The Regional Implications of Philippines v. China for ASEAN and China

In 1986, a late-thirty-something Harvard-trained American lawyer won a significant judgment at the International Court of Justice (ICJ) against the United States for having interrupted peaceful maritime commerce and violated customary international law. Almost 30 years to the day after this ruling in Nicaragua v. The United States, Paul S. Reichler pulled off yet another momentous victory at The Hague – this time against China for having breached its international treaty obligations in the South China Sea.

Washington refused to honor the award, citing Managua’s selective application of the law, the highly-charged political nature of the case and the ICJ’s over-reach in asserting jurisdiction. Later that year, it cast the sole veto against a United Nations Security Council draft resolution that had called for full and immediate compliance with the judgment. China was one of 11 states on the Council to vote in favor.

Although Beijing today restates each of the accusations made by the defense that day, one nevertheless hopes that it will set a better example of compliance than Washington. It is also in its enlightened self-interest to do so. The political cost-benefit calculus underlying its emerging policy of ‘non-acceptance of award but escalation control on ground’ (coupled with the offer to negotiate) will gradually but decisively shift against it with each passing month – especially as Manila forces the issue in order to collect on the benefits conferred by the award. Hanoi too stands advantageously poised to force its claims in court that it enjoys traditional fishing rights within the territorial sea of the Paracel Islands and, further, that none of the high-tide features there is a fully-entitled island.

China must discreetly implement an ‘early harvest’ set of compliant actions within the framework of its ‘dual track’ approach to managing the South China Sea disputes. These could include allowing re-entry of traditional Filipino fishermen to the territorial sea of the Scarborough Shoal, withdrawing its para-military presence from the Second Thomas Shoal area, and limiting its fishing moratorium to the 12 nautical mile limit from appropriable features. Beijing should also seize this opportunity to clarify the geographic limits of its ‘relevant waters’ claim in the South China Sea as well as the functional nature of the individual and non-exclusive ‘historic right’ of access that it seeks in these waters.

ASEAN too must brace for the near and medium-term implications that stem from the July 12 award, particularly on the security front. The tribunal’s decision to annul all extended maritime claims associated with China’s land features on the Philippines’ continental shelf is most usefully seen as an endorsement of an April 2009 joint submission filed by Malaysia and Vietnam to the Commission on the Limits of the Continental Shelf (CLCS), which too had implied that none of these land features in the Spratly’s group was capable of generating exclusive economic zone (EEZ) and continental shelf rights. That filing had taken China by surprise and touched off a protest note featuring the Nine Dash Line and assertive enforcement actions thereafter within that perimeter. The tribunal’s ruling is likely to encounter a similar if not greater show of resolve by Beijing – both on the table and at sea.

Sovereignty-linked issues of jurisdiction have always been tied to a larger political calculus of stability and good neighborliness and China’s rulers have not been shy to calibrate their stance between a hardline and a flexible one to suit the strategic circumstances at hand. Should Filipino “armed forces or public vessels” provide escort to private efforts to unilaterally re-start oil and gas development activity on its now-legally undisputed continental shelf, the United States too could be formally drawn into the line of fire – with cascading implications for peace and stability in the South China Sea.

Second, the tribunal’s award calls into question the oft-regurgitated call to expeditiously conclude a China-ASEAN “Code of Conduct” (COC). The area of application of the COC’s rules was premised on the existence of unresolved maritime boundary areas of the parties concerned in the South China Sea. Having produced a de facto delimitation of the China-Philippines maritime boundary in the South China Sea by the back door (and furnishing principles for the China-Vietnam one too), the tribunal has effectively undercut the raison d’etre that sustains the envisaged Code. Both ASEAN and China would be better-off re-framing their COC interactions to a trimmed-down dialogue on preventive mechanisms that sets and stabilizes the rules of engagement and communication for their paramilitary forces at sea (on the lines of the multi-national Code for Unplanned Encounters at Sea).

Third, the scope for functional cooperation in the South China Sea has been set back in no uncertain terms – although by no means erased. Had the tribunal ruled Itu Aba to be fully-entitled island, it could have facilitated a mutually enlightened self-interest basis for oil and gas joint development in the overlapping water areas on the lines of the now-expired tripartite Joint Marine Seismic Undertaking (JMSU). With no geographic overlap to contend with now – and literally thereby no differences of entitled rights to shelve, shelving differences and seeking joint development has been transformed into a hollow slogan. The contours of functional cooperation will accordingly need to evolve from bilateral actions on oil and gas development and fisheries cooperation to sub-regional activities in cross-cutting areas, such as environment protection, maritime search and rescue, and cooperation against piracy and trans-national crime.

Finally, the arbitration has ripped apart the deliberate ambiguity that had at time helpfully spurred the search for win-win solutions to the region’s overlapping challenges at its peripheries. Yet another Asian frontier has now been transformed into a “razor’s edge on which hang suspended the modern issues of war or peace.” One fears the tenuous quiet in the immediate wake of the award will not last.

As China and ASEAN gingerly pick-up the pieces and attempt to mold a ‘new normal’ in the South China Sea, the two parties stand at an important fork on the road. They can either plump for exclusivist answers to the challenges in their designated maritime zones (the littoral states’ preference) or they can throw their weight behind comprehensive and overarching cooperative frameworks (China’s preference) that secure peace and stability at sea. China and ASEAN must try to form a consensus on this important question. Papering over the gap will be much harder than papering over the language in their annual summit communiques. Muddling through is not an option.

This article first appeared on East Asia Forum.