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Was arbitration on the South China Sea dispute a waste of time?

On 12 July the Permanent Court of Arbitration (PCA) in The Hague issued its ruling on the case brought by the Philippines against China over competing territorial claims in the South China Sea (referred to in the Philippines as the West Philippine Sea). As expected, the tribunal found overwhelmingly that there is no legal basis to China’s ‘historic’ claims to the ocean, parts of which are also claimed by Malaysia, Vietnam and Brunei.

China has not participated in the arbitration process, which began in 2013, and has consistently maintained its stance that the PCA has no jurisdiction over territorial disputes, which should instead be resolved bilaterally. In response to the ruling, China blocked information domestically and even rented a screen in New York’s Times Square to air a three minute video on their position 120 times per day.

A historic decision

The PCA award is a 501 page document which addresses the 15 separate submissions made by Manila. Although often mistakenly presented as such, the PCA does not have the jurisdiction to rule on matters of sovereignty. Rather, it rules on whether acts carried out by China, including island building and militarising reefs, are lawful under the United Nations Convention on the Law of the Sea (UNCLOS), to which both China and the Philippines are parties.

One of the most important provisions in UNCLOS relates to Exclusive Economic Zones (EEZs). The Convention provides that islands enjoy EEZs that extend 200 nautical miles from their coastline, whereas uninhabitable rocks do not. The Convention also states that reefs which are above water at high tide enjoy a sovereignty entitlement of 12 nautical miles. In a region estimated to have 11 billion barrels of untapped oil, EEZs are hugely important.

China has long claimed ‘historic rights’ to the area encompassed within its ‘nine-dash line’, which overlaps areas claimed by many other states. Since the arbitration process began, China has been carrying out a concerted island-building effort, raising land above sea level and stationing official personnel on uninhabitable rocks in an attempt to show they are capable of generating an EEZ.

As expected, the PCA decision found that China’s claim to the South China Seas has no legal basis. It also held that rocks, reefs and islands must be assessed as they were in their original, natural state. It found that Chinese constructions in the Spratly Islands are naturally uninhabitable and incapable of generating their own EEZs. Overall if all parties recognised the validity of the PCA decision, there would be no overlapping claims to the South China Sea.

ASEAN the main casualty?

Although the decision is undoubtedly a blow to China’s international reputation, the PCA has no enforcement mechanisms. Thus, it remains to be seen whether the ruling will change anything.

So far it seems the most significant consequence of the decision has been increasing division within the Association of South East Asian Nations (ASEAN). As four out of the ten ASEAN members are claimants in the dispute, there is a strong interest in a peaceful resolution of the issue.

ASEAN has a combined population of 626 million and an economy of $2.4 trillion, putting the group in a far stronger negotiating position with China than if its members were to negotiate bilaterally. However, internal divisions within ASEAN have consistently prevented it from presenting a united front on this issue.

At their first meeting since the ruling was issued last weekend, ASEAN foreign ministers met with China’s Foreign Minister Wang Yi and US Secretary of State John Kerry in Vientiane. All eyes were on the wording of statements to be released after the meetings: how would they deal with the elephant in the room?

Ultimately, a joint statement and a joint communique were issued. The communique notes concern by ‘some Ministers’ who are ‘seriously concerned’ and stressed ‘the importance of non-militarisation and self-restraint’ in the region. No mention was made of the PCA decision.

Stronger language was objected to by Cambodia, which echoes China’s position on the issue. As ASEAN relies on consensus, each state effectively has veto power—a common cause for contention between the grouping’s wealthier members and its more recent additions, which are more heavily reliant on Chinese investment. China has publicly thanked Cambodia for ‘safeguarding impartiality’ on the issue and also announced grant aid of over half a billion dollars just after the PCA decision came down.

Timing is everything

The global landscape has changed significantly since Manila first filed its case before the PCA in 2013. A number of current factors will influence the long-term impact of the decision.

Firstly, Laos’ 2016 chairmanship of ASEAN has undermined the unity of the body. Although the rotating chairmanship is merely symbolic in many ways, it is nonetheless poor timing that the PCA’s decision would be issued while the bloc is chaired by Laos; a nation of less than seven million, heavily beholden to China. Should the leadership have fallen to one of the claimant states this year, it's hard to imagine the conversation would not have been more persuasive.

Another significant and unforeseeable change has been the recently elected and highly controversial Philippine President, Rodrigo Duterte. After years of consistent campaigning for arbitration from the previous Aquino government, Duterte has changed tack and indicated that he would be interested in entering into bilateral talks with China.

Where to from here?

In the wake of a huge legal victory for the Philippines, bilateral talks could seriously undermine the potential for a culture of rule of law-based resolution of maritime disputes in the Indo-Pacific. With China refusing to recognise the PCA decision, however, bilateral talks may be the only way forward. Although it's hard to see China backing down from any of its territorial claims in the region, joint talks with the Philippines could prove the test case for how other states can proceed on the issue.

With domestic change in the Philippines and China’s position still resolute, there is a chance the only long-term consequence of the PCA decision will be three years work wasted and a weaker, more divided ASEAN.

Caitlin McCaffrie is the Indo-Pacific Fellow for Young Australians in International Affairs.

Image Credit: Stratman (Flickr: Creative Commons)

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