Maintaining peace in SCS

China has got biggest shock to its emerging global superpower image and faced international embarrassment when the Permanent Court of Arbitration in The Hague ruled recently that China did not have historic rights to the South China Sea and that it had breached Philippine sovereignty by endangering its ships and fishing and oil projects in the energy-rich waters.

The Permanent Court of Arbitration (PCA) has issued a sweeping verdict in favor of the Philippines in its case against China’s territorial claims in the South China Sea. The verdict represents a serious blow to China’s efforts to win legitimacy for its claims in the region.

China claims more than 90 per cent of the South China Sea, an area which accounts for more than a tenth of global fisheries production and is also claimed in part by the Philippines, Vietnam, Malaysia, Brunei and Taiwan. Since China’s declaration of nine dash line in SCS, the region has grown increasingly concerned by China’s assertiveness in SCS.

In 2012, Beijing snatched Scarborough Shoal away from Philippines. The two states has quarreled over allegations of illegal poaching by Chinese fishermen. After a two month standoff, the parties agreed to withdraw from the Shoal. Manila did. Beijing did not. Since then China has excluded Philippine boats from the Shoal’s waters. In response to this escalatory move, Manila filed an arbitration case against China January 22, 2013, under the auspices of the UN Convention on the Law of the Sea (UNCLOS).

The landmark decision represents a strong rebuke of China’s expansive claims to maritime territory in the South China Sea. The PCA’s ruling serves not only as a technical legal decision, binding on the parties-China and the Philippines, but also as a broader message concerning the peaceful settlement of disputes in the South China Sea pursuant to a rules-based international order.

As to be expected, China has strongly condemned the verdict, declaring it null and void. Since the Philippines brought the case to the PCA in 2013, the Chinese government has consistently denied the panel’s authority, citing existing bilateral treaties held with the Philippines. China maintains that as the dispute concerns a row over territorial sovereignty, it does not fall within the scope of UNCLOS.

Significance of SCS

The South China Sea, part of the Pacific Ocean spreading across 3.5 million sq km, is critical commercial gateway for a significant portion of the world’s merchant shipping, hence is an important economic and strategic sub-region of the Indo-Pacific. Almost $5.3 trillion in total trade passes through the SCS every year. Other than the huge fishing stock, it is assumed that 11 billion barrels of oil and 190 trillion cubic feet of natural gas are trapped in the South China Sea, which makes it an important geo strategic location.

There is great importance of the South China Sea to global commerce and prosperity. The importance of maintaining free access to Asia-Pacific sea lanes under international law cannot be overstated: almost one-third of the world’s maritime trade transits the South China Sea annually; eight of the world’s ten busiest container ports are in the Asia-Pacific region; and approximately two-thirds of the world’s oil shipments transit through the Indian Ocean to the Pacific.

Recently, Centre for Asian Strategic Studies - India (CASS-India), a Delhi-based privately run independent think-tank, organized a round table conference in New Delhi where eminent speakers and experts believed that China should abide by the ruling and it has moral binding to accept the PCA verdict.

Experts also believed that China’s aggressive stand on the whole SCS issue will have serious political and economic implications for the whole region. Even experts indicated that as China wants to exert itself and is becoming more ambitious, the US may move its military assets to Chinese held territories in SCS as part of its rebalancing act.

Experts, which included Shekhar Dutt, VAdm Shekhar Sinha, Vadm Anup Singh, Dr Pankaj Jha, Dr Faisal Ahmad, Dr Chintamani Mahapatra, Dr M S Pratibha,  N V Subramaniam Rajeev Sharma and Arti Bali, noted that as the immediate reaction of the verdict  few low intensity conflict might escalate in the SCS. Though China has threatened to declare and ADIZ in SCS and has indicated of increasing military exercise in SCS, however everybody during the conference ruled out any possibilities of military conflict  by China in the near future.

Ruling findings

In assessing the Philippine submissions, the tribunal greatly reduced the scope of maritime entitlements that states can claim in the South China Sea. First, the tribunal concluded that China cannot lawfully, under the UN Convention on the Law of the Sea, claim historic rights to resources within the nine-dash line that appears on Chinese maps. Although China has not clarified the nine-dashed line or even explained officially what it means, the tribunal indicated that one potential explanation, as a claim to historic rights, was inconsistent with the convention. The tribunal reasoned that whatever historic rights or high-seas freedoms China enjoyed were “extinguished” when it acceded to the convention.

Second, the tribunal interpreted Article 121 of the convention, which outlines the “regime of islands.” In particular, the tribunal offered a four-part test for determining what constitutes an “island” and not a rock. This matters greatly because under the convention islands are entitled to a two-hundred-nautical-mile Exclusive Economic Zone, while a mere rock is entitled only to a twelve-nautical-mile territorial sea. The tribunal ruled that none of the naturally formed land features satisfied its four-part test and that no “islands” exist in the Spratlys from which China, or any other claimant state, can claim a two-hundred-nautical-mile EEZ.

