Published daily by the Lowy Institute

DFAT on China and Timor-Leste: No 'two-step' but one considered approach

Published 21 Jul 2016 15:35    0 Comments

Dr Michael Leach makes a number of inaccurate claims in his Interpreter post: 'The PCA ruling, Australia and Timor-Leste'.

Dr Leach asserts Australia is engaged in a ‘two-step’ in its approach to international law with China and Timor-Leste. He also appears to accept a premise of Australia’s ‘persistent refusal to negotiate maritime boundaries with Timor-Leste’. The facts, however, are quite different.

Australia takes a consistent approach, whether in relation to the Timor Sea or the South China Sea. We believe parties to disputes should resolve them peacefully, in accordance with international law. This is the approach Australia and Timor-Leste have taken in the Timor Sea. 

In previous negotiations, Australia and Timor-Leste were unable to reach agreement on permanent boundaries. As an alternative, both countries agreed to put in place arrangements to enable joint development of the resources. The UN Convention on the Law of the Sea actively encourages countries this type of approach. It’s a practical way of working together to overcome disputes. The arrangements between Timor-Leste and Australia have been cited as best practice.

Far from a ‘refusal to negotiate’, Australia in fact has made significant concessions. Under our joint arrangements, Timor-Leste receives the vast bulk of revenues (90% of the Joint Petroleum Development Area). This has allowed it to develop a US$16 billion petroleum fund.

Australia takes its treaty obligations seriously and believes in sticking to the agreements we have made. This is an expression of our respect for international law.

Dr Leach claims that CMATS is ‘inoperative’ but this is not the case. [fold]

CMATS provides for a 50/50 revenue split between Australia and Timor-Leste, despite 80% of Greater Sunrise lying in an area of exclusive Australian seabed jurisdiction. Greater Sunrise will be developed when the Greater Sunrise Joint Venture and both governments agree on a development plan.

Australia’s long-standing preference is to resolve maritime boundary issues through negotiation. This is common practice and international law specifically allows this. Around 30 countries including Canada, Thailand, the Republic of Korea, Mexico and France, take the same approach.

Importantly, where a country takes Australia to an international court or tribunal, Australia engages in that process. In fact, we are participating in two arbitrations initiated by Timor-Leste and we will abide by the decisions of the arbitrators. We have called on the parties to the South China Sea arbitration to do the same.

We are also participating in a separate conciliation process initiated by Timor-Leste. The conciliation will be heard by a five-member commission appointed by Australia and Timor-Leste. Although a conciliation is not a legally binding process, Australia is engaging in the process in good faith, in accordance with our international legal obligations. 

Despite our differences, Australia is, and will remain, committed to our relationship with Timor-Leste. Timor-Leste’s stability and prosperity are important to Australia and a key focus of our bilateral engagement, including through our $93.7 million aid program.

Photo courtesy of Flickr user yeowatzup

Poker, chess and Go: How the US should respond in the South China Sea

Published 21 Jul 2016 11:30    0 Comments

The Permanent Court of Arbitration's decision places more pressure on the US than China, as Washington must now act to support this emphatic judgement. Failure to do so will further weaken America's credibility, and undermine the rules-based order it seeks to preserve.

In order to determine how the US may effectively respond, China's strategy must be understood.

In recent years a number of high profile strategists have described China's South China Sea (SCS) encroachment as 'salami tactics'. Here on The Interpreter, Derek Lundy eloquently explained what is meant by this (though none will eclipse this gem from Yes Prime Minister). Indeed, the depiction of China's approach in the SCS as 'salami tactics' is now a widely accepted norm.

Nevertheless, this is contestable. In my view China is not employing salami tactics at all, but rather a wholly different strategy. This challenges a consensus, and requires a substantive explanation.

To my mind, there are three pre-conditions that need be met for a salami strategy to be employed: 

  • a strategic interest must be contested by two or more opposing actors
  • the aggressor must deliberately calibrate provocations below the thresholds of opposing actors
  • and effective military options without serious escalation are clearly limited.

On all three counts the SCS fails. [fold]

First, while the SCS is claimed by China as sovereign territory, it is not by the US. In the case of the latter, the concerns are expressed in terms of freedom of navigation and the rule of law. There isn't any slicing – China claims the whole of the SCS and is taking strategic steps to enforce that claim.

Contrast this with say, the Berlin blockade, where the Soviet Union was overtly attempting to 'slice' a piece of influence, and it's immediately apparent the SCS is quite different. A modern comparator is the Senkaku islands. The US has explicitly included these islands in its alliance commitment to Japan, therefore the Senkaku/Diaoyu island dispute would meet this first criterion. 

With regard to the second requirement, there is remarkably little evidence that China is carefully calibrating. Its island reclamation activities have total disregard for how the US might respond, with Beijing taking as given that Washington will cede the strategic space. This is not salami slicing but expressly challenging; the only constraint is American power, not American wrath.

Again, there are plenty of alternative examples for comparison. North Korea's provocations are innumerate, but they are carefully measured. The regime makes sure that while these actions are sufficient in scope to get the world's attention, they are not severe enough to incur a decisive response.

Finally, unlike many flashpoints, America's military options in the SCS are not especially limited. If, for some reason, America perceived China's reclamation as a direct and immediate threat, the US could render those islands inoperable without difficulty. Moreover, the initial objectives would be achieved without a wider conflict, even though escalation may be China's response.

