THE PATH TO A JUST AND LASTING PEACE IN THE SOUTH CHINA SEA
November 10, 2016
*Originally presented as part of the 22nd Annual Timothy A. Gelatt Memorial Dialogue on the Rule of Law in East Asia: "Implications of the Philippine Arbhitration Award: An Informal Roundtable of Experts"
1. At the time the Philippines decided to institute arbitration proceedings against China under the UN Convention on the Law of the Sea, it faced a daunting challenge.
2. First, China was insisting on exclusive jurisdiction over nearly all the waters and seabed of the South China Sea, within a so-called nine-dash line, and the exclusive right to all the natural resources within that line. China’s claim extended more than 650 M from its coast, and within 50 M of the Philippines’ coast, that is, well beyond the 200 M exclusive economic zone and continental shelf to which China is entitled under the Law of the Sea Convention, and well within the Philippines’ 200 M entitlements.
3. Second, Chinese naval and law enforcement vessels prevented Philippine fishermen from fishing in the waters encompassed by the nine-dash line, and prevented Philippine licensees from exploring for oil and gas within the perimeter of the nine-dash line, while permitting Chinese nationals to carry out these activities.
4. Third, China claimed sovereignty over all of the Spratly Islands, which consist of dozens of tiny insular features, only a small number of which are above water at high tide, and which were also claimed by the Philippines, Vietnam and Malaysia. China occupied and built, or started to build, military facilities on top of seven of these features. One of them, Mischief Reef, was a low tide elevation only 120 M off the Philippines’ coast, and well within its exclusive economic zone and continental shelf.
5. Fourth, the Chinese construction activity had destroyed, and in some cases obliterated, coral reefs, previously some of the most pristine in the world, which caused devastating and irreparable harm to the surrounding marine environment, including important fish breeding and feeding areas.
6. Fifth, China forcibly excluded Filipino fishermen from Scarborough Shoal, a series of rocks jutting above the water around 100 M off the Philippine coast that is a fertile fishing area where Filipino, as well as Chinese, fishermen had exercised their livelihood for centuries. After June 2012, only Chinese nationals were allowed by China to fish at the shoal.
7. The Philippines had tried to address all of these issues with China by diplomacy. But China was inflexible. It demanded that the Philippines accept China’s exclusive rights over all of the resources of the sea and seabed within the nine-dash line, as well as Chinese sovereignty over all of the islands and other maritime features in the South China Sea. This would have amounted to a renunciation of the Philippines’ rights under the Law of the Sea Convention. Negotiations took place at various intervals over several years, always following the same script. No progress toward an agreement was, or could be, made under China’s conditions. With diplomacy frustrated, and military action out of the question, legal recourse appeared to be the only viable option for the Philippines, but this, too, posed serious challenges.
8. The difficulty facing the Philippines was how to frame a case under the Law of the Sea Convention that would accomplish two critical objectives: (1) meet the jurisdictional requirements of Part XV of the Law of the Sea Convention; and (2) obtain meaningful relief for the Philippines. There were certain obstacles to jurisdiction looming over the case. First, a tribunal established under the Convention has no jurisdiction over questions of land sovereignty. Thus, the Philippines could not challenge China’s assertion of sovereignty over the Spratly Islands or Scarborough Shoal, which represented one of the main sources of conflict. Second, the Philippines could not ask a tribunal to delimit a maritime boundary with China, because China had exercised its right under Article 298 of the Convention to exclude itself from compulsory arbitral jurisdiction in regard to sea boundary delimitation.
9. The solution, after much thought, analysis and debate, was to bring a case about maritime entitlements, rather than about sovereignty over islands or delimitation of boundaries. Maritime entitlements – that is, the entitlements to the sea and seabed generated by coastal land territory, including a 12 M territorial sea, and 200 M exclusive economic zone and continental shelf – are specifically provided for in the Convention, and thus, unlike sovereignty over coasts and islands, fall within the jurisdiction of a tribunal established pursuant to Part XV. Also – and this proved to be a critical point– entitlements can be determined without the need for engaging in the delimitation of boundaries. In fact, law of the sea tribunals must determine the entitlements of the parties to a dispute prior to and separately from delimiting a boundary, because it is only when two States’ entitlements overlap that a boundary needs to be created.