Taken together, these two elements of the tribunal’s award greatly restrict what maritime zones China can claim. In fact, China can claim only a twelve-nautical-mile sea around those naturally formed land features in the Spratlys that would be deemed to be rocks or above high tide. According to the tribunal, any claim to either historic rights or to an EEZ would be inconsistent with the convention, and unlawful.

Court concluded that China’s “nine-dash line,” which Beijing regularly references with regard to its claims in the South China Sea, does not grant it historic claims to the resources in those waters.

The international arbitration provides an important record of the South China Sea dispute. The three-and-half year proceedings at The Hague produced volumes of information including evidence drawn from various national archives, ancient maritime maps, and expert testimony on various topics ranging from navigational safety to environmental concerns to technical evaluations on the habitability of maritime features. Many of these documents involved Chinese sources.

The Court also ruled on the legal status of each of the terrain features in the Spratly Islands area that the Philippines had incorporated in its case. In doing so, it concluded that none of them is, in fact, an “island” in the legal sense, and none is entitled to a 200 nautical mile exclusive economic zone (EEZ).

Land reclamation and ecology

Within the short span of a year, China’s rapid construction of artificial islands in the disputed Spratlys has radically changed the geographical and security landscapes in the South China Sea. Several reefs have been destroyed outright to serve as a foundation for the new islands, and the process also causes extensive damage to the surrounding marine ecosystem.

The South China Sea is one of the most biodiverse regions in the world-home to 76% of the world’s coral species and 37% of the world’s reef fish. Because coral reefs provide crucial habitats for fish and fish larvae, widespread loss can have a major economic and social effect.

China’s land reclamation activities in the South China Sea remain a matter of grave concern for reasons that are not solely political. The radical transformation of major coral atolls in the region’s marine ecosystem affects far more than the already huge area physically occupied by China’s new islands. The biophysical impacts extend well beyond their artificial foundations into the waters of surrounding littoral states.

The Spratly Islands region has long been known as a treasure trove of biological resources, hosting part of Southeast Asia’s most productive coral reef ecosystems.

China has reclaimed more than 2900 acres since December 2013, almost 400 times more than all other claimants combined in the past 40 years.

China has placed runways and radar facilities on new islets in the South China Sea, built by piling huge amounts of sand onto reefs. China has focused its efforts on building ports, three airstrips, radar facilities and other military buildings on the islands. The installations bolster China’s foothold in the Spratly Islands, a disputed scattering of reefs and islands in the SCS more than 500 miles from the Chinese mainland.

China claims its building work is partly to better fulfill its international obligations, including as a part of a deal agreed at a UNESCO meeting in Paris in 1987.

Accordingly China is entrusted to build five observation platforms, including one on Spratlys. Therefore China claims that its construction should be commensurate with its responsibilities and obligations as a major country.

However, Beijing has largely been silent about some of the tribunal’s most damning findings: that its activities there have “caused devastating and long-lasting damage to the environment.”

The Permanent Court of Arbitration investigated The Philippines’ claims that China has been doing grave harm to the region’s ecology, in violation of its commitments under the UNCLOS.

The tribunal wrote in its final ruling of more than 500 pages that damage to the coral reefs in the Greater Spratly Islands spread for 48 square miles, and China was responsible for 99% of that.

The tribunal found that China not only failed to prevent Chinese fishing boats from harvesting endangered species-including sea turtles-but also provided armed protection for those vessels. And it concluded that China was “fully aware of” and “actively tolerated” a practice called propeller chopping to harvest endangered giant clams-an activity that basically kills coral reefs.

However, before the court’s ruling, the state-run China Daily newspaper ran a commentary  saying that “some countries slander that China developing the South China Sea islands and reefs has caused extensive damage of coral reefs. On the contrary, the truth is, China insisted on developing ‘green engineering and ecology reefs’ as the concept of environmental protection.”The newspaper claimed that China had “conducted thorough in-depth research” and “applied dynamic protective measures during the whole process, to complete projects as well as achieve environment protection, to accomplish sustainable development” in the area. “After China completes the construction activities, it will greatly enhance the reefs environmental protection capability,” the paper added. “These practices can stand the test of time.”

China refused to participate in the tribunal’s proceedings, and did not respond to requests from the court to provide evidence of its efforts to protect the environment in the South China Sea or proof that it had conducted an environmental impact assessment-as required not only by UNCLOS but China’s own laws.