Contrast this with Ukraine, the best example of salami tactics today. Any attempt by NATO to expel Russia from Ukraine militarily would require a massive escalation of an ongoing conflict, carrying immense risk and with great uncertainty over whether the core objective would be achieved.

These distinctions are important, as framing China's actions in the SCS as 'salami tactics' will lead to ineffective policy responses. Accordingly, our apprehension of China's strategy in Asia needs rethinking.

At risk of oversimplification, the respective grand strategies of the major powers may be summed up as follows: The United States plays poker, the Russians chess, and the Chinese — Go.

Poker is based on ambiguity and incomplete information. To that end the nuclear age was made for the Americans. In Europe, the US convinced the Soviets they held pocket aces and would go all-in to defend Europe. This seemed credible. After all, the loss of Western Europe would pose such an existential threat to America that a nuclear war could be initiated to prevent it. To sell the message, the US barrelled the pot with forward deployed bombers and artillery units. The bet was never called, and the Russians ultimately folded.

But this doesn't work in the Asia Pacific. It's hard to sell the idea that China's expansion in the South China Sea poses an existential threat to the US, and distant offshore deterrents don't look like aces. In other words, if the Americans go all-in against China, they're going to be called.

Meanwhile, chess is for the Russians – and salami tactics is for chess players. That is, to play a closed game, gain space through positional play, and gradually improve your freedom of action at the expense of your opponent.

But the Chinese are not playing chess, they're playing Go. The vast majority of China's land borders have been settled, while Beijing rapidly lays stones in the SCS. Given the asymmetric objectives between China (gaining territory) and the US (preserving the existing order), 'flexible response' approaches will not be effective.

So how should the US respond to China's advances in the South China Sea, preferably without hegemonic war?

The US must adjust its strategy and build its own islands in the South China Sea. This has multiple advantages over alternative courses of action, and is the only option likely to be effective long-term. Indeed, it is probably the only response that China will understand.

In the wake of the PCA ruling, now is the perfect time. Washington should undertake land reclamation on behalf of the Philippines, and do so under the auspices that the matter has been settled under international law.

No doubt many will advocate other approaches being exhausted first but, just as with Go, by the time the danger becomes obvious it may well be too late. At which time, America will be praying that its weak 7♠ , 2♥ holding somehow manages to win.

Photo courtesy of Flickr user John Goode

The PCA ruling, Australia and Timor-Leste

Published 20 Jul 2016 16:38    0 Comments

The Hague tribunal decision last week in the South China Sea case will have far reaching implications, finding that any ‘historic rights’ China claimed within the Exclusive Economic Zones (EEZ) of other states were extinguished by UNCLOS itself, and China's subsequent ratification of the treaty in 1996. 

Despite some claims to the contrary, China’s stated refusal to accept the decision does not signal that the UNCLOS framework is unsuitable to solving complex maritime disputes. On the contrary, as Robert Beckman, head of the Ocean Law & Policy Programme at the NUS Centre for International Law argues, this authoritative decision will likely influence government legal advisers and negotiators for years to come.

While some commentators now urge consideration of ASEAN as the multilateral body to address the dispute via negotiations, Beckman considers the decision to be a ‘game changer’ likely to reinforce the current positions of ASEAN parties to the South China sea dispute, including Indonesia, which can now be expected to assert that the decision applies to their own EEZ claims. As such, evolving international jurisprudence will clearly frame and delimit any future multilateral or bilateral negotiations. This highlights the reality that while negotiations will always be a vehicle for settling boundary disputes, such negotiations should take place within the framework of international law.

While China has said that the Tribunal had no jurisdiction, the process was not entirely one-sided. The Tribunal was at pains throughout to ensure that China was informed via its embassy to The Netherlands. China also made its positions known throughout the proceedings in a variety of ways, and the Tribunal openly stated that it factored China's positions into its deliberations. It is too early to conclude definitively on the impact of this landmark decision, as China needs to be given time to absorb and reflect upon the findings. China will have to decide if it wants to be part of the rules-based order that UNCLOS frames, as its ratification of treaty and its stated positions and actions in international fora have often suggested.

Timor-Leste has been quick to note that Foreign Minister Julie Bishop’s call for China to respect an international rules-based order is at odds with Australia’s persistent refusal to negotiate maritime boundaries with Timor-Leste. This refusal was made more complete by Australia's withdrawal from the UNCLOS dispute mechanisms shortly before the restoration of Timor-Leste's independence in 2002. This move was clearly an effort to avoid the increasingly strong presumption of a median line boundary in international law. The Australian government is playing a two-step on the issue, urging China to respect international law describing the verdict as 'final and binding' while refusing to abide by an independent umpire in maritime boundary dispute with Timor-Leste. If Australia wants to model good international citizenship to the region, it should reinstate its recognition of the jurisdiction of the International Court of Justice, and the International Tribunal of the Law of the Sea, for maritime boundary delimitation. [fold]

While Stephen Grenville urges the South China Sea parties along the path of negotiated settlements like CMATS, the 2006 treaty, which seeks to delay a maritime border determination for 50 years, is hardly a model for the rest of the world to follow. CMATS remains inoperative as a resource sharing agreement, some nine years after its signing. Timor-Leste considers CMATS void due to its claims that Australia spied on its negotiation team in 2004, and is therefore tainted by bad faith. 

