your assessment can Vietnam
draw any benefits from these agreements for its. Stance on the South China Sea?
ANSWER: The importance of the South China Sea as a global shipping route will only
be enhanced as a result of an increasing web of Free Trade Agreements (FTAs) that
Vietnam has signed. These FTAs will contribute to the growth of world trade and thus
increase the importance of safe and secure commercial transit along global trade
routes, including through the Straits of Malacca and the South China Sea. This
common interest will bind trading nations closer together to protect their commercial
interests including freedom of navigation.
FTAs will have no direct impact on the resolution sovereignty claims or claims to
sovereign jurisdiction. However, FTAs will have an indirect impact on claimant states
to refrain from actions that would increase tensions or escalate disputes and thereby
undermine the benefits of global trade.

Suggested citation: Carlyle A. Thayer, “The South China Sea Arbitral Award Three Years
Later,” Thayer Consultancy Background Brief, July 14, 2019. All background briefs are
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Thayer Consultancy provides political analysis of current regional security issues and
other research support to selected clients. Thayer Consultancy was officially
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