Law and Realpolitik: The Arbitral Tribunal’s Ruling and the South China Sea

In: Asian Yearbook of International Law, Volume 21 (2015)
Open Access

i Introduction

In the positivist understanding, international law is a product of accumulated State practice. It is what States have recognized as accepted practice forming customary international law, which may be codified into a convention governing State interaction. International law reflects State practice over a range of functional issues including trade, investment, the environment and also maritime rights and territorial claims. International law is desirable because it brings predictability and stability in relations between States, facilitating cooperation and removing sources of friction and conflict. It is in the interest of States to align their activities with international law because of the benefits which accrue from a cooperative and predictable order. Policy, however, represents the intentions and objectives of a State and is not law. The distinction between law and policy is important as international law builds on accumulated State practice while policy expresses the transient interests of a political leadership or State, which may not provide a stable basis for State interaction. International law may change and adjust to changes in State practice, particularly as new issues arise that require regulation. However, changes cannot be imposed by any one State, no matter how powerful, which attempts to shape the direction of law in a way favourable to its interests. International law cannot be rewritten because of the political desires of a particular leadership or ruling party, or because it is opposed by a particular country. When a State attempts to impose its policy upon law it is resorting to realpolitik, or the forceful if not violent pursuit of its own interests in complete disregard of the interests of others.

ii Reputation and International Law

Compliance with international law is a matter of State interest without the need for punitive or enforcement mechanisms of the kind associated with domestic law. A reputation for compliance will enhance a State’s status making possible cooperative arrangements from which other States will benefit. Through compliance with law, a State can demonstrate a reputation for cooperation which can further its goals in international relations and commerce, and obtain the cooperation of others. More can be achieved through cooperative arrangements than by unilateralism, which would clash with the interests of other States and stimulate enmity and antagonism. The concern with reputation ensures that States will comply with agreements whereas unreliability will damage that reputation undermining cooperative relationships while creating an unwillingness on the part of other States to enter into future agreements. A reputation for compliance has value in international affairs as a means of furthering a State’s interests through cooperation. Long-term relationships with other cooperative States are possible leading to the smooth running of international transactions without monitoring and verification.2 Not every agreement has the force of law and the status of law is a way of ensuring compliance from governments that would be concerned about the loss of reputation if they reneged or failed to comply.3 Law specifies acceptable behavior in particular circumstance and in relation to a particular issue and is indicative of the seriousness and solemnity of the commitment and the willingness to undertake it. International law may be created by un organs and conventions as subject to the ratification process of States, and also by international judicial and arbitration bodies such as the International Court of Justice, the International Criminal Court and the Law of the Sea Tribunal.

States may develop “multiple or segmented reputations” complying with some regimes and treaties while resisting and even opposing others. This may contradict the notion of a unitary reputation which is valid for all agreements.4 The notion of segmented reputation depends upon the function and the area covered by law as compliance is expected and normal with trade and commercial agreements even for regimes that may have a poor reputation in other areas. A State may comply with trade or commercial agreements which are in its interest but not necessarily with legal judgements which affect its security. A reputation for compliance in commerce is not necessarily transferable to other areas such as security where a State may reveal a poor reputation for compliance, the Soviet Union was such a case. The liberal theory of international law claims that compliance with international law is a product of regime type and the domestic structure of a country. Domestic regime type may be a guide to compliance with international law as governments that are committed to the rule of law are more likely to take their legal obligations seriously. Liberal democracies with independent judiciaries and a vibrant legal culture are likely to be compliant with international law and are unlikely to jeopardize their reputation by non-compliance. Outcaste States such as North Korea may not be constrained by these considerations as they pursue their own interests such as nuclear weapons programs but they are few in number, and their future viability is dubious. Larger States with economic and military power may be tempted to ignore international law for reasons related to immediate and pressing security interests or domestic politics. The reputational costs of non-compliance, however, cannot be avoided.