10. Our legal team was confident that by asserting claims based on entitlements, rather than sovereignty or delimitation, we would overcome China’s anticipated jurisdictional challenges, and this proved correct. Although China did not formally appear in the arbitral proceedings, it submitted to the tribunal a very well-written position paper, which the tribunal construed as a pleading, setting forth its jurisdictional objections. China’s main arguments were that the tribunal lacked jurisdiction over matters of land sovereignty and boundary delimitation. The tribunal had no difficulty in rejecting these arguments, unanimously, because, as it emphasized, the Philippines had taken pains not to raise issues of land sovereignty or boundary delimitation, but had presented its case entirely as one regarding maritime entitlements.
11. That left us with the question of whether a case about maritime entitlements alone would be enough to justify the Philippines’ recourse to arbitration, insofar as it might produce an Award that provided meaningful relief, in the form of confirmation of the Philippines’ exclusive right to enjoyment of the resources within its 200 M EEZ and continental shelf. In fact, our focus on entitlements was sufficient to accomplish this objective. Upon examination of the 200 M maritime entitlements generated by China’s and the Philippines’ mainland coasts, one can see that there is very little overlap. Except for a small area off the Philippines’ northwest coast, none of the Philippines’ 200 M entitlement is overlapped by the Chinese entitlements extending from China’s mainland coast. The Philippines thus enjoys exclusive entitlements in all of these non-overlapped areas, including the right to all the resources of the sea and seabed.
12. For that reason, the most important objective of the case, from the Philippines’ perspective, was to establish the unlawfulness of the nine-dash line claim, and limit China’s entitlements to those set forth in the Convention. The Philippines argued that, as a party to the Convention, China enjoyed all of the entitlements set forth therein, but that these did not extend beyond 200 M; therefore, any Chinese claim beyond 200 M, especially one that extended within 200 M of the Philippines, was a violation of the Convention, and of the Philippines’ rights thereunder. This seemed to us an irrefutable point, and the tribunal agreed, unanimously.
13. In reaching this decision, the tribunal carefully considered China’s claim to the waters and seabed encompassed by the nine-dash line based on so-called “historic rights” beyond those enumerated in the Convention. The tribunal found that China’s claim was unlawful on two grounds. First, after a careful review of the Convention’s text and its voluminous travaux preparatoires, the five arbitrators concluded that when States became parties to the Convention they abandoned all claims to rights in the sea – whether based on history or otherwise – that were contradictory with its provisions, and they were expressly required by the Convention to withdraw such contradictory claims. China’s claims to areas of sea and seabed beyond 200 M from its mainland coast were plainly contradictory to the Convention, and therefore unlawful.
14. Second, the tribunal found that, even under pre-Convention international law, China’s historic rights claims were invalid. Under customary law, a claim of historic rights may be lawful only if a State has exercised authority over the maritime area in question under a claim of right, continuously over a long period of time, with the acquiescence of neighboring States. China’s historic rights claim in the South China Sea satisfied none of these well-established criteria. China had never exercised authority over any maritime areas beyond those very close to its mainland coast, let alone continuously for a long period of time; and no other State had ever acquiesced to China’s authority in these areas.
15. China claimed 200 M maritime entitlements not only from its mainland coast, but also from Scarborough Shoal and the Spratly Islands, based on its alleged sovereignty over them. Consequently, an important issue in the case was whether these features were capable of generating maritime entitlements, and, if so, to what extent. This matter turned on the meaning of Article 121 of the Convention. The Article provides that islands generate the same maritime entitlements as mainland coasts, including an exclusive economic zone and continental shelf. However, there is an exception in paragraph 3 of that Article for islands that are considered uninhabitable, specifically, features that are incapable of sustaining human habitation or economic life on their own. Those islands have an entitlement only to a 12 M territorial sea.