On 11 April Timor-Leste initiated a compulsory conciliation under UNCLOS that Australia has no choice but to go with, although the determination will be non-binding, and Australia is challenging jurisdiction. For these reasons, CMATS can hardly be held up to China and other claimants in the South China Sea dispute as a model for problem solving. It is not clear why The Philippines would heed Stephen Grenville’s call to follow the CMATS model and jointly develop resources with China, when such resources are within their exclusive economic zone under international law. Closer to home, it is also possible that ASEAN could in future take a position on the Australia-Timor-Leste dispute that will not please Canberra.

Despite the Australian government’s reaffirmation of CMATS in the wake of the UNCLOS decision, the Opposition's recent commitment to revisiting a maritime boundary in line with international law, and submitting to arbitration if it cannot be resolved, demonstrates how fragile this aspect of Australian regional foreign policy now is, lacking bipartisan support. This was probably the only major foreign policy difference between the two major parties. In light of the close election outcome, DFAT and its defenders can no longer pretend this remains a settled position of the Australian state.

As Beckman concludes, states concerned with the importance of a rules-based order for the oceans will emphasise that the award is final and binding, and call on China to act in accordance with it. We have already seen this position reflected in Minister Bishop’s comments. But he also notes that states calling on China to abide by the decision will appear hypocritical if they do not 'first reflect on the implications of the award on their own claims and activities’.

Photo Jefta Images / Barcroft Media / Barcroft Media via Getty Images

More heat than light in Australian FONOPs debate

Published 20 Jul 2016 08:30    0 Comments

Australia’s febrile domestic politics produced another petty point-scoring moment after the shadow defence minister, Senator Stephen Conroy, sought political mileage from last Tuesday’s historic South China Sea arbitration

Senator Conroy criticised the government for not sanctioning Freedom of Navigation of Operations (FONOPs); in response, Foreign Minister Julie Bishop slapped Conroy down for unnecessarily raising tensions on a delicate matter. Bishop did, assert however, that Australia would continue to exercise its rights of freedom of navigation in the South China Sea ‘as it has always done.’

So what has The Hague ruling changed in terms of freedom of navigation? 

On the one hand, it does not, as ANU military law specialist Professor David Letts argues, change the ‘fundamental basis for ships operating in the South China Sea’. The United Nations Convention on the Law of the Sea (UNCLOS) has always permitted vessels to transit through high seas, Exclusive Economic Zones (EEZs) and territorial seas, noting that transit through territorial seas is conditional on not undermining ‘the peace, good order or security of the coastal State’. These rights haven’t changed. Moreover, Australian governments have never recognised China’s nine-dash line claim as limiting the right of its vessels, military or otherwise, to travel through the high seas in the South China Sea. 

On the other hand, it is now clear that the nine-dash line can never be the legal basis for China to seek to regulate movement in the South China Sea, should it have ever contemplated this, (as, for example, through the declaration of an Air Defence Identification Zone). It is also clear that very few of the Spratly features (whoever owns them) generate territorial seas or EEZs. The tribunal found that nearly all were, in their original state, too insubstantial to generate maritime zones. The waters around them, barring where the EEZs of the Philippines and Vietnam protrude, are effectively the high seas. [fold]

The Conroy-Bishop spat is essentially two people talking past one another. Bishop’s version of a FONOPs appears to refer to any Australian military navigation through the South China Sea. Conroy’s notion appears to be an operation a la the US FONOPs program, which deliberately and specifically challenges the coastal state’s interpretation of its rights where these are believed to be excessive. For him, just traversing the South China Sea is insufficient. He is proposing, for example, that our forces pass within 12 nautical miles of a Spratly artificial island while conducting an activity that discounts it from being innocent passage. Under UNCLOS, this could be a military exercise, weapons practice, intelligence collection or launching of a helicopter. This would show that Australia does not recognise that the artificial island generates a territorial sea.

Prime Minister Malcolm Turnbull and opposition leader Bill Shorten are further avoiding these legal issues by saying that where our platforms go and what they do are operational matters that they don’t comment on. This is a nice dodge, but it’s clear that where our forces go and what they do in the South China Sea has legal, strategic and international ramifications that are not just matters for the military.

Still, it is unlikely that Australia’s politicians will be pulled up on these legal niceties, either in Australia or by China. Even before the judgment, China’s Global Times made clear that while China’s elites know UNCLOS chapter and verse, they aren’t that fussed about 12 nautical mile limits; their beef is that they see US warships in the vicinity of their island-building efforts as ‘harassing’ China, regardless of the legalities. This is another case of ‘ships passing in the night’. China is more concerned about the presence of the US in its sphere of interest than about adherence to international law. Its worldview of international law is possibly different to that of the West; as I argued recently, China’s history may have led to a pragmatic rather than normative embrace.

So which of Bishop’s and Conroy’s approaches to FONOPs make the best policy for Australia? While there is substantial public support for FONOPs (the 2016 Lowy Institute Poll found 74% of Australians were in favour of Australia conducting such operations in the South China Sea), it certainly seems sensible for Australia to take a low key approach for the moment. We need to both avoid inflaming tensions and get a sense of how the ruling is going to shape the region before acting further. Bishop’s minimalist take (that Australia will keep doing what its always done in accordance with international law) is canny, and puts the burden of escalation on China. Avoiding very public FONOPs is less likely to provoke a reaction from China, because China’s interests in the South China Sea are very much about projecting to domestic audiences that China’s government is reclaiming Chinese sovereignty and returning China to greatness.