Non-compliance comes with costs even for powerful states that may place themselves above law. The Reagan Administration ignored the International Court of Justice’s decision of 1986 in the case of Nicaragua v. United States over the mining of Nicaraguan ports, the us trade embargo, and support and financing of the Contra rebels against the Sandinista regime.5 This has been a blot on America’s reputation ever since and has often been cited by regimes that justify their own non-compliance with law. The Bush Administration’s lurch towards realpolitik was a more significant departure from law when it promulgated the doctrine of pre-emption in the “National Security Strategy for the United States” of September 2002. Since 1945 the us promoted the international rule of law and a liberal world order based on institutions and democratic values, but the Bush Administration acted in way to undermine those institutions and values.6 The us invasion of Iraq in March 2003 was justified by the doctrine of pre-emption as an act of self-defence under Article 51 of the un charter. It was supposedly a response to the claim that Saddam Hussein had amassed a huge arsenal of weapons of mass destruction, a claim which was not vindicated subsequently. un Secretary General at the time Kofi Annan publicly declared that the us-led war on Iraq was illegal because it did not receive the sanction of the un Security Council or any of its resolutions.7 The Bush Administration suffered the consequences of this unilateral action as it lost the trust of its allies and faced constant attacks on its reputation. This action divided nato as France was unwilling to cooperate with us policies and public opinion in Britain later turned against America. Russia’s seizure of Crimea in March 2014 was an even more blatant disregard of international law because it involved a territorial revision and overtly challenged the territorial integrity of a sovereign State – the Ukraine. Russia has similarly suffered reputational costs which have cast it in the role of an aggressor serving to facilitate nato cooperation and triggering international sanctions against it. The eu strongly opposed Russia’s action and its efforts to support the rebels in the Eastern Ukraine which were regarded as an attempt to dismember the State. The eu imposed ever widening sanctions on Russia beginning in March, July and September 2014 and March 2015 which later included sanctions imposed by the us. Russia’s positive relationship with Germany was undermined as the Germans joined the eu consensus against what was perceived as the actions of a predatory State.

Big powers may indeed ignore law at times, but this has consequences for their reputation that they may not have foreseen. Realpolitik may seem to be licence for a great power to do what it wants and to employ any means it may deem necessary to achieve its objectives. This remains a popular view today. However, a persistent disregard of law stimulates resentment and brings about opposition against the State concerned. When a judicial or arbitration body has ruled over a particular issue, the effect is one of clarification of the rights and wrongs of behaviour. What previously may have been a complicated issue that could be justified from different points of view becomes clearer and subject to quick judgement and even condemnation. The deliberate disregard of law in such circumstances creates a counter alignment of international opinion which then facilitates cooperation and the formation of coalitions against the State concerned. Indeed, in this situation the pursuit of realpolitik does have its costs. What may have been more easily achieved through cooperative policies which bring together interested States excite antipathy and counteraction from those who otherwise may have been receptive to cooperation.

iii The Philippine Arbitration Case

The Philippine decision to appeal to legal arbitration was the result of much frustration in dealing with China which had encroached upon its claim area and Exclusive Economic Zone (eez). In 1994 China occupied Mischief Reef in the Philippine claim zone and built structures on the reef to support fishing activities. The Philippines appealed to asean and the asean Regional Forum for support but members were uninterested and wary of antagonising China. In April 2012 China squeezed out the Philippines from Scarborough Shoal when the Chinese coast guard orchestrated a fleet of fishing vessels which moved into the surrounding waters and prevented Philippine vessels from entering the area. Negotiations with the Chinese who were bent on retaining control of the features they had occupied had lead nowhere and the Philippines was left with no other option except an appeal to legal arbitration. The proposal to go to law was credited to Supreme Court Senior Associate Justice Antonio Carpio, and was promoted by the Philippine Department of Foreign Affairs under Minister Alberto Del Rosario. President Benigno Aquino then adopted the proposal and gave the green light to go ahead.8 When the Department of Foreign Affairs launched the appeal it issued a statement on 22 January 2013 saying that it had exhausted “almost all political and diplomatic avenues for a peaceful negotiated settlement of its maritime dispute with China.”9

The case was heard by a tribunal under Annex vii of the un Convention of the Law of the Sea (unclos) with the Permanent Court of Arbitration (pca) acting as registry. The Arbitral Tribunal finally made its ruling public on 12 July 2016 and accepted 14 out of the 15 points raised by the Philippines. Two main points are of relevance here. First, it decided that China may have had historic rights to the resources of the South China Sea, but “such rights were extinguished to the extent they were incompatible with the exclusive economic zones provided for in the Convention.” The Tribunal sidestepped the sovereignty issue which was not within its remit by deciding that China’s historical claim had been superseded by unclos in the negotiations for which China participated. China had signed the convention on 10 December 1982, and ratified it on 7 June 1996 and therefore should have accepted its provisions accordingly. The Tribunal also noted that there was no evidence that China had actually exercised exclusive control over the South China Sea or the resources there. Secondly, the Tribunal found that none of the features in the Spratly Islands is capable of generating extended maritime zones, including those occupied and artificially reclaimed by China. The Tribunal clarified the meaning of Article 121 of the Convention and the definition of an island by saying that “this provision depends upon the objective capacity of a feature, in its natural condition, to sustain either a stable community of people or economic activity that is not dependent on outside resources.” The Tribunal also found that Chinese activities had “violated the Philippines’ sovereign rights in its exclusive economic zone” and that China had “inflicted irreparable harm to the marine environment” because of its reclamation projects.10

