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South China Sea Arbitration: Philippines v. China

Photo: USS Ronald Reagan in the South China Sea July 5, 2016. US Navy, CC BY 2.0

The South China Sea case (Philippines v. China) has serious ramifications for both the international legal order and the political order in Southeast Asia. The judgment, issued July 12, 2016 by a unanimous five-person Permanent Court of Arbitration tribunal, found that China had violated the United Nations Convention on the Law of the Sea (UNCLOS), including that it had violated the Philippines’ rights to fish and had illegally caused grave harm to the environment. The judgment is approximately 500 pages long and contains important interpretations and applications of UNCLOS. Both the Philippines and China are Party to UNCLOS and thus are subject to both its substantive provisions and its mandatory dispute settlement provisions.

The South China Sea comprises 3,500,000 square kilometers (1,400,000 square miles) and is subject to competing territorial claims by Brunei, China, Indonesia, Malaysia, Philippines, Singapore, Taiwan and Vietnam. About $5 trillion of trade transits the South China Sea every year. It also has rich fisheries and is thought to contain vast petroleum reserves, and is of military significance as a means of passage and due to its proximity to various countries.

China has laid claim to roughly 85% of the South China Sea, i.e., the part within the so-called nine-dash line. Taiwan makes the same claim. China claims that the geographic features such as islands, rocks and low-tide elevations in the Sea, the surrounding waters and the seabed belong to it based on historical uses.

The Philippines filed the case against China in 2013 under UNCLOS in response to China’s actions, in particular its seizure of the Scarborough Shoal and exclusion of Filipino fishers from waters around it. In addition, the Philippines objected to the fact that China has built up some of the island and rocks, including through the use of material dredged from nearby coral reefs, so that some now contain buildings (including a Starbucks) and large air strips, and also to the environmental damage associated with these actions.

The tribunal ruled that there is no evidence that China historically had exercised exclusive control over the water or resources within the nine-dash line and thus that China’s claim had “no legal basis”. It reached many conclusions regarding specific geological features, concluding that many are not capable of sustaining human habitation or an economic life of their own within the meaning of those terms in UNCLOS Article 121(3), and are therefore legally “rocks” for purposes of Article 121(3) and do not generate entitlements to an exclusive economic zone or continental shelf. It further ruled that other features are low-tide elevations that generate no maritime zones of their own. However, as UNCLOS is not designed as and does not offer a mechanism for determining sovereignty over maritime features, the tribunal did not rule on actual territorial claims relating to structures or maritime features themselves.

In important environmental holdings, the tribunal ruled that China’s land-reclamation projects and construction of artificial islands in the Spratly Islands had caused “severe harm to the coral reef environment,” thus violating UNCLOS’ environmental protection provisions, and also that China’s actions had been undertaken without environmental assessment or the communication of the results of any environmental assessment in violation of UNCLOS Article 206. This holding is in line with several other holdings by international tribunals focusing on the legal necessity of conducting environmental assessment, such as the Pulp Mills case (Argentina v. Uruguay), Kishenganga River arbitration (Pakistan v. India) and human rights cases. The tribunal also held that China had tolerated and protected, and failed to prevent Chinese fishers from, harvesting endangered sea turtles, coral and giant clams, thus violating UNCLOS’ requirements to preserve and protect fragile ecosystems and endangered species.

China has consistently argued that the tribunal does not have jurisdiction over the Philippines’ claims and considers the judgment to be null and void. Taiwan, which administers “Taiping Island,” which the tribunal held is a “rock” and thus not entitled to a 200-mile exclusive economic zone or continental shelf, has also rejected the ruling. The tribunal has no enforcement powers, so it cannot force China to adhere to the ruling. It is feared that China will militarize the South China Sea by, for example, designating it an air defense identification zone.