16. Accordingly, the Philippines argued and presented voluminous cartographic, historical, anthropological and scientific evidence that neither Scarborough Shoal nor any of the Spratly Islands was habitable in its natural state, such that none of these features generated entitlements beyond 12 M. Significantly, this was the first case in which any international court or tribunal was required to interpret Article 121(3) or determine whether, and on what basis, an island should be deemed incapable of sustaining human habitation or economic life. The tribunal, which was composed of five of the most eminent and well-respected jurists and scholars in international law, delivered, as part of its Award, an extensive analysis of the Article’s text, and the manner in which it is to be applied. It came to the conclusion, again unanimous, that none of the islands in question was habitable in its natural state, and that none of them therefore generated entitlements beyond 12 M.
17. The result was that, except for the area northwest of the Philippines’ coast the entitlements generated by the Philippines and China’s mainland coast overlap slightly, and the 12 M zones of some of the small islands claimed by China, the Philippines’ exclusive economic zone and continental shelf are not overlapped by any entitlements that China could lawfully claim. On this basis, the tribunal ruled that it was unlawful for China to deprive the Philippines of the exclusive enjoyment of these areas of sea and seabed, including the living and non-living resources located there.
18. In regard to the impact of China’s island-building and other activities on the marine environment, the Tribunal retained its own independent experts to assess the harm caused by these activities. The arbitrators found that the harm caused by China was devastating and irreparable, as the Philippines had claimed.
19. In regard to fishing at Scarborough Shoal, the Tribunal found, based on the historical evidence, that both Filipino and Chinese fishermen had conducted traditional fishing activities at the Shoal since time immemorial, without interference by governmental authorities. On this basis, the Tribunal concluded that, regardless of which State is sovereign over the Shoal – a matter that was beyond its jurisdiction to decide - the fishermen of both States enjoy traditional rights to engage in the same practices that they have historically exercised. This meant that China could not continue to prevent Filipino fishermen from exercising these rights.
20. In essence, the Philippines prevailed on all of its central claims. But, as many have asked, what does this mean, if China refuses to comply with the Award?
21. This is a legitimate question, and one that reaches beyond China and this particular case. Put more broadly, the question might be phrased: what does it mean for the Law of the Sea, and for the rule of law in general, if States – especially Great Powers – refuse to comply with their legally binding obligations under treaties to which they voluntarily became parties, or with their obligations under judicial judgments or arbitral awards rendered by duly constituted and fully competent international courts or arbitral tribunals?
22. My first observation is that, given the nature of the case, it would be extremely detrimental to the international legal order for China’s defiance of the arbitral Award, if that is what China persists in doing, to be acquiesced in by the international community, and especially by the more than 160 States Parties to the Law of the Sea Convention. China’s actions, especially its insistence on enforcement of its nine-dash line and historical rights claims, have been found to violate the most fundamental principles of the Convention, in derogation of the rights of the Philippines, and by implication, those of the other coastal States along the South China Sea.
23. This is a very special Convention. It was envisioned by its framers, including China, as a constitution for the world’s oceans and seas, regulating virtually every aspect, from navigation to environmental protection, to boundaries, to maritime zones and rights to resources, to undersea cables, to deep seabed mining, and on and on. It has been one of the most successful treaties in the history of international law. It enjoys near universal acceptance. And it has kept peace and order on the seas, and facilitated the orderly and equitable exploitation of resources, for more than a generation.
24. China’s policies and actions threaten the viability of the Convention. If China can disregard the Convention, then so can other States. This should be unacceptable to the international community. It should also be unacceptable to China. China itself has much to lose from the unraveling or weakening of the Convention. It has extensive rights under the Convention that it would not want to put in jeopardy. It might one day find these rights threatened by other Great Powers with interests in the South China Sea. The Convention would protect China in those circumstances.
25. The United Nations Charter gives a special role to certain of the world’s most powerful States, including China. It makes them permanent members of the Security Council, and it gives them veto power over Council resolutions. But it does not exempt them from the rules set forth in the Charter, or any other rules of international law. Nor do United Nations Conventions or other multilateral treaties make exceptions to their rules for the Great Powers.