The Chinese claimed that the ruling had no legal significance because China was not a party to the action and could not be bound by the decision, that the Tribunal had overstepped the mark by dealing with issues of sovereignty, and that China had opted out of compulsory third party adjudication in its declaration of 25 August 2006 by invoking Article 298 of unclos. In response to China’s argument that an unclos Tribunal did not have jurisdiction over sovereign claims, the Tribunal held that this was an issue of maritime rights under unclos, and that this dispute did not concern maritime boundary delimitation. In response to the claim that China was not a party to the dispute and would not be bound by the outcome the Tribunal decided that being a party to the Convention bound China to the arbitration provisions. Once China had acceded to unclos, it had accepted third party arbitration in regard to the maritime rights which fall under its provisions. The Tribunal referred to Article 9 of Annex vii to the effect that the absence of a party or failure of a party to defend its case “shall not constitute a bar to the proceedings.” In addition, Article 287 (3) states that a party, “which is a party to a dispute not covered by a declaration in force, shall be deemed to have accepted arbitration in accordance with Annex vii.” In response to China’s claim that in its declaration of 25 August 2006 it had opted out of compulsory arbitration, the Tribunal noted that this declaration concerned sea boundary delimitation. The Tribunal was not constituted to deal with sea boundary disputes but it could deal issues arising from the Convention so it decided it could proceed, and that China would indeed be bound by the outcome.

China also contested the legitimacy of the ruling when it claimed that the Tribunal was unrepresentative and biased. A People’s Daily article claimed that the Japanese Judge who was former president of the International Tribunal of the Law of the Sea, Shunji Yanai, was the “manipulator” behind the ruling since he appointed four of the five judges leaving the Philippines to appoint one.11 The article averred that the judges were biased from the start because they had been appointed by a Japanese. However, had China joined the proceedings as a party, it would have had the right to nominate four arbitrators under Article 2 of Annex vii. China lost this right because of its refusal to join the proceedings and then attempted to defend itself by making accusations of bias. Indeed, some Chinese scholars have said that not to participate was a major error since China lost the opportunity not only to nominate arbitrators but to present its case more persuasively before the Tribunal.

The Tribunal’s ruling was final and binding on the parties to the dispute. Article 296 states that “any such decision shall have no binding force except between the parties and in respect of that particular dispute” which formally limited its application to the parties concerned. However, despite this formal restriction, the ruling creates a precedent that would be applied or referenced in other maritime disputes, particularly those involving historical claims and overlapping maritime zones. In this case the Tribunal has clarified the relationship between China’s historical claims, the nine dash line, and unclos and ruled that the Law of the Sea has priority. Since this is the first time that five eminent justices in a legal Tribunal have dealt with the issue of the South China Sea the ruling has legal effect in terms of illuminating a complicated situation and identifying who has the law on their side and who does not. The Tribunal’s contribution is clarification of a complex legal situation in the South China Sea, one that will not be expunged by the defamatory criticisms of aggrieved governments.

The Tribunal’s ruling will have repercussions for other claimants and not just China. In its position paper dated 21 March 2016 Taiwan claimed similar historical rights to those of Beijing and argued that its government has exercised high-level jurisdiction over the islands since the end of World War ii. Taiwan also occupies the largest island in the Spratly Islands called Itu Aba or Taiping Island with 600 military and coast guard personnel and a runway of 1,100 meters capable of taking stol aircraft. Taiwan’s position paper claimed that Taiping Island meets the requirements for an island according to Article 121 of unclos. To the extent that Taiwan shares Beijing’s claim it has been legally undermined on both counts, in regard to historical claims and the status of “islands.” Vietnam has similarly been affected in that the Tribunal’s ruling did not mention the Paracel Islands which are claimed by Vietnam but occupied by China. Vietnam has also based its claim to the South China Sea on history but it has been attempting to bring that claim into conformity with unclos by clarifying the outer limits of its maritime zones.12 Vietnam’s Law of the Sea declaration of 2012 desists from labelling the features in the South China Sea either as islands or rocks implying that they have no maritime zones. Moreover, Vietnam’s Law on Sea and Island Natural resources and Environment of 2015 incorporated unclos provisions on the eez, continental shelves and territorial sea into domestic law.13 Significantly, under international law Vietnam has incumbency rights to the 21 features it occupies in the Spratly Islands. Its effort to bring its claims into line with international law can be seen as a measure to defend these incumbency rights.