The question might be asked, however; why bother doing low key FONOPs if these do not convey a message? One reason is that Australia’s leaders are subject to legal advice that says that Australia must continue to practice freedom of navigation or else see customary law evolve in a direction in which would not allow Australia free transit through the South China Sea. But this leaves the job of promoting the merits of a rules-based global order largely undone.

This is where Conroy’s approach has merits. He wants to convey our support for the rules-based global order in a very tangible way. Promoting the importance of international law is clearly something that is very much in Australia’s interest. My colleague Danielle Cave and I have advocated that Australia’s public diplomacy could do more here. Australia shouldn’t assume that international law and UNCLOS have much sway in countries of our region. Rule of law and separation of powers have very shallow roots in many of these nations. The job here is to persuade our neighbours that a region where international law prevails is one in which peace and security is more likely to endure for all, large and small countries alike.

Bishop has made a start in this direction by drawing attention to the reputational costs that China will face if it ignores the ruling. Here time is not on China’s side. Although the ASEAN and South East Asian response has been muted at this point, it is likely that over time the ruling will be repeatedly raised and will provide an unwelcome distraction for China’s leadership. Because of the permanence of borders and maritime rights in the South China Sea, defying international law is likely to be more burdensome for China than the comparative case, the US’s defiance of the outcome of the 1986 International Court of Justice case

US support for military action against the Sandinistas in Nicaragua was ultimately forgotten and made irrelevant by the changing political times, including the end of the Cold War. The same is not likely to occur in the South China Sea.

Photo: Getty images/Stefan Postles

South China Sea ruling sweeps away diplomatic ambiguities

Published 19 Jul 2016 10:28    0 Comments

Editor's note: We mistakenly published an earlier version of this article. This is the corrected text.

Tuesday’s ruling by the International Tribunal on the Law of the Sea has bought a little clarity to the problems in the South China Sea, but it has not made solving the underlying problems significantly simpler.

In a bad day for China, the Tribunal ruled that Beijing’s ‘nine-dash line’ (its claim to between 60% and 90% of the waters of the South China Sea) had no legal basis because China’s claims of ‘historic rights’ to the waters of the Sea had been rendered invalid when it signed the United Nations Convention on the Law of the Sea. The judgement went on to say that none of the Spratlys, a chain of reefs and rocks at the southern end of the South China Sea where China has recently built seven installations, were 'islands' and therefore did not generate any territorial or economic rights regardless of who occupied them. China also came in for further criticism over both its policy of blocking Philippine fishermen from plying their trade, and for its island building, which the Tribunal said had caused ‘severe’ environmental damage.

Philippine fishing crews prepare for an expedition to waters off the contested Spratlys, July 2016 (Photo: Getty images/Jes Aznar)

But although the ruling is a significant win for the Philippines, it is unlikely to have any immediate effect on the ground (or water). After the ruling, Beijing re-iterated its stance that the Tribunal had no jurisdiction and  therefore ‘the award is null and void and has no binding force. China neither accepts nor recognizes it.'

How China reacts in the coming days will be a test not just of the ruling, but also of Beijing’s broader willingness to subscribe to a rules-based order. Flouting the judgement would not only undermine the international legal system that has provided a framework for China’s rise, but it would also push the other claimants further into a corner. If they cannot negotiate an equitable solution and there is no longer an option of effective legal recourse, they are left with a binary choice of accepting that they are going to lose maritime territory they regard as integral to their national status (and in doing so losing legitimacy with their domestic constituency), or fighting. [fold]

But triumphalism on the behalf of the Philippines, other claimants or the US, let alone any attempt to impose the ruling by force, would be equally unhelpful. China has already lost face; amplifying the humiliation would be to invite retaliation and a new downward spiral in relations.

Tuesday’s verdict has drawn a legal line in the sands of the South China Sea, but it has also swept away the soft ambiguities that prevented diplomatic friction from turning to conflict. The ownership and fishing rights within the Philippines exclusive economic zone are no longer disputed, but that has created a potential collision course between Manila’s legal right to evict foreign settlers and arrest illegal fishermen, and reality; if it tries to enforce that right there is highly likely to be violence.

The Spratlys are all or in part claimed by Brunei, China, Malaysia, Taiwan and Vietnam. Currently Vietnam has outposts on at least 21 features, the Philippines on eight, China on seven, Malaysia on five, and Taiwan on one. Unscrambling the facts on the water, or finding an equitable way to cohabit, will take more than a court ruling.

Although yesterday’s award is unlikely to be the end of disagreement, if handled properly it could be the beginning of realistic negotiations. For all China’s refusal to recognise the award, it will carry moral weight that will go some way towards reducing the power asymmetry in talks about the future of the islands. 

But given the complexity of the overlapping claims between South East Asian littoral states, a series of bilateral negotiations between China and the other claimants is unlikely to lead to a sustainable solution. The natural counterparty to negotiations would be the Association of South East Asian Nations (ASEAN). Four of its members are claimants, and China’s nine-dash line overlaps with Indonesia’s claim of an Exclusive Economic Zone around the Natuna Islands. 

It is clear, however, that ASEAN is not yet ready to play this role. It is riven by differences (some of them encouraged by China) and currently lacks the negotiating capacity. But the infrastructure is there. With sufficient political will in South East Asia’s capitals, ASEAN could become a credible representative for the claimants.

