Commentaries

Arbitration Over, Time for China to Lead Responsibly

Aileen S.P. Baviera

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Photo: Permanent Court of Arbitration

On July 12, 2016, the arbitral tribunal organized under the UN Convention on the Law of the Sea (UNCLOS ) Annex VII , and registered at the Permanent Court of Arbitration in The Hague, ruled on the complaint brought by the Philippines that China’s actions in the South China Sea had encroached on its maritime rights. The tribunal ruled largely in favor of Manila.

In a decision that was proclaimed “final and binding,” it concluded that China’s nine-dashed line claim had no basis in law or historical fact, and that the features occupied by China and Taiwan were not legally “islands” and are therefore not entitled to large maritime zones of their own. This ruling significantly reduces the area under dispute to small features and narrow belts of water immediately surrounding those features.

The court asserted that China had acted contrary to law when it built Mischief Reef into an artificial island and prevented Filipino fishermen from accessing their traditional fishing grounds in Scarborough Shoal — both features within the Philippines’ exclusive economic zone (EEZ). In so doing, the tribunal upheld the Philippines’ sovereign rights to the waters and resources within its 200-nautical-mile EE Z limits under the UNCLOS.

The tribunal also censured China for causing massive environmental damage to adjacent reefs through its dredging and construction activities, which it undertook even while the area was subject to arbitration proceedings. Such actions constituted a violation of its obligations under UNCLOS to protect the marine environment; the fact that they took place while the areas under question were under litigation, moreover, demonstrated bad faith.

China’s unequivocal position has been to reject the jurisdiction of the court and insist that only direct bilateral negotiations rather than third parties could provide solutions to the maritime disputes. It tried to undermine the credibility of the members of the arbitration panel and the integrity of the process itself, and severely criticized countries that declared support for the ruling or called for Beijing to comply. This has led some observers to question China’s commitment to international law.

A HOLLOW VICTORY WITHOUT COOPERATION

Most analysts agree, however, that without China’s co-operation, the arbitration award becomes practically unenforceable. The challenge is in persuading China that accommodation and voluntary compliance with the decision are in its best interests. The following arguments are put forward:

First, geopolitics. China’s territorial assertiveness has helped to justify US intervention and Japan’s growing security engagement in the South China Sea, and increased the pressure on Australia, South Korea, the Philippines, Vietnam and some other ASEAN countries to strengthen security links with the US. Rather than helping China to forge the “new type of major-power relations” that it says it wants with the US, ignoring the tribunal decision while continuing its military buildup could further tilt the balance of influence in favor of the US in China’s own backyard. Accommodation and voluntary compliance, on the other hand, may reduce the perceived need for third-party intervention, at the same time dissuading others from trying to “contain” China.

Second is economics. Facing economic slowdown and anchoring its future growth on cooperation with neighboring economies, China needs to provide assurances to smaller countries — particularly those it targets as part of its ambitious One Belt, One Road initiative — that it will not use its size, superior military power or economic leverage to enforce its will even when international norms and law uphold the rights of other states. Long-term economic partnerships can only be built on the expectation of mutual benefit and on trust underpinned by clear rules and agreed norms.

Third is its own leadership aspirations. As China gears up for a future world order where it fully takes its place at the rule-making table and becomes a provider of public goods, it must prove itself capable of and committed to upholding existing international treaties and conventions that are the bedrock of stability in the international system. Just like any dominant power, China must demonstrate that it supports the rules-based order that many states — including itself — have benefited from. Progressive agreements like UNCLOS have historically tried to break the monopoly of great maritime powers over the seas and should be seen as positive factors for peace and development.

The new Philippine government led by President Rodrigo Duterte has indicated its preference for a more harmonious relationship with China, and commenced an “ice-breaking” dialogue following nearly six years of bilateral tension under the Aquino government. In the wake of the announcement of the Philippines’ legal victory, Manila has shown the utmost restraint and sensitivity toward China’s feelings, and has pledged to pursue only peaceful solutions in claiming its maritime rights and interests. Chinese commentators have lauded this as the Philippines’ return to the “right path.” Whether this approach will in turn encourage China along the path of respecting international law and equality among states — principles often stated in China’s agreements with the Philippines and ASEAN — is the crucial question.

FORCE WON’T WORK

No country can force China to abide by the arbitration award; this is for China itself to decide. If and when it does, given a more positive political climate in relations with the Philippines as well as the international community’s encouragement of a regional dialogue process, China’s voluntary compliance can take form and shape in the already existing arenas of engagement on the South China Sea issue.

Bilateral negotiations with the Philippines can initially focus on restoring the pre-2012 status of Scarborough Shoal as a common fishing ground, but subject to regulations against overfishing and environmental destruction. China’s island construction activities can no longer be reversed, but redirecting their functions towards peaceful uses and common benefit under China’s own “dual track” approach to the South China Sea may be the subject of future discussions with ASEAN.

On the other hand, co-operation on maritime law enforcement (in lieu of unilateral actions) can be part of negotiations for an ASEAN-China Code of Conduct, as well as ongoing naval discussions on the Code for Unplanned Encounters at Sea (CUES) or the proposed “expanded CUES” that may include regional Coast Guards. Other areas of functional co-operation, such as marine scientific research or marine environmental protection, can continue to be developed as a commitment to the existing ASE AN-China Declaration of Conduct. The difference is that in all these processes, pending the settlement of the sovereignty or ownership issue, the rights of coastal states in their exclusive economic zones should now be upheld, and states that occupy various features can exercise sovereignty only up to 12 nautical miles from these said features.

GETTING TO A WIN

The advantage to China of the arbitration award is that it completely avoids the issue of sovereignty, thus harking back to Deng Xiaoping’s wisdom of shelving sovereignty disputes in favor of joint development, and allowing the next generation to find a way out. The solutions need not depart from this previous (i.e. pre-Xi Jinping) policy or even from current engagements, but they do require a drastic change in the Chinese mindset on two fronts.

The first is the need to accept that this vast body of water called the South China Sea, and all that it represents, is a shared resource that is vital to many nations and peoples and not just to China. The second is the need to acknowledge that being a respected big power does not exempt one from the constraints of international law; on the contrary, it implies a heavier responsibility than that borne by other states for upholding the rules, norms and laws that bring order and peace to what could otherwise be chaotic inter-state relations.

This article first appeared in Global Asia Vol. 11, No. 3, Fall 2016