iv China’s Response

China’s Ministry of Foreign Affairs declared that the ruling is “null and void and has no binding force and China neither accepts nor recognizes it.” The Ministry also said that “the Chinese government will continue to abide by international law and basic norms governing international relations” which means that Beijing will selectively decide what it will accept and what it will reject.14 Beijing has orchestrated an international campaign to vilify the Tribunal, which sometimes reached a rather crude level. The Chinese ambassador to the Netherlands Wu Ken called the Philippine case a “legal monstrosity” which “reeks of hegemony from Washington.”15 The Chinese Ambassador to the United Kingdom, Liu Xiaoming, called the Tribunal’s ruling a “political farce under the cloak of law” and declared that “by not accepting or recognizing the ruling, China is not violating but upholding the authority and dignity of international law.”16 China’s Ambassador to Australia, Cheng Jingye, called the ruling “fatally flawed” and that the arbitration initiated by the Philippines was “completely politically motivated.” The Ambassador also claimed that by rejecting the ruling, China was safeguarding “the integrity and authority of unclos.”17 It is difficult to imagine that the integrity and authority of law can be safeguarded by its deliberate transgression.

Official Chinese representatives have made the public claim that the Declaration of Conduct (doc) which China concluded with asean in November 2002 bound the Philippines to negotiate with China. This obligation precluded the Philippines from resorting to the Arbitral Tribunal. However, the Philippines had in fact attempted to negotiate with China but the Chinese simply stonewalled and the appeal to an Arbitral Tribunal was a reaction to Chinese stalling tactics. Moreover, the doc was not conceived as a legally binding treaty and though asean had attempted to interest the Chinese in a legally binding Code of Conduct they remained steadfastly opposed. The result was a non legal Declaration of Conduct which was conceived as a stepping stone to a fully-fledged Code of Conduct. In any case there is no provision in the doc which prevents an aggrieved party from resorting to law. Article 4 of the doc mentions that the parties “undertake” to resolve their disputes through “friendly consultations and negotiations.” The Philippines had attempted this but to no avail. Moreover, Article 5 says that the parties will “refrain from activities” which would “complicate or escalate disputes” including “inhabiting on the presently uninhabited islands, reefs, shoals, cays, and other features.” China’s reclamation activities in the South China would fall under this Article and if China now regards the doc as having legal effect, which it did not in the past, then it would be bound by Article 5.18 Arguments raised by the Chinese Ambassadors, and also Chinese scholars, that claim that the Philippines was prevented from appealing to law by some kind of estoppel are overtly contradictory.

v The Domestic Impact and China’s Notion of Law

The unpleasant rhetoric which flooded the international news agencies from Beijing and the attacks on the integrity and composition of the Tribunal have been beyond the pale and reveal a fundamental disrespect for law in Chinese society. This is the first time that China has been subject to a claim for arbitration over a maritime territorial dispute which for Beijing is intolerable. Moreover, traditional Chinese hierarchy recoils at the notion that law could put a small country such as the Philippines on the same level as an ancient civilisation and powerful State such as China, or that it could be allowed to bring a legal action against it. Traditionally, legality has not been part of Chinese political culture and though China has made progress in adopting legal forms from the outside, the idea of law restraining the political leadership conflicts with that culture and the role of the Communist Party politically and socially.19 Since Deng Xiaoping proclaimed the “open door policy” in 1978, China has been importing law and related institutions to regulate the economy and to cope with the social effects of high economic growth. Around 2010, however, the Chinese leadership drew back from the legal reforms they had previously supported as it was understood that they could lead to political liberalisation undermining the role of the party. They reverted to the notion of the “socialist rule of law” which was set against Western concepts of the rule-of-law, considered inappropriate for China, to preserve “social stability”.20

The key feature of the “socialist rule of law” is the importance given to mediation and dispute resolution by non-legal means which in many respects relies on traditional notions of justice in China. Mediation or dispute resolution can be conducted by local party officials with lawyers and court officials in attendance together with the parties and their families, and invokes popular notions of justice. Mediation in this sense may bring social stability as aggrieved parties are obliged to accept a resolution based on the power hierarchy but whether or not it accords with the principles of justice is something else. What is acceptable socially by local officials would be imposed on all the parties as a resolution and may depart significantly from those legal principles.21 A family that has had its land confiscated by local officials would be obliged to accept a settlement meted out by those officials. In this approach there is little room for the supremacy of law or its abstract principles, or indeed for autonomous legal institutions or an independent judiciary. In the Chinese view of international law, a ruling by an international tribunal should be a product of mediation in which all views particularly those of the most powerful should be taken into account.22 The idea that a tribunal that has no stake in the issue could impose abstract principles of justice upon this maritime dispute flies in the face of the Chinese understanding of how justice is implemented. If Chinese notions of dispute resolution were applied to the South China Sea there would be no invocation of abstract principles but an effort to settle the dispute based on mediation that acknowledges the rights of the power hierarchy, in this case China. From this perspective the tribunal should have enjoined the Philippines and the other asean claimants to negotiate with China and accept whatever terms Beijing would have to offer. In this scenario, stability could be ensured not by abstract notions of justice but by recognition of the power hierarchy in this dispute.

