Findings of the Permanent Court of Arbitration: A Major Diplomatic Setback to China

ISSSP Reflections No. 47, July 14, 2016

Author: R.N. Ganesh

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25-nine-dashed-line-in-the-south-china-seaChina’s claims in the South China Sea are based on its “9-dash line”, which claims virtually the whole of the South China Sea. The 9-dash line is itself based on an ‘11-dash line” published by the Republic of China in 1947, (i.e., before the creation of the Peoples’ Republic of China), which has no valid historic, logical or legal basis. This claim predates the UNCLOS by several decades, and most of the countries of the SE Asian region were not even independent states at the time. China claims sovereignty over the South China Sea and has used military force to interfere with legitimate fishing and oil exploration activity by regional coastal states.  From 1970 the PRC reiterated its demands more aggressively when the Philippines began oil exploration off its coast. The Philippines began oil production in 1984, and today its offshore oil meets nearly 15% of its national requirement.

UNCLOS: Scope of Authority            

The UN Convention on the Laws of the Sea, to which the parties to the disputes in the South China Sea are signatories, lays down the principles based on which the living and non-living resources of the sea bed may be exploited by coastal state. As modified by the lay of the continental shelf and various other factors, it prescribes a limit of 200 nautical miles (approximately 360 kms), as the Exclusive Economic Zone (EEZ) of the coastal state. The Scarborough Shoal, the Spratley islands and the Paracels lie well outside this limit from China. In any case, where the EEZs of two coastal states overlap, they have to be negotiated and agreed based on certain formulae.

The UNCLOS does not rule on issues of sovereignty or national or territorial borders. Rather, it prescribes methods for use of the sea and the exploitation of the resources in and under it, outside of national boundaries. It also lays down how the limits of the EEZ are to be defined and the use and limits for the exploitation of the Continental shelf by coastal states. An important law in the Convention is that rocks and features that cannot sustain human habitation or economic life of their own shall have no exclusive economic zone or continental shelf. This is an issue that is particularly relevant in the case of the South China Sea.

South China Sea Disputes & the Case of Philippines

Taiwan and the coastal states of the ASEAN have 9 different points of dispute concerning maritime boundaries. Of these 7 involve China, and at least 5 states are affected in all but 2 of the disputes with China. China is averse to multilateral discussions and insists on dealing with each state separately so that it can extract the most advantage.

In the absence of any progress of its efforts to resolve the problems with China and the economic loss caused by inability to exploit its rightful maritime resources, the Philippines took its case to Permanent Court of Arbitration (PCA) in The Hague in January 2013. The case dealt with 15 separate complaints about violations of international law by China in the South China Sea. Beijing responded by saying that it would not participate in any proceedings at The Hague, and that the PCA had no jurisdiction in the matter. The PCA undertook a detailed examination of China’s submission and in October last year it published its determination that the case fell within its jurisdiction. It accordingly proceeded with 7 of the 15 issues raised by the Philippines. These dealt with the following aspects:

  1. Role of historic rights
  2. Source of maritime entitlements
  3. Generation of maritime entitlements by certain maritime features
  4. Unlawful activities by China that were in violation of the Convention

Findings of the PCA               

  1. China’s Historic Rights: The Court ruled that the provision of comprehensive and exclusive rights by the UNCLOS had extinguished historic rights as they were incompatible with the concept of exclusive economic zones.
  2. Chinese Control over S. China Sea Waters: There was no historical evidence of Chinese control over the South China Sea waters or its resources
  3. Nine-Dash Line: There was no legal basis for claiming resources within the Nine-dash Line
  4. Maritime Features and Maritime Entitlements: The Court found that some reefs had been heavily modified by construction and land reclamation.  None of the features were capable of sustaining inhabitation in their natural state; therefore they could not have an EEZ, but only a 12-mile territorial limit.
  5. Within Philippine EEZ: As some areas were outside any possible entitlement of China, the Court could declare that these are within the the EEZ Philippine EEZ
  6. Unlawful Actions by China: The Court found that China had violated Philippines rights by interfering in with its fishing and oil exploration, constructing artificial islands, and allowing Chinese fishermen to fish in the Philippines EEZ.  China had also caused great harm to the marine environment by destroying reefs and depleting endangered species such as sea turtles. The Court found that China’s actions were incompatible with the the obligations on a while dispute resolution proceedings were going on.

Implications of the Findings of the Court of Arbitration

China has clearly suffered a setback with the Court of Arbitration so explicitly declaring it a violator of the UNCLOS, and upholding Philippines position. It is quite evident that the dashed lines have no validity and that seems to knock the bottom out of China’s case.

This does not mean that China will resile from its present claims in the South China Sea. Its whole aim there is to acquire the rights to exploit sub-sea resources, particularly offshore oil, and its likely reaction can be predicted. It will harden its position, condemn the Arbitration proceedings and reject the findings (which it has already said it would do) and adopt a tougher and more belligerent posture in its dealings with the USA and the ASEAN, which is already dubious about long-term security support from the US. It may respond to its legal and diplomatic failure with military bravado. It may well become more hard-nosed in its dealings with India, for instance in the border issue and in trade.  Such a reaction will be of a kind with its method of international policy, such as its aggressive postures with Japan over the Senkaku islands, or the ordering of the ADIZ over East China.

The softening of the US towards China has in a sense contributed to matters reaching near-crisis.  America has been aware for more long about the construction and land reclamation in the South China Sea, but its response has been muted, as it is not ideally placed to demand adherence to the Arbitration Court’s findings, not having itself ratified the UNCLOS.

China’s long-term aspiration, however, is to gain status and assert its place at the global  “head table.” This it cannot do if it continues to behave like a maverick. It has to return to its professed policy of a “harmonious rise” This will only happen if the world community takes a firmer stand on its conforming to international agreements.


About the Author

Vice Admiral RN Ganesh (Retd.) has commanded a diesel submarine, a nuclear submarine and the aircraft carrier INS Vikrant. His last appointment was as the Director General of the Indian nuclear submarine programme which he continued to head after retirement from active service till 2004. He is adjunct faculty, ISSSP, NIAS.

Conducting Academic and Policy Research related to National and International Security Issues
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