Thayer Consultancy

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Background Briefing: South China Sea: Is There a Dispute Settlement Mechanism? Carlyle A. Thayer April 24, 2012

[clientnamedeleted] TohelpsettlethecurrentdisputethePhilippinesclaimthattheScarboroughShoalis withinits200mileEconomicZone,appealingtotheUnitedNationsConventionon theLawoftheSea.HoweverourunderstandingisthattheScarboroughShoaldoes notqualifyasanislandwitharighttoa200nauticalmileExclusiveEconomicZone (EEZ)becauseitissosmallthatitcannotsustainhumanhabitationoraneconomic lifeofitsown.Thereforetheshoalfailstomeettherequirementsthatconstitutean islandwitharighttoitsownEEZ.Ifthisisso,thenwhatremedycanbeusedtosettle orarbitratethisstandoff?Canyouprovideyourassessment? ANSWER: China is claiming sovereignty over the rocks at Scarborough Shoal even though it does not physically occupy them. On the basis of this China claims a 12 nautical mile territorial sea that rocks are entitled to under UNCLOS. Under this interpretationChinaisthenabletoclaimsovereignrightsovertheresourcesinthe watercolumn(thefish)andseabed.IfweassumethattheonlythingthePhilippines isclaimingisitsEEZbasedonitsbaselines aroundLuzon, thenthearea ofoverlap wouldbetheonlyareaindispute.Thiscouldbedecidedbybothpartiesagreeingto drawamedianlineorotherdividingline.Recentinternationalcourtdecisionshave ruledthatsmallfeatureslikerocksshouldnothaveadisproportionateimpactona settlement.ThusthePhilippineswouldbeentitledtomoreofthewaterthanjusta divisiondownthemiddlewhereitsclaimsoverlapwiththoseofChina. But the Philippines is claiming sovereignty over Scarborough Shoal on the basis of continual administration and what I would call intermittent occupation over the years since independence. The Philippines once had a lighthouse on Scarborough Shoal. The Philippines' EEZ overlaps the rocks and thus the Philippines claims sovereign rights over all the resources in the water column and seabed that fall withinitsEEZincludingthewatersaroundtherocksatScarboroughShoal. The International Tribunal on Law of the Sea (ITLOS), established as a result of UNCLOS,candecideonmaritimedisputesbutnotsovereigntydisputes.Atthetime China signed UNCLOS it issued a separate statement exempting itself from the UNCLOSdisputesettlementmechanisms.AllsignatoriestoUNCLOSwereentitledto makestatementstothiseffect.ThePhilippineshasinvitedChinatotakethedispute

2 toITLOSandChinahasdeclined.Thisclosesthemostobviousmechanism to solve disputesoversovereignrights(maritimejurisdiction). SovereigntyoverterritorywhetherrocksorislandsisamatterforChinaandthe Philippinestodecide.Theycouldnegotiatebilaterallyandcometoanagreement.Or they could agree to take the matter before the International Court of Justice for a binding decision. China insists on bilateral negotiations. The Philippines refuses to negotiateoverwhatitclaimsisitsterritory.ThePhilippinesinvitationtoChinatoput the matter before ITLOS does not directly address the question of sovereignty as distinctfromsovereignrights. Thereisnoinstantremedytosettlethismatter.ASEANmembersaretryingtodraft aCodeofConduct(COC)intheSouthChinaSeaandgetChinatosignit.Thepurpose oftheCOCistoregulatestatebehaviouruntilthesovereigntydisputesareresolved. Don'tholdyourbreath.ASEANisinternallydividedonthematter.Theycannotreach consensus on an appropriate enforcement mechanism, without which the COC would be toothless. They also cannot agree on when to involve China in the negotiations.ThePhilippineswiththesupportofVietnamarguethatASEANshould drawupitsdraftfirstandthenpresentittoChina.Others,IndonesiaandCambodia, wanttoinvolveChinaatanearlierstage.AtthemostrecentASEANSummit(April3 4) it was agreed that ASEAN member would proceed to draft the COC but that ASEAN would communicate with China during this process and feed China's inputs intothedraftingprocess.Thiswasacompromisepureandsimple. At first China resisted getting involved in drafting the COC arguing that the Guidelines to Implement the Declaration on Conduct of Parties must be implementedinfullfirst.JustpriortotheASEANSummitPresidentHuJintaovisited CambodiaandtoldPrimeMinisterHunSenChinawasopposedtohurryingalongthe COC.Chinainsteadproposedtheappointmentofagroupoftenexpertandeminent persons to craft proposals to settle current disputes. This was rejected by the PhilippinesandVietnam.ASEANcountriessympathetictoChinathenbegunpushing forChinatobebroughtintotheCOCdraftingprocesssoonerratherthanlater. The best that can be hoped for isthat both the Philippines and China refrain from usingforceorthethreatofforcetosettlethestandoffatScarboroughShoal.Inmy personalassessmentthereisnohopeofeversettlingthedisputesoversovereignty in the next decade or longer. In effect, possession is nine tenths of the law. China mayclaimsovereigntyoveralltheislandsandrocksand"theiradjacentwaters"(200 nauticalmilesEEZor12nauticalmileterritorialseasasthecasemaybe),butitonly occupiesninefeatures.NeitherVietnamnorthePhilippinesaregoingtorelinquish islandsandrocksthattheycurrentlyoccupy. Potentiallydestabilizingtrendsareunderway.Allpartiesarebuildinguptheircivilian maritimelawenforcementcapabilitiesbutChinaisintheleadandwilldominatein this department. All Chinese ships and vessels involved in the Scarborough Shoal standoffarecivilian. Allstatesaremodernizingtheirarmedforcesandequippingthemwithavarietyof sophisticatedantishipmissiles.Thereisalsosomethingofaminiarmsracegoingon

3 with the proliferation of conventional submarines in the fleets of Southeast Asian navies as well as China. In sum, the South China Sea is contested, it will become increasingly congested, and it will only be a matter of time before there is an incidentinwhicharmedforceisused.