The impact of the ruling upon Chinese domestic politics should not be overlooked. Xi Jinping was elevated to the presidency with the promise that he would preside over the “great dream of the renewal of the Chinese nation” and would demonstrate “the superiority of China’s socialist system.”23 He has strengthened his position in Chinese politics by removing rivals in the anti-corruption campaign, particularly those associated with former president Jiang Zemin. In this context the Arbitral Tribunal’s ruling entailed a loss of face for Xi Jinping because of his failure to obtain a decision favourable or at least neutral to China. A second failure has been China’s inability to prevent South Korea from deploying Terminal High Altitude Area Defences (thaad) with the us as a missile defence against North Korean missiles. Xi Jinping has come under attack for these failures which are regarded as humiliations for China and the vitriolic outbursts against the Arbitral Tribunal’s ruling can be partly explained as an attack on the Xi Jinping leadership in this context. Moreover, there are reports of dissatisfaction with Xi Jinping’s leadership amongst the economic ministries and the supporters of Premier Li Keqiang who are concerned about excessive controls over the economy and the unwillingness of the Party to follow through with economic and financial reform. To protect himself and his appointees from a purge unleashed by his successor, Xi Jinping had himself declared as “core leader” of the Chinese Communist Party by the party’s Central Committee in October 2016. This elevated his status to the level of Mao and Deng Xiaoping strengthening his position for the 19th Party Congress due to be held in 2017.24 No doubt, opposition and cleavages in the ruling party will be exacerbated by the ruling and related events.

The ruling has become controversial amongst Chinese scholars. Some have adopted an attitude of righteous anger calling for China’s withdrawal from unclos. Others have suggested that failure to participate in the Tribunal’s proceedings was a mistake and China missed an opportunity to obtain a more favourable ruling. Yet others have claimed that once a State has ratified unclos it has an obligation to implement it effectively in “good faith” and that “any abuse or omission is impermissible.” They have argued that the “pick and choose” mentality towards international norms will not promote and realize rule of law and justice in the international community.25 However, Chinese officials have publicly adopted the “pick and choose” approach when they deny the validity and legality of the Tribunal’s ruling yet proclaim that China would nonetheless abide by unclos and international law.

vi The Impact of the Ruling on the Western Pacific

What would be the impact of the ruling on the Western Pacific? China may become more belligerent internationally as the political leadership attempts to boost its credibility before its domestic critics. Beijing will attempt to compensate for loss of legality over this issue by resorting to bellicose language and threatening behaviour. Ambassador to the us Cui Tiankai declared that the ruling will “intensify conflict and even confrontation.”26 The Chinese cast the South China Sea dispute not as an issue involving the legal rights of the asean claimants but as a strategic contest between China and the us. They claim that the ruling will allow the us to strengthen its alliances to confront China and will deepen this strategic rivalry.27 In the first instance, a deterioration of security can be expected, not only in the South China Sea but in the East China Sea and the Korean Peninsula. Outrage and anger may well be raised to new levels by the Chinese media in a way reminiscent of the Maoist era.

China’s increased assertiveness has become apparent elsewhere as the political leadership has felt the need to compensate for loss of face, and to demonstrate its power and resolution before domestic audiences. On the Korean Peninsula Beijing has been ambivalent about the sanctions that the un Security council imposed upon North Korea on 2 March 2016 after its fourth nuclear test. China’s desire to retain the North as an ally has conflicted with its intention to denuclearise the regime and its enforcement of un sanctions has been half hearted. After the South’s decision in July 2016 to deploy thaad against the North’s missile threat, China has eased up on those sanctions that have been applied, and has reached out to the regime. North Korea is for China its only means of bargaining with the South and a counter to the us-South Korean alliance. Increased Chinese assertiveness has been reported around the Senkaku/Diaoyu islands where the Japanese have recorded increased intrusions by Chinese coast guard and fishing vessels in the wake of the Tribunal’s ruling. Tokyo fears that the Chinese are resorting to the same tactics they used to push out the Philippines from Scarborough Shoal in 2012 when they blocked access to the area to Philippine vessels and imposed a fait accompli upon Manila. Needless to say, the Japanese have demanded that China respect the Tribunal’s ruling.