The longer the search for a solution is delayed the harder it will be to achieve. Slowing regional economies are being mirrored by rising nationalism, and the political cost of the compromises that will be necessary for peace is rising with it. Even if Beijing wanted to compromise on its claims in the South China Sea, it will face a concerted domestic backlash from the shrill and powerful nationalist lobby that sets the pace in foreign policy debates.

The Tribunal’s decision has presented an opportunity to break the diplomatic stalemate in the South China Sea, but the hard work lies ahead. If a solution is to be found, all sides will have to demonstrate flexibility and an ability to manage their own domestic constituency.

Shaping China’s response to the PCA ruling

Published 18 Jul 2016 17:02    0 Comments

China’s national pride as well as its ambitions to exert control over the South China Sea were dealt a heavy blow by the 12 July decision of the Permanent Court of Arbitration in The Hague in the case filed by the Philippines. As expected, Beijing firmly rejected the ruling, declaring the award null and void with no legally binding force. In a string of official statements, including a new White Paper, China reiterated its positions and warned that it would decisively respond to any provocations against Chinese interests in the South China Sea. In a sharp rebuke to Foreign Minister Julie Bishop’s call for China to abide by the verdict and her assertion that Australia would continue freedom of navigation exercises, China’s foreign ministry spokesman cautioned Australia against treating international law as a 'game' and threatened that unwelcome actions by Canberra could result in a setback in bilateral relations

Beijing’s policy response to the ruling is not yet clear, however. After venting its anger and shoring up the legitimacy of the Communist Party by pledging to the Chinese people that the CCP will protect and defend the country’s sovereignty and territorial integrity, Xi Jinping will likely review his country’s approach to the South China Sea disputes. The result will be either a decision to double down on its assertive and coercive actions, or to revise its South China Sea strategy in favour of a more accommodating approach.

If Xi opts to double down and forge ahead with Chinese efforts to control the sea and air space in the South China Sea, tensions will increase along with the attendant risk of military conflict.

China could land fighter jets on its three new airstrips in the Spratlys and further militarise the artificial islands it has built by dredging sand from the bottom of the ocean. In contravention of the ruling and the UN Convention on the Law of the Sea (UNCLOS), China could draw straight baselines around the Spratlys as an island grouping and declare internal waters, territorial sea, exclusive economic zone and continental shelf. An Air Defense Identification Zone could be established mirroring vast China’s nine-dash line claim. In what would be an especially provocative move, Beijing could proceed with an apparent plan to dredge and build another military outpost on Scarborough Shoal, only 123 miles from the Philippine island of Luzon. In addition, the Chinese could continue their unlawful behavior of interfering (through use of Coast Guard vessels, imposition of fishing regulations, etc) with foreign fishing boats and exploitation of energy in portions of the South China Sea where China claims 'historic rights.'

Alternatively, Xi Jinping could decide to gradually adjust China’s policy, comply with parts of the ruling, and seek accommodation with the neighborhood. [fold]

For example, China could negotiate an agreement with the Philippines that allows fishermen from both countries to fish within the territorial waters of Scarborough Shoal. This would be a true win-win: Beijing could highlight the agreement as vindicating its long-standing preference for bilateral diplomacy and Philippine fishermen could return to securing their livelihood in the waters from which they have been excluded for more than four years. China could signal that it will not prevent Manila from exploiting oil and gas fields at Reed Bank. Beijing could stop declaring annual no-fishing zones in the Paracels and refrain from harassing Vietnamese fishermen. Future activities on Chinese-built islands in the Spratlys could be strictly limited to provision of public goods, the absolute minimum necessary for self-defense. China could refrain from dredging new islands. Cooperation between China and ASEAN could advance with an agreement on applying the protocols and procedures under the Code of Unplanned Encounters at Sea (CUES) to regional coast guards and the conclusion of a legally binding Code of Conduct.

An escalatory response by China is more likely if Beijing feels cornered by the US and its allies. For this reason, it is essential that the Philippines be humble in victory and that other countries resist the temptation to shame and isolate China. It is unnecessary (and incorrect) to humiliate Xi Jinping by declaring that China’s nine-dash line is invalid. The ruling has left open the possibility that the nine-dash line can endure as a representation of China’s claim to sovereignty over land features and maritime entitlements permitted under UNCLOS.

What the US and Australia should do

Washington and Canberra should strongly support dialogue between Beijing and Manila to work out their differences. We should also encourage other countries to exercise self-restraint and ensure that their law enforcement vessels and fishing boats abide strictly by UNCLOS to deny China any pretext for future violations.

Freedom of navigation operations (FONOPS) in the South China Sea should continue, but their timing and conduct should be carefully considered. Moreover, such missions should be carried out quietly, without fanfare. If the details of a US FONOP are leaked to the media, the Pentagon should simply state that the operation was a routine enforcement of freedom of navigation and overflight, and was not intended to challenge Chinese sovereignty. If Chinese rhetoric and actions over time indicate that Beijing is not making 'excessive claims' to maritime jurisdiction that are inconsistent with 'high seas freedoms' under UNCLOS, such FONOPS may no longer be necessary.

The next US administration should make it a priority to seek Senate ratification of UNCLOS. Centering US policy toward the South China Sea on a rules-based order has proved correct. The contradiction, if not hypocrisy, of the US insistence that China abide by the Convention while the US refuses to accede to it is evident, and undermines US moral authority. If the principles and practices embodied in UNCLOS are critical to American interests, then the US should ratify the Treaty.