26. The same fundamental legal rules and principles, reflected in international agreements like the Law of the Sea Convention or adopted by custom, apply to all States. It could not be otherwise. The majority of States simply would not accept being bound by rules that exempted other States, solely on the basis of their size or power.
27. They simply would not accept a system in which they are required to comply with the binding orders of competent international tribunals but other States, even Great Powers, are not. The Great Powers set an example, and this can be either good or bad. If they refuse to honor their legal obligations, so will other States, and soon enough international adjudication will be a hollow exercise. In 2012, when Colombia defiantly told the International Court of Justice that it would not comply with the Court’s Judgment delimiting its maritime boundary with Nicaragua, it cited the United States’ rejection of the Judgment in the landmark case brought by Nicaragua in the 1980s, concerning the United States’ illegal use of force against Nicaragua. China, too, cited the US’s rejection of the Nicaragua Judgment in support of its refusal to accept the arbitral Award in the Philippines case.
28. Fortunately, these acts of defiance of international courts and tribunals are, at least so far, rare exceptions. The vast majority of States, in the vast majority of cases, comply with judicial judgments and arbitral awards, even in cases where they consider themselves to have lost. The United States, despite the Nicaragua case, has a decent record of compliance with international judgments and awards. So too does China itself, at least in the context of World Trade Organization panel rulings. China has been complying even with those rulings that go against it.
29. There are reasons why States, on the whole, generally comply even with unfavorable judicial or arbitral outcomes. First, there is an advantage in finally resolving a dispute with another State. Even if the resolution is less than desirable, the alternative – prolongation of the conflict, tension and instability in the bilateral relationship, and the imminent or eventual possibility of armed conflict – is often worse. Second, neighboring States can never move out of the neighborhood. Geographical proximity among States is permanent. Disputes between neighbors are inevitable. If State A doesn’t comply with a judgment or award resolving today’s dispute, how can it expect its neighbor, State B, to comply with one in tomorrow’s dispute? By refusing to comply, State A will have removed judicial or arbitral recourse from the list of possible means of resolving a future dispute that cannot be settled diplomatically. What alternative does that leave it?
30. Third, there is the value of stature, prestige and reputation, which translates into influence on the international level. States enhance their stature, and with it their influence, when they demonstrate that they are law-abiding, including by complying with international judgments and awards. For this reason, States inevitably seek to justify their actions on the basis of international law. We see this in all kinds of situations, even where the reliance on international law seems misplaced. China itself has argued that its nine-dash line claim is based on international law, namely its alleged “historic rights” to far-removed waters and seabed. For the reasons explained above, the arbitral tribunal dispensed with this argument. But my point here is not that States correctly invoke international law to justify their policies and actions, simply that they do so. And that is because they consider it important to their own self-interest to be seen by their neighbors and the international community as a whole, as law-abiding and respectful of the rights of other States. Why do they care? Because it enhances their stature, and thus their influence.
31. Finally, I believe that the majority of States understand that the alternative to a rules-based international order is chaos. Respect for the rule of law serves not only ethical and moral interests, including justice and fairness, but practical ones. It fosters predictability, stability, security and peace in international relations. These are goals shared by most States most of the time. In fact, Great Powers may have the greatest interest in preserving the existing international order, and their privileged levels of influence under it. Maintaining and strengthening that order requires them to accept the consequences on those occasions when its rules are applied against them. No Great Power can reasonably expect to win automatically, every time. There will be times, when their behavior is found to be unlawful. But that may present as much of an opportunity for strengthening the legal order as a challenge to it. There might be no better way to promote the rule of law than for a Great Power, like the United States or China, to accept and comply with an adverse judicial judgment or arbitral award. In fact, they do so, at least from time to time, because they understand that there is no viable alternative to a rules-based system that will protect, over the long term, their interests in a more orderly and secure world.
32. In additional to these systemic considerations, there are particular reasons why China, with the passage of time, the dilution of passions, and the sober-minded reflection of an enlightened leadership, might come to see the Award in the Philippines case as more of an opportunity than a defeat.