China will not only ignore the ruling but will use its dominant position in the South China Sea to press the asean claimants into bilateral negotiations to set it aside. Beijing has persuaded the Chinese population that the South China Sea was always “ancient” Chinese territory despite the absence of convincing historical evidence, and with a controlled press it has whipped up popular nationalism over the issue. It has produced passports which show the area as Chinese territory and has directed nationalist fervour against the us for supposedly interfering into the dispute and inciting asean resistance. China has attained a dominant position there as the result of its reclamation projects which have been promoted by bureaucratic interests and supported by a rising nationalism. The State Oceanic Administration (soa) under the Ministry of Land and Resources has pushed for the expansion of China’s interests in the maritime domain, not only in the South China Sea but in the Senkaku/Diaoyu Islands.28 Since August 2014, the Chinese have been dredging sand from the ocean floor and extending the size of Fiery Cross, Johnson South, Subi, Quaterton, Gaven, Mischief, and Hughes reefs. China has constructed 3,000 meter airfields on Fiery Cross and Subi Reef and a 2,600 runway on Mischief Reef. As a result of these activities, China will have three airfields on reclaimed features, with berthing facilities for transport vessels and radar and signals monitoring facilities which will enhance its ability to track the movement of shipping and aircraft in the area. China will be able to deploy front line air superiority fighters, bombers and heavy lift transport aircraft to these airfields strengthening its position there. The Chinese claim that these moves are defensive and are intended to protect their claim but they have political consequences for the asean claimants.

With this strengthened position in the South China Sea and its renewed belligerence, China hopes to deprive the asean claimants of any hope that they could gain any support from the Tribunal’s ruling. Beijing will apply dispute resolution techniques to push for negotiations that will confirm its sovereignty over the South China Sea while disregarding the Tribunal’s ruling. The outcome will then be presented to the world as a negotiated regional agreement in conformity with international law, which China professes to uphold. China may offer access to the area to the fishing vessels of the asean claimants as an incentive but acknowledgement of China’s sovereignty would be a necessary condition. In this way, Beijing would nullify the Tribunal’s ruling and its relevance for the South China Sea. To demonstrate defiance, China has stepped up military exercises in the South China to intimidate the asean claimants and convince them of the irrelevance of the ruling to their situation. Prior to the ruling China launched a series of naval exercises in the area involving two guided missile destroyers and a missile frigate. After the ruling was made public, China’s air force in early August conducted a combat air patrol over disputed areas of the South China Sea. This may become a regular practice. At the same time China’s navy conducted live firing drills in the East China Sea in a similar demonstration of power. In September 2016 China also conducted a military exercise with Russia called “Joint Sea 2016” to demonstrate joint defiance of the ruling and opposition to the international legal system which both claim is dominated by the West.

asean has been divided over the South China Sea. The Philippines and Vietnam regularly pressed for a united asean stand which Cambodia and Laos, both effective allies of China, rejected. Other members such as Thailand and Myanmar have been uninterested in the dispute while Malaysia has acted to preserve what it regards as its special relationship with China. Cambodia in particular has been China’s close ally and when it was chair of asean in 2012, Foreign Minister Hor Namhong ensured that the regional body would avoid the issue. When asean Foreign Ministers met in July 2012 they failed to issue a communiqué for the first time in their history, which was the result of Chinese pressure exercised through Cambodia. asean inaction could be seen during the Foreign Ministers’ meeting in Vientiane on 24 July 2016, the first after the Tribunal’s ruling was made public. The communiqué from this meeting avoided mention of the ruling, which was regarded as a “diplomatic victory” for China. Once again, Cambodia, which had received a promise of a $600 million loan package from China, and Laos both worked on behalf of Beijing to prevent the emergence of a consensus over the issue.29 Reports from the meeting indicated that Laos was prepared to accept a diluted statement on the South China Sea and was not inclined to prevent mention of the issue. However, Cambodia adopted a hard-line position opposing even statements that had appeared in previous asean communiqués in relation to the dispute. asean Foreign Ministers at least referred to the communiqué of the asean Regional Forum where ministers were “seriously concerned” over the land reclamations and “escalation of activities in the area” and reaffirmed freedom of navigation in and over flight above the South China Sea.30

