China, and Asia, Brace for Diplomatic Fallout from South China Sea Case

One day to go for Hague tribunal verdict that will cause ripples across East Asia

The Hague: When the Permanent Court of Arbitration (PCA) delivers its verdict on the South China Sea dispute here tomorrow, it is likely to stay clear of three sensitive issues.

First, the tribunal will not rule on the validity or legality of the ‘nine-dash-line’ (shown in the map above as the solid red claim line) that has been invoked by China to assert its “sovereignty” over islands and other maritime features in the South China Sea. Second, the PCA will not assess whether new “islands” created by China through sand dredging and land reclamation since 2013 constitute sovereign territory. And third, the arbitral tribunal will make no attempt to delineate a maritime boundary that is acceptable to China and the Philippines.

Instead, the PCA on Tuesday will answer two narrow questions:

First, whether China has certain “historical rights” that grant it absolute entitlements in the South China Sea; and
Second, if maritime features in the sea like Mischief Reef, Fiery Cross Reef and Scarborough Shoal are “low-tide elevations” or “rocks” within the meaning of the UN Convention on the Law of Sea (UNCLOS).

The tribunal’s decision may not set headlines on fire, but it will force a legal imprimatur on the resolution of future South China Sea disputes, not just between China and the Philippines, but among all littoral states that have staked a claim to the islands in the region – including Malaysia, Brunei and the Philippines.

This is precisely the outcome that China wants to avoid, which explains why Beijing has made no formal representation before the arbitral tribunal since proceedings began in July 2013.

What Philippines wants

The Philippines government, led then by a belligerent president Benigno Aquino III, approached the Permanent Court of Arbitration in January 2013 with a simple request: uphold plainly Manila’s rights under UNCLOS with respect to its territorial sea, exclusive economic zone and continental shelf.

UNCLOS – the international treaty governing maritime matters – grants countries a 200 nautical mile exclusive economic zone, even though a state’s territorial waters extend only as far as 12 nautical miles.

In other words, the Philippines sought to affirm its sovereign economic rights on any maritime feature in South China Sea that extended upto 200 miles from its shores. To support this claim, Manila argued that the Spratly Islands (which China refers to as the ‘Nansha Islands’) and other assorted reefs and shoals in the area — which are occupied by China, the Philippines, Taiwan, Malaysia and Vietnam — are merely rocks or low-tide features that do not confer any sovereign rights to the occupying state. The governance of marine resources and the exploitation of oil and gas reserves in the South China Sea, the Philippines insisted, must be based on the clear rules set by the UN Convention on the Law of the Sea.

This may seem like an innocuous claim, but its political significance cannot be overstated. Should the tribunal use the provisions of UNCLOS to adjudicate the South China Seas dispute, it will deal a fatal blow to China’s “nine dash line”. The “nine dash line”, claimed officially by China as its outer maritime boundary in the area since 1947, has no basis in the UN regime. It was an eminently political product, with little clarity in Beijing’s policy statements on what the “line” actually signified.

The Chinese position

Unsurprisingly, the Chinese government has claimed that this is a dispute over territorial sovereignty, which the Permanent Court of Arbitration has no remit to examine. If the maritime boundaries in the South China Sea themselves have not been determined, this argument goes, how can an arbitral tribunal identify the Philippines’ Exclusive Economic Zone?

Beijing has also insisted that the “unilateral” conduct of the Philippines in pushing for “compulsory dispute settlement” is barred by several bilateral agreements on the South China Sea. Since the sovereign rights over marine resources in the sea were never negotiated between both parties, the dispute should be heard by a third party after all political options are exhausted, China has asserted.

Though UNCLOS envisages several methods of dispute resolution, most disputes between parties have been handled by the PCA.

To protest the “encroachment” of its mandate by the PCA, China has refused to participate in the arbitration. Between July and November 2015, the PCA held seven hearings on the jurisdiction and merits of the case, sending the Chinese Embassy in The Hague a daily transcript of the proceedings. In response to the arbitration, China’s foreign ministry put out two position papers highlighting its claims.

Clash of law and geopolitics

In October 2015, however, the tribunal dismissed China’s position that it lacked the jurisdiction to adjudicate the matter, stating that the dispute is centrally about the “interpretation of provisions” in UNCLOS.

Should UNCLOS become the touchstone for distributing maritime rights and responsibilities in the South China Sea, any discussion about the nine-dash-line would be rendered academic. What the Philippines would lack in political clout to demolish, it would accomplish by legal means. This scenario looks increasingly likely: in May 2016, China’s vice foreign minister Liu Zhenmin told a US media delegation that “the award will probably be in the Philippines favour”. Beijing has also made it amply clear that it will not accept the July 12 ruling.

The Philippines, under a new president who does not share his predecessor’s affection for the United States, has realised the folly of escalating a political dispute with China by legal means.

Days before the verdict, President Rodrigo Duterte sought “direct talks with China as soon as possible”. The PCA’s verdict may be a setback for Beijing but it will irreparably set back relations between both parties, with serious consequences for the stability of the region. In the process of staking its claim, the Philippines may have already risked ties with Taiwan, which is concerned that the tribunal’s verdict may bear adversely on the legal character of the Itu Aba island in the Spratlys, under its control.

As former diplomat Dai Bingguo highlighted during his recent visit to Washington D.C., it was the United States under General Douglas MacArthur that helped the (then) Republic of China reclaim the Nansha Islands after World War Two. If political exigency drove the US to support China then, it is now nudging the Philippines towards a confrontation with Beijing that Manila cannot afford.

In the aftermath of the pronouncement, India too would do well to maintain a careful distance from the arbitral ruling — this is a dispute characterised by strong legal claims on both sides, but brought to a head prematurely by the geopolitical churn in Asia. It would be unwise for New Delhi to be caught in its currents.

Arun Mohan Sukumar is at the Observer Research Foundation, New Delhi. He is covering the South China Sea dispute at the Permanent Court of Arbitration in The Hague at the invitation of The Wire.