33. First, China may appreciate that its core interests in the South China Sea have not been affected by the Award. China’s claim of sovereignty over all the islands, which it considers vital to its strategic interests, is unaffected by the Award. Accordingly, to comply with the Award, China need not relinquish either its sovereignty claim in general or its control over the small islands or rocks it currently occupies for military and other purposes. The only exception is Mischief Reef, which is not an island, but a low tide elevation, lying well within the Philippines’ EEZ.
34. Likewise, the Award does not diminish China’s freedom of navigation or overflight, or ability to conduct naval exercises or other military activities in the South China Sea. China itself proclaimed that, even under the nine-dash line claim, it would respect the navigational and overflight freedoms of other States in and over the relevant waters. Under the Award, the Philippines must respect China’s freedom of navigation and overflight within the Philippines’ own EEZ. China’s freedoms of navigation and overflight, including for its naval and air forces, are therefore fully protected.
35. What have been affected by the Award, principally, are access to resources, and protection of the marine environment. China may no longer lawfully claim for itself exclusive entitlement to the resources within the nine-dash line, but must respect the exclusive economic zones and continental shelves of the Philippines and the other coastal States in the region. China also may no longer destroy environmentally sensitive coral reefs and their ecosystems for the purpose of building and expanding artificial islands. But these should not be difficult pills for China to swallow.
36. Until now, China and its neighbors along the South China Sea have been engaged in a competition for resources, especially fish and hydrocarbons. China’s claim of exclusive entitlement to these resources based on the nine-dash line was explicitly rejected by all of the other coastal States, even before the arbitral Award. China had to resort to shows of force on various occasions, against vessels and nationals from the Philippines, Indonesia and Vietnam, to enforce its claims. Until now, there seemed to be no solution, and the risks of conflict were growing.
37. The Award provides an equitable basis for a solution of this conflict. To be sure, it reinforces the positions of the Philippines, Indonesia, Vietnam and Malaysia, among others, on the unlawfulness of China’s nine-dash line claim, and encourages them to continue to assert their rights as against China within their own 200 M exclusive economic zones and continental shelves. But, at the same time, the Award provides a path for China to negotiate its way out of a dangerous impasse of its own making, and avoid a prolonged and destabilizing conflict, not only with the Philippines, but with Vietnam, Indonesia and Malaysia, as well. This certainly raises the stakes for China to ultimately find an accommodation with four of its largest Southeast Asian neighbors, all of which have rejected China’s claims and are unlikely ever to acquiesce in them.
38. On some of the disputed issues, like protecting the marine environment, China and its neighbors would appear to have common interests. On others, compromise should be possible. Unlike sovereignty, resources, whether fish or hydrocarbons, are more easily divisible. By recognizing that its neighbors, too, have rights, as set forth in the Convention and reaffirmed in the arbitral Award, China would be able to free itself to negotiate equitable sharing arrangements in regard to fish catches, and oil and gas development. China can become an indispensable partner to its neighbors in these activities. It is the only coastal State along the South China Sea with the financial and technological capacity to facilitate exploitation of hydrocarbons without participation from western or other extra-regional players. Good faith negotiations, based on respect for the legal rights of all of the coastal States, could produce a settlement favorable to every one of them.
39. For these reasons, I believe the Award offers China, as well as the Philippines and the other coastal States along the South China Sea, the best path toward a secure, just and lasting arrangement for the peaceful and equitable enjoyment of the Sea and its resources; and this is why I believe there is reason to hope that China, in its wisdom, will come to this same conclusion, and find an honorable way to reach a reasonable accommodation with its neighboring States based on its recognition of their, and China’s own, fundamental rights under the Law of the Sea Convention, as spelled out in the Arbitral Award.
40. Such an agreement, in my view, would serve the interests of China, the Philippines, the other coastal States in the region, and the international community as a whole. This is clearly within the realm of possibility. It requires, mainly, for China to come to the enlightened conclusion that its long term interests, like those of most other States, are best served by respecting, promoting and strengthening the rule of law, and accepting the legal rights of its neighboring States, in return for their acceptance of its own rights, as well as its partnership in the sustainable and equitable enjoyment of the South China Sea and its resources.