In view of asean’s paralysis over the issue, some members have been moved to accept bilateral negotiations with China to reduce tensions as it becomes more bellicose. Chinese Foreign Minister Wang Yi called for bilateral negotiations without reference to the Tribunal’s ruling to resolve the issue and resorted to aggressive language when he warned that the Philippines risked possible “confrontation” with China if it insisted on the ruling.31asean claimants hope that by professing friendship and good relations, Beijing would respond magnanimously and respect their positions in the South China Sea, without the need to invoke the Tribunal’s ruling. Within asean, the use and profession of friendship to create an obligation for reciprocity is often referred to as the “Asian way” of dealing with disputes. Newly elected Philippine President Rodrigo Duterte espoused this approach when he tilted towards China in a deliberate snub to the us which had criticized his promotion of extra judicial killings of drug offenders. Duterte visited Beijing in October 2016 and declared that he had “realigned” himself with China and Russia and announced a “separation” from the us.32 Duterte said that he would review the Enhanced Defence Cooperation Agreement concluded with the us when President Obama visited Manila in 2014, and that military exercises with the us would be terminated. However, when Defense Secretary Delfin Lorenzana said that joint patrols and naval exercises with the us in the disputed South China Sea were put on hold, he did not say terminated.33 When he returned to the Philippines, Duterte said that he had no intention of cutting ties with the us and that by “separation” he meant charting “another way” in foreign policy. Indeed Presidential spokesperson Ernesto Abella issued a public statement that the Philippines would not break any established alliances, particularly with the United States.34 It is no wonder that Duterte’s critics called him “incoherent.”35

Duterte claimed that he had obtained a Chinese agreement to let Filipino fishing vessels return to Scarborough Shoal from which they had been evicted by the Chinese Coast Guard in 2012. By the end of October 2016 the Chinese Coast Guard had withdrawn from the area and some Philippine fishing vessels moved in. The Philippine President regarded this as a triumph and a vindication of his visit to Beijing but Philippine commentators were aware that China had “permitted” the return of the fishing vessels in a temporary concession in return for Duterte’s shift against the us. However, China was not softening its claim of “indisputable sovereignty” over the area.36 The concession could always be withdrawn in which case the President would be obliged to offer more in return to satisfy the demands of the Chinese and to maintain his popularity with his supporters. In this way the Philippines may slide into a dependent relationship with Beijing, which would effectively sideline the ruling. Before Duterte visited Beijing, Filipinos had attempted to place the ruling at the centre of any negotiations that would be conducted with the Chinese. Ernesto Abella affirmed this and said that talks with China had to abide by the Constitution and international law, and that The Philippines aimed to realize rights to its eez as granted by the Arbitration Court.37 Foreign Minister Perfecto Yasay reiterated that bilateral talks with China cannot proceed while Beijing insists on negotiations “outside of the framework of the arbitral tribunal’s decision.”38 Subsequently, however, the Foreign Minister changed his view when he declared that dialogue with China based on the ruling “may not happen in our lifetime.” The ruling, he said, would be placed on the “backburner.” Yasay said it was more important to develop other areas of the relationship including trade, investment, commerce, infrastructure development, people-to-people contact and cultural exchanges.39

Malaysia’s Prime Minister Najib Razak also visited Beijing in November 2016 though the South China Sea was not publicly discussed. Najib hoped that business with China would generate much publicity and overshadow the scandal that had erupted over the misappropriation of funds from 1Malaysia Development Berhad (1MDB) which went into the Prime Minister’s private accounts. Malaysia had claimed a special relationship with China since Najib Razak’s father Tun Razak had established diplomatic relations with China in 1974, the first asean country to do so. Malaysian leaders expected this relationship to give them special treatment from Beijing and were prepared to tolerate Chinese incursions in their claim area in the South China Sea for this reason. However, Malaysian concerns over intrusions by Chinese fishing vessels increased and it seemed that the special relationship was having little effect. Malaysian Navy Chief Admiral Abdul Aziz Jaafar said that intrusions by Chinese vessels had been occurring daily since 2014.40 In June 2016, Chinese coast guard vessels pushed out Malaysian patrol boats from Luconia Shoal in Malaysia’s eez and escorted about 100 Chinese fishing vessels into the area.41 In Beijing, Najib agreed to purchase four Chinese naval vessels for inshore patrols, two of which were to be manufactured in China and two in Malaysia.42 Najib had hoped to return in triumph from Beijing but for some within the ruling umno party stronger ties with China are disturbing. Former Prime Minister Mahathir accused Najib of surrendering Malaysia’s claims in the South China Sea to China and threatening Malaysia’s position there.43 Though it was intended to restrain Chinese behaviour in the Malaysian claim area, the special relationship may have the opposite effect of silencing Malaysia’s complaints in relation to Chinese claims and incursions into that area.

