Critical Issues Confronting China Summary–The South China Sea in 2016: Progress and Regress

October 31, 2016
Peter Dutton

On July 12, 2016 an UNCLOS (United Nations Convention on the Law of the Sea) Annex VII Arbitral Tribunal delivered its final award on the Philippines' case against China over the South China Sea. What is the basic content of this verdict? How should we evaluate this long legal document? What does it mean for the geopolitical future of the Asia-Pacific? Peter Dutton, Professor and Director of the China Maritime Studies Institute at the U.S. Naval War College, deciphered this legal ruling for the general public.

This complex maritime dispute centers around three issues: (1) the ownership of some physical features in the Spratly Islands, (2) the division of the water space and the resources underneath, and (3) different interests between coastal states and user states. For example, the U.S., being a user state of the water space, has an interest in ensuring freedom of navigation (3), but not in the ownership of the features (1) nor rights to resources (2). The Philippines' geography-based case against China, brought to court in January 2013, falls into the second category and is under the jurisdiction of the UNCLOS of 1982, which both China and the Philippines have ratified.

To deal with this dispute, relevant countries can choose from a range of options, from third-party arbitration or adjudication to diplomatic negotiations to power-based coercion to the deployment of military force. China prefers bilateral negotiations with the Philippines, while maintaining a coercive posture in the South China Sea. The Philippines, unable to negotiate with China in a multilateral setting it preferred and lacking military power to counter China, had to resort to legal institutions to resolve the dispute through the compulsory dispute resolution procedure both states had ratified.

The final award from the arbitration tribunal concluded that there was no legal basis for China's claim to historical rights over the disputed water space enclosed by the Chinese nine-dash line in the South China Sea, which was promulgated by the Republic of China in the 1940s. It legitimizes the Philippines' traditional fishing rights in the territorial sea surrounding Scarborough Shoal. It further decided that certain Chinese practices violate safety and environmental regulations and that China's artificial islands on the Philippines’ continental shelf are illegal.

Another central issue facing the tribunal was that of “entitlements” – or the jurisdictional zones projected from sovereign territory into ocean space. The tribunal determined that all of the Spratly features fall below the threshold (of independent human habitation and economic life) to be considered “islands,” and are therefore not entitled to have a 200-mile EEZ or continental shelf. Several features are “rocks,” which rate only a 12-mile territorial sea. Further, because some of the Chinese-occupied small features are underwater at high tide, they are low-tide elevations, which do not themselves generate any entitlements. The ruling rejects China's claims to sovereignty over features that are not rocks or islands, because such features are not territory for which any sovereign title is possible.

Before the tribunal hearing, China lawfully exempted itself from compulsory dispute resolution on "sea boundary delimitations," but the tribunal did not delimit any zones nor did it make any determinations of sovereignty. Dutton acknowledged that the tribunal has no mechanism to enforce its rulings, but it does have authority to “interpret and apply” the treaty, including to define island, rock and low-tide elevations and to judge geographic-based claims. He said that although this tribunal's ruling is binding and final, it applies only to this dispute and does not represent the final word on UNCLOS. Still, it is an authoritative opinion of five highly respected international jurists who undertook a careful and systematic review of the case.

Since the award was rendered, bilateral negotiations have resumed. It also has favorable implications for the other three claimants: Vietnam, Malaysia and Brunei. If the award is respected, these countries no longer need to further litigate their case against China. Dutton noted that the high sea donut-hole in the middle of South China Sea, waters beyond the five claimants' 200-mile EEZs, represents an opportunity for all six parties (including Taiwan) to cooperate together for joint exploration and management.

Now China has to choose between accommodating this adverse ruling and confronting the UNCLOS system. If China chooses to please its domestic audience by adhering to its original claims, it will have adverse diplomatic consequences. If China chooses to accommodate the ruling, it will be good for its relations with Southeast Asian countries and promote the regional stability it needs for its own economic development. Dutton is hopeful that China will change its attitude and abide by international norms since, as China's navy sails further away from its shores, it will increasingly value an open, access-oriented approach to maritime affairs.