Although some of the damage was caused by dredging and island-building, the majority was blamed on the giant-clam harvesting using propellers.The tribunal found that China’s large-scale reclamation and construction of artificial islands has caused severe harm to coral and violated the country’s obligation to preserve fragile marine environments. The tribunal also found that Chinese authorities were aware that Chinese fishermen have harvested endangered sea turtles, coral and giant clams on a substantial scale. Many of the clam shells are taken to the Chinese island of Hainan, where they are carved into decorative items and sold to tourists.

Therefore there is no hope for many of these reefs to recover in the coming decades or centuries, and it will be virtually impossible to restore the reefs given global warming and destructive fishing techniques continuing.

In a commentary ahead of the ruling, China’s foreign ministry said the construction of artificial islands had a very small impact on the environment and once completed the country would be able to “greatly enhance the environmental protection of the reefs and relevant practices would stand the test of time”.

The ecological footprint of China’s reclamation spans more than the ground that the new islands stand on. While formerly productive reefs have been replaced with lifeless sand and concrete, the months of work to create each island also smothered surrounding areas through sedimentation and turbidity produced by dumping massive amounts of filling material.

Natural atolls will be dredged and become artificial harbors for the many ships to be stationed in the area, bringing with them the corresponding impact of continuous operational marine pollution on any remaining coral.

The destruction of almost 311 hectares of precious reefs and pegs the economic losses could be worth at least 110 million USD annually. The impact of China’s activities thus has a long term impact on the marine environment of all the littoral States around the South China Sea.

China’s response

China has rejected the ruling, calling it “null and void”, and inaugurated two airports in the disputed reefs in the South China Sea and threatened to establish an air defence zone in the region.

Beijing does not consider the issue over and has little intention of compromising its stance that the territory encompassed within the “nine-dash line” are Chinese. Indeed,Philippine fishing boats that tried to operate near Scarborough Shoal in the wake of the hearing were driven off by Chinese coast guard vessels.

However, there are possibilities that China may be reluctant to pursue an aggressive path in response to the ruling.

Beijing is trying to gather diplomatic support to the ruling of the PCA. Prior to the announcement, Chinese Foreign Ministry spokes people regularly declared that some 60 countries sided with China and their names were even published in the national newspaper post the verdict, however few countries have declared shock in their names being included in that list.

With the precedent having been established by the Philippines, the Chinese government may fear that other countries with which it has territorial disputes in the South China Sea might bring their cases to the PCA, or even Japan with regard to its dispute in the East China Sea.

In the short-run, however, it is unlikely that Beijing will engage in the outright use of force to uphold its claims in defiance of the PCA. While Beijing will likely continue to harass foreign aircraft and ships in the South China Sea, a more aggressive response while it is exercising with a host of foreign navies is unlikely.

Similarly, Beijing may well choose to defer any major activity until after the G20 summit scheduled for September in Hangzhou. On the other hand,the Chinese President Xi Jinping, who has looked to define himself as a strong leader on the international stage, will be concerned that any appearance of weakness will give ammunition to internal critics ahead of a major reshuffle at the top of the ruling Chinese Communist Party (CCP) in 2017.

The PCA ruling has implications beyond the waters disputed by China and the Philippines. The tribunal’s decision will be welcomed by other claimant states, led by Vietnam and to a lesser extent by Malaysia and Brunei. Indonesia is not a claimant state in the South China Sea dispute, but it faces a challenge from China in the waters off Natuna, a chain in Indonesia’s Riau province.

However one should not expect a common position to be issues on the ruling by the ASEAN, as there is no unity among the member states .Cambodia has said that it will continue to block any joint ASEAN declaration against China on the South China Sea and the government of Laos takes a similar position. Neither country is a claimant state in the dispute, but both rely heavily on China for foreign aid and development loans.

If the SCS is to become the defining issue between China and the ASEAN, that would be the beginning of the end of ASEAN as a coherent grouping. The upcoming ASEAN Regional Forum provides a good opportunity to reflect on this challenge.

For the United States, whatever the Chinese response, the essential element to keep in mind is that the PCA ruling has not resolved the South China Sea issue. Beijing clearly has no intention of ending its expansive claims. The US will come under pressure to lend support to other claimants in the region, and the situation will probably revert to a pattern similar to recent years: steadily rising tensions, with a growing risk of an economically damaging military clash.

Therefore, all parties should seize the opportunity offered by this legal juncture to regroup and refocus on the wider strategic picture.

Meanwhile, the PCA ruling should not detract from the longstanding proposal of agreeing on a code of conduct for the South China Sea. In order to prevent accidental conflict escalations, some form of agreement such as the Code for Unplanned Encounters at Sea (Cues) suggested by Singapore government, is needed. To cultivate restraint by claimant states in pursuing their rival territorial claims, the ASEAN-China South China Sea Code of Conduct (CoC) remains the most promising avenue. ASEAN needs to push forward with agreeing among it self the outline for a CoC consistent with international law that all its member states can first commit to upholding.