Now that the ruling has been issued, the South China Sea disputes will enter a new phase that contains both challenges and opportunities. Fortunately, the upcoming ASEAN Regional Forum meetings and the G20 Summit in September, which Xi Jinping is hosting and wants to be a resounding success, provides a respite. The US, Australia, and other like-minded countries should actively seek to use the next few months to help facilitate a shift in Chinese policy toward the South China Sea that is based on accommodation with its neighbors and conformity with international law.

Photo by VCG/VCG via Getty Images

An inevitable precedent: Where states stand on the South China Sea ruling

Published 18 Jul 2016 14:48    0 Comments

By Nicholas Welsh, an intern in the Lowy Institute's International Security Program.

As the dust begins to settle after the Permanent Court of Arbitration's landmark ruling on Tuesday, many countries find themselves in the unenviable position of deciding whether or not to take sides. From the outset however, it is important to understand that 'choosing sides' in this particular case is not simply about siding with China's maritime territory claims or those of the Philippines (often portrayed as the 'US side'). 

Beyond the strategic and economic impacts of classifying features as rocks instead of islands, this case will set a precedent for many international dispute resolution cases for years to come. One side argues that the ruling of the tribunal is legally binding; the other that the entire procedure is illegitimate and void. With no enforcement mechanism (apart from international pressure) debate is now raging; not between China and the Philippines, but between those in support of multilateral international law structures and those who consider them invalid.

Following the ruling, state-run newspaper China Daily published a front-page map of the globe (reproduced above) highlighting an overwhelming global support for China's position, with more than 70 nations calling for bilateral negotiation in favour of arbitration as a dispute resolution mechanism. Such a high degree of support, by extension, justifies China ignoring the ruling as 'null and void'. The same map indicates that only five nations consider the tribunal's ruling to be legally binding, suggesting a distinct lack of faith in international organisations and international law as a concept. 

While the publication is a clear and fascinating example of state media bias, it does raise an interesting question: where do the world's nations stand now that the ruling has been handed down? Does China's claim of 70 supporters hold up to scrutiny, and are only five countries truly supportive of the tribunal as a means of dispute resolution?

At the risk of ruining the suspense, the short answer to both questions is no. [fold]

The Asia Maritime Transparency Initiative (part of the Center for Strategic and International Studies) released in June what it calls the 'Arbitration Support Tracker', which analysed publicly available official statements in order to determine where each country stands. According to this data, prior to the ruling 10 countries had publicly confirmed their support while 47 others released no statements that confirmed they backed China. Of these, 21 are members of the Arab League. China claims the League released a joint statement supporting China following the Seventh Ministerial Meeting of the China-Arab Cooperation Forum, though this statement does not appear to be publicly accessible. Another four nations denied China's claim of their support (Cambodia, Fiji, Poland and Slovenia).

Also missing from China Daily's map is a strangely silent 'normative power'; the EU. Its apparent lack of support for UNCLOS comes as some surprise, particularly considering that almost five months earlier, the EU released a statement calling on all parties to resolve disputes 'in accordance with international law including UNCLOS and its arbitration procedures', a declaration with which Albania, Bosnia and Herzegovina, Liechtenstein, Moldova and Montenegro also aligned themselves. 

Now, almost a week on from the tribunal's ruling, the numbers paint a very different picture. Of those 57 who (supposedly) challenged the legitimacy of the process, three have spoken up to reject the ruling: China, Taiwan and Pakistan. The remaining 54 supportive nations have, thus far, refrained from publicly challenging the ruling. In comparison, 34 nations have publicly called for the ruling to be respected, with a further four acknowledging the ruling positively without supporting its binding nature.

Global support for China's right to ignore the tribunal is not as widespread as state-media would depict, but the lack of any enforcement mechanism in the ruling makes the next step for any nation uncertain. For all countries, whether staying mute or pledging support one way or the other, it is important to look beyond the traditional geopolitical sphere to the larger picture, and for nations to speak up in favour of the world system they want to see in the future. If states believe in a multilateral rules based order, then support for the tribunal and its ruling needs to be made clear. Multilateralism and third-party dispute resolution is not always the answer, but it needs to be available as a legitimate and credible option available to states in deadlock. How states react to this ruling will set a precedent regardless, and it is in everyone's interest that this precedent be as clear and as peaceful as possible. 

Image source China Daily via Hindustan Times

South China Sea ruling: India takes a stand

Published 15 Jul 2016 14:57    0 Comments

The South China Sea dispute verdict has been delivered in favour of the Philippines, and the infamous 'nine dash line' now has no basis in international law.

Without taking sides on the dispute, India has chosen to take a stand on the principle and application of international law, issuing a statement that said: 'As a State Party to the United Nations Convention on the Law Of the Sea (UNCLOS), India urges all parties to show utmost respect for the UNCLOS, which establishes the international legal order of the seas and oceans.' The statement indicates that New Delhi recognises the ruling from the Permanent Court of Arbitration (PCA) and will uphold it. 

In the days leading up to the ruling, there was much debate in New Delhi as to whether India should take a stand on this issue at all. Choosing to stay quiet on the matter was never an option, but India could have issued a statement to the effect of 'all parties should resolve the matter in a peaceful manner'. India's choice wasn't about picking sides, but about voicing concerns at a defining moment which could very well form the foundations of a new security architecture in the region. The course of China's subsequent actions and responses from around the region will set a precedent for future disputes. 