The United States, although not a disputing party to the case and not a Party to UNCLOS, has a strong strategic interest in the South China Sea and undoubtedly was relieved at the tribunal’s rejections of China’s claims. The United States has consistently urged the disputing parties to abide by the ruling, arguing that the rule of law generally and UNCLOS specifically, require this. The United States’ insistence that the Philippines and China honor the tribunal’s judgment, while consistent with the United States’ long-standing arguments supporting the rule of law, is undercut in several respects. The facts that the United States is neither a party to the Philippines-China case nor a Party to UNCLOS arguably render its legal interest in the specific situation remote. Moreover, the fact that the United States recently engaged in blatant violations of international law prohibiting torture undermines its moral standing, at the least. In addition, the United States did not participate in the Military and Paramilitary Activities in and against Nicaragua case (Nicaragua v. United States), even after the International Court of Justice held that it had jurisdiction; there is also a frequent perception that the United States did not adhere to the Court’s ruling on the merits (the United States asserts it did). In any event, other countries have strong interests in UNCLOS and in issues regarding the South China Sea, and will undoubtedly join in the chorus that the countries should behave according to the judgment. Several – perhaps 8 – are supporting China’s position, however.

Xi Jinping’s attempt to make a massive resource-grab in the South China Sea has now been declared illegal in a carefully written judgment by a distinguished tribunal constituted in accordance with a treaty to which China is clearly a Party. China’s response will undoubtedly be affected by myriad historical and contemporary factors. Historical factors include the fact that some in China have an imperialist mind-set that China should rule large parts of Asia and have a chip on their shoulder for having been pushed around by foreign interests in recent centuries. Contemporary factors include a geopolitical need for resources in light of China’s huge population and growing economy, irritation that the United States is asserting rights and engaging in military activities right on its doorstep, and nationalist drumbeating by Xi Jinping in part to divert attention from domestic difficulties. These factors, however, do not obviate the need for China’s leaders to deal with the fact that China is now standing on a legal and political ledge of its own making.

Though the judgment deserves further analysis, several things appear evident now:

The China-United States rivalry will continue to play out in the South China Sea, but because UNCLOS is involved and the stakes are so high, other countries, including European ones, have a stake. The United States should continue to assert its rights but should do so without escalating tensions in a manner that makes its interests clear, does not ratchet up the conflict, and provides China political and diplomatic space to maneuver.

The tribunal’s judgment provides legal leverage to the Philippines, and may lead other States such as Vietnam to file similar claims; China is unlikely to overtly accept the judgment, however. The countries should be willing to negotiate (some negotiation would be necessary even if China had accepted the ruling) and presumably that will happen. Multilateral negotiations would be preferable, given the number of overlapping claims, but China prefers bilateral negotiations, presumably because of the greater flexibility to craft incentives that they afford China.

The tribunal’s attention to UNCLOS’ environmental provisions, including regarding environmental assessment, is well warranted and worth noting specially. The fact that the tribunal found that China had caused illegal environmental harm is important, both physically and jurisprudentially. The ICJ, though citing international environmental law principles, has previously seemed reluctant to find that environmental harm has occurred, as evident from the Construction of a Road in Costa Rica along the San Juan River case (Nicaragua v. Costa Rica). The tribunal here did not hesitate. Moreover, it applied UNCLOS’ requirement for an environmental assessment in a sensitive, meaningful way in finding a Chinese violation. The critical importance of environmental assessment to domestic and international planning (including in assessing human rights, social and economic impacts), as well as to transboundary cooperation, is beyond cavil.

A final observation is that Republicans in the United States Senate should cease their obstructionism and allow a vote on the approval of UNCLOS, with appropriate interpretations, declarations and understandings as recommended by the Senate Committee on Foreign Relations. The President should then ratify UNCLOS without delay.


Daniel Magraw is Senior Fellow at the Foreign Policy Institute and.teaches international environmental law and policy at SAIS. He has served as Professor of Law at the University of Colorado from 1983 to 1992, Visiting Scientist at the National Center for Atmospheric Research in 1989, Director of the International Environmental Law Office at the US EPA from 1992 to 2001, and President and CEO of CIEL from 2002 to 2010. Professor Magraw earned a JD degree from the University of California, Berkley in 1976.

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