International legal scholars have declared that the ruling cannot be imposed on the parties and should be regarded as an opportunity and a stimulus to negotiation.44 Both the Philippines and Malaysia have reacted to the Arbitral Tribunal’s ruling by seeking negotiations with China in the expectation that this would obligate the Chinese to moderate their behaviour in the South China Sea. The ruling supports their efforts and gives them confidence but their concern to avoid all public controversy with China may lead them into the situation where they may be obliged to disavow it. Some in asean have been embarrassed by the ruling since from their perspective it introduces new difficulties in the relationship with China and stimulates Chinese ire which they would prefer to avoid. However, what could happen in this situation is that in their effort to be assured of China’s good behaviour, the asean claimants may accept a settlement that would acknowledge the Chinese claim and its superiority over unclos. This may remove the sense of insecurity that the claimants feel in relation to the Chinese presence in the South China Sea. It may bring other benefits such as access to the area by their fishing vessels and agreements for joint development of the hydrocarbon reserves there. A resolution of this nature would be in line with Chinese notions of justice but it would be a significant departure from the Tribunal’s ruling and would demonstrate the irrelevance of unclos to this issue. With its irrelevance demonstrated in this way unclos would be significantly weakened and made subject to power and the realpolitik of powerful States.

vii The Future

Realists regard international law as an epiphenomenon to the realpolitik that governs relations between States, and somewhat unrelated to their interests and behaviour. Hans J. Morgenthau has argued that international law and international politics are separate from one another and operate in different spheres. Graham Allison wrote that in ignoring the Tribunal’s ruling China will be doing just what the other great powers have repeatedly done for decades and this was “normal behaviour” for great powers.45 However, noncompliance with international law has consequences at various levels and in ways that may not be immediately apparent. The great powers may ignore international law but the result will be the stimulation of suspicions and counter activities that would work against their interests. The slide into realpolitik may seem normal to realists but it brings with it insecurity and a potentially destructive competition which could otherwise be mitigated through cooperative efforts. In this case non-compliance with the ruling entails a loss of opportunity for China to resolve the South China Sea dispute though cooperative measures such as a maritime regime, which would take into account the legal claims of all. As China resorts to unilateral efforts to secure its position there it stimulates a damaging action-reaction cycle with external powers such as the us and Japan to the detriment of all concerned.

In international history there are seemingly minor events that precipitate unexpected and extensive changes in global affairs. The Arbitral Tribunal’s ruling may be one such event in the Asia Pacific region as it concerns China’s behaviour and whether it will act to uphold regional order or disrupt it. China has reacted belligerently to the ruling by unleashing an extensive and oftentimes offensive public relations campaign to deny its legality. The Chinese leadership has acted to demonstrate power before domestic audiences and to silence those who have criticised it for weakness. In ignoring the ruling, Beijing has attempted to deny reputational loss by claiming political and legal exceptionalism and demanding that as the second largest global economy and a rising military power the world should accept China’s position on the South China Sea, and work around it. The Chinese expect that international law will be revised to accommodate China’s historical claims and its special interests and their refusal to accept the Tribunal’s ruling will be the first step in the revision of international law and unclos. In this way China’s leaders want to make it clear that their reputation is not at stake, but that of the Tribunal and the judges who issued the ruling. In so doing, Beijing would decide the law of the sea and how it is applied in which case law would be shaped by the policy and interests of Chinese political leadership.

China’s reaction to the Arbitral Tribunal’s ruling demonstrates clashing interpretations of law and how it may be implemented. The overriding importance of abstract principles of justice is very Western, as is the effort to ensure their literal interpretation and implementation. A significant departure from these principles in actual practice is cause for condemnation or an accusation of hypocrisy, saying one thing and doing something else. However, abstract principles carry little weight in the Chinese notion of law as imposed mediation, which recognizes the power hierarchy and takes into account its interests. Abstract legal principles are understood by the Chinese as guidelines or aspirations and not as hindrances or restrictions upon negotiating possibilities. What is most important is a settlement which brings stability even if this entails a departure from those legal principles. The difficulty is that as Chinese notion of law divests itself of these principles it offers no regulatory framework for the resolution of disputes, no precedents that could bring predictability to State interaction and add to the corpus of law other than the recognition of power. The resort to realpolitik is inherent in this approach. International law cannot be devised or constructed without these legal principles and the regulatory framework they support which the Chinese in this instance reject. By repudiating the Arbitral Tribunal’s ruling China is creating greater uncertainty in maritime affairs when the resort to force to settle disputes will become more likely. As a major trading country with a strong interest in the security of maritime trade, China would be the first to face the consequences of a deterioration in maritime security. Rather than acting like an aggrieved victim, Beijing should assume the responsibilities commensurate with its economic weight and support a maritime order based on law and the legal principles that sustain it.


Visiting Fellow, Strategic and Defence Studies Centre, Australian National University.


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