India's decision to take a stand, and the tone of the message, was calculated. The statement focuses more on the need to respect international law; it is not a position on China or the Philippines, or on the South China Sea for that matter. [fold]

India is not a party to the disputes, but has higher stakes in this matter than most acknowledge. Apart from an economic interest (with approximately 55% of India's trade transiting through those waters), New Delhi's political and strategic interests are very much in play. If India remained silent on the matter, it would also have undermined its past decision to accept the Tribunal's award in favour of Bangladesh in a maritime dispute. 

As an aspiring leading power, India should aim to shape the regional political discourse. It must lend its voice in creating the foundations of a new security architecture in the Asia Pacific. The Act East policy demands an increase in Indian presence in those waters, both economically and politically, and India has to deliver for its ASEAN friends, especially at defining moments like this. There is also the fact that in 2012 China ignored India's presence in an oil exploration block in Vietnam's EEZ and put it up for international bidding unilaterally, undermining both India's economic interests and Delhi's relationship with Vietnam. China has tried to create unilateral norms in waters that are critical to India's engagement with the entire region. 

Given China's vow to disregard the ruling, subsequent developments could establish new norms and practices that would clearly affect India's strategic and political interests.

China refused to participate in the proceedings brought by the Philippines, claiming both the Philippines and the Tribunal have, by entertaining this dispute, 'abused' UNCLOS provisions. China is right in claiming that the PCA has no jurisdiction in deciding disputes concerning the issue of sovereignty, but the Philippine claims focus primarily on issues pertaining to the interpretation of UNCLOS and only incidentally touch upon questions of sovereignty. Notwithstanding the Tribunal's earlier award on the legality of its exercise of jurisdiction, China continues to mischaracterise the dispute as one involving questions of sovereignty. Though the award binds China, Beijing has called for the ruling to be ignored, fully aware the Tribunal has no independent enforcement mechanism or powers. 

In its effort to render the judgment void, China has been working hard to convince the world the ruling is invalid. China's frantic campaign against the award is at odds with its public calm and disregard. This disregard toward an international tribunal makes a serious dent in its mantra emphasising a 'peaceful rise'. 

China could very well feel pressured to react in a manner that will visibly strengthen its position on the invalidity of the award. Possible actions could be a withdrawal from UNCLOS (unlikely); establishing an Air Defence Identification Zone over the South China Sea (which would be disregarded by regional players); and drawing baselines around some of the islands or building new islands entirely (which would be met with legal and diplomatic protests from other claimants). 

China is also likely to increase its presence (militarily and otherwise) on its artificial islands and disrupt movement of Vietnamese and Philippines military and civilian maritime vessels. It will, of course, continue to challenge every freedom of navigation operation in the area. 

Whatever actions China takes, the developments following the verdict may very well set the stage for new norms and practices affecting India's engagements with the region. Not responding to the verdict could have been disastrous for New Delhi. India's stance is not about China's rise or a reaction to Chinese actions, but a necessary step to lend its voice on a matter of principle critical to peace and stability in the region, to uphold international law and appear a credible contributor to regional security. 

Photo: Getty Images/Hindustan times

South China Sea: A course-correction needed

Published 15 Jul 2016 13:00    0 Comments

Tuesday's South China Sea adjudication demonstrates that the UNCLOS framework is totally unsuited to sorting out the complex conflicting claims in the South China Sea in a way that the relevant parties will accept. By effectively announcing the Philippines as winner and China as loser, the tribunal's finding is now the basis for empty point-scoring. There is zero chance that China will accept an outcome arrived at in this way. 

UNCLOS acknowledges the futility of this sort of process: the over-arching UNCLOS principle is that the parties involved should sort things out by mutual agreement. UNCLOS then blesses whatever they have agreed on, even if it doesn't fit precisely into UNCLOS norms. 

With the South China Sea, a complex multi-party solution will be needed rather than a few general rules-of-thumb and one-sided legal proceedings. The South China Sea disputes can't be resolved by lawyers in a distant court or some surveyor's equidistant lines on charts.

Before the disputing parties dig themselves into positions from which retreat is difficult, a different negotiating pathway needs to be opened up. The first step would be to bring all the parties together in a single negotiation forum. The obvious grouping is ASEAN and China (but not Taiwan, as it just raises too many side issues). ASEAN hasn't had the unity or resolve to do this so far and China has worked to keep its dealings on a bilateral basis. But with Indonesia now feeling pressured by China in the Natuna Sea and China rebuffed in The Hague, there just might be the chance for ASEAN to seize the initiative. If this really is an important issue, the core ASEAN countries can't let the weak peripheral members dictate continuing irrelevance. [fold]

What would be the basis of this 'Outside-UNCLOS' framework? The starting-point is a recognition that 'win-win' is better than a contest with a winner and a loser. Economics can provide this win-win. The key is to seek out opportunities for economic collaboration rather than make futile efforts to draw definitive borders. The first element might be to postpone attempts at border demarcation until later – much later. The second is to identify the many economic opportunities which would arise if the area is not actively contested and to seek opportunities for joint development. These could be in fishing (sorting out the illegal fishing and sharing the area equitably), petroleum joint ventures, and undersea pipes and cables which become feasible and profitable when areas are developed jointly. Seabed and water column could be divided up or shared in innovative ways, which delivers something for each of the contesting participants. Revenue from petroleum exploitation could be divided between the relevant parties by negotiation. China's engineering expertise can find an outlet in these projects. The ADB and AIIB could provide favoured funding, recognising the many beneficial externalities that would result from joint projects. The local marine environment, under great threat, could be a big winner.

Working together, all parties would have some interests at stake which would be lost if they decide to go it alone. Each has to feel that the deal is more beneficial than the traditional confrontation, in which any economic development in the area will be contested physically and diplomatically. 

Does this sound a bit like the state of play in the Timor Sea? At the time when the CMATS Treaty was agreed in 2006, it was seen by both Australia and Timor-Leste as a way of moving forward to reap the economic benefits in the disputed area (in particular, proceeding with Greater Sunrise gas), with a revenue sharing that reflected negotiation rather than geography. Seabed was separated from water column (as it had been earlier with Indonesia), contrary to UNCLOS norms but allowing each country to have an ongoing interest in the disputed area. Maritime boundaries were put on hold for fifty years. 

Since then, Timor has become disenchanted with the Treaty, and strong nationalist feelings have put the benefits offered by CMATS beyond reach. But the historical precedent is there: countries can sit down and hammer out complex agreements well beyond the scope of UNCLOS. The key is to shift the negotiating priority away from delineating borders and towards the economic benefits that lie on the seabed and in the waters, waiting to be shared.

Photo: Getty Images/VCG

Advantage Vietnam: The PCA ruling impact on Hanoi-Beijing relations

Published 14 Jul 2016 12:00    0 Comments

China and Vietnam have reacted very differently to the Permanent Court of Arbitration ruling on the South China Sea. While China's Ministry of Foreign Affairs has declared the PCA award should be 'null and void', in Hanoi it was welcomed. The PCA ruling will give the Vietnamese government extra leverage in its dealings with the Chinese however, given China’s economic and political weight in Vietnam, Hanoi will proceed carefully.

Vietnam, along with Malaysia, Brunei, Philippines and Taiwan, has been directly impacted by China's claims to sovereignty over various groups of rocks, islets, islands and reefs and their corresponding Exclusive Economic Zone. China's famous 'nine-dash line map' of claimed territory encompasses most of the South China Sea meaning all of these countries believe their own EEZs and traditional fishing areas are being overlapped by Chinese-controlled territory.

While China wants to deal with each of the claimant countries bilaterally, they prefer to solve the conflict using multilateral resources. Accordingly, in 2013, Philippines filed its case with the UN's PCA, arguing Beijing’s occupation of Scarborough Shoal (a few hundred miles West of Manila) invaded Philippine sovereign territory, and didn’t allow Philippine economic activities in the area. The court, applying the United Nations Convention of the Law of the Sea (UNCLOS), has unanimously ruled that China has no historical grounds for its claim, challenged the 'nine-dash line', and condemned Chinese construction of artificial islands on political, geographical and environmental grounds. Beijing has stated that the court has no say in the conflict and the verdict will be ignored.

The ruling from The Hague is unequivocally good news for Vietnam. If Hanoi should decide to file a similar case against China in relation to the Paracel and Spratly Islands, a similar verdict could be expected. However, this would be seen as provocative. Joshua Kurlantzick, senior fellow for Southeast Asia at the Council on Foreign Relations (CFR), believes Vietnam needs to keep China close, and for that reason, it won't follow the Philippines precedent. [fold]

Another reason for Vietnam to exercise its new leverage with caution is the widely expected increase of tension in the area. After Beijing’s rejection of the verdict, Chinese vessels (of the military, paramilitary and economic kinds) will continue to patrol the region. Some of these activities may be perceived as provocations by actors in the area, including non-claimant states such as Indonesia and the US. Although the Obama administration doesn’t officially support any individual claims, it has repeatedly asked for guaranteed freedom of navigation and flight in the region, and it has military units deployed in the area. If, as widely expected, China doesn’t comply with the ruling, American units may engage in assertive manoeuvres, particularly if Beijing proceeds with the development of Scarborough Shoal.

One effect of the ruling could be a tightening of ties between Vietnam’s new government and China’s rivals in the region. Japan, India and ASEAN countries such as Indonesia now have a solid foundation from which to support Hanoi’s position in the South China Sea. In relation to the US, some observers, including Peter Navarro, author and business professor at the University of California-Irvine, believe Vietnam is trying to move closer to the US. Certainly Barack Obama’s visit to Vietnam in May, that marked the end of the weapon blockade that the White House had kept on the Southeastern Asian nation, did not go unnoticed in Beijing.

And yet Beijing will continue to exert considerable influence over the elite in Hanoi. Nguyen Phu Trong’s conservative cabinet is not naturally inclined to respond to Western influence, and the importance of  trade with China to the Vietnamese economy will influence what happens next. Nguyen Khac Giang, senior political researcher at the Vietnamese Institute for Economic and Policy Research (VEPR) is among those who believe Vietnam’s political elite will seek to maintain the status quo with its northern neighbour.

The Vietnamese Ministry of Foreign Relations is expected to offer an official assessment of the ruling. While this is likely to continue to express satisfaction, the Vietnamese representative is expected to use a restrained tone, similar to the Philippine foreign secretary, Perfecto Yasay Jr who asked for 'all those concerned to exercise restraint and sobriety.'

Vietnam knows it has obtained a powerful weapon, but is also aware it must be handled carefully.

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