Page 2 of 5 Manila, Beijing, and UNCLOS: a test case?
By Alex Calvo
As Professor Bagares noted, this is Manila's position. The submission argues that "As the Philippines and China have failed to settle the dispute between them by peaceful means of their own choice, Article 281(1) allows recourse to the procedures provided for in Part XV, including compulsory procedures entailing binding decisions under Section 2 of Part XV", while "Article 286 allows these compulsory procedures to be initiated by any State Party in the court or tribunal having jurisdiction under Section 2".
Who can choose which path to follow? The submission says that any party can initiate procedures, and that this includes "recourse to an arbitral tribunal under Annex VII of the Convention". This is
the case unless the other party has made a declaration "pursuant to Article 287(1)", something that "neither the Philippines nor China" has done. The text also notes that "no agreement to the contrary currently exists" and that therefore there is no bar to arbitration proceedings. [29] We have already noted that Beijing holds, to the contrary, that such an agreement is contained in the 2000 Declaration on the Conduct of Parties in the South China Sea (DOC), a view that Manila rejects.
Some have suggested that Beijing's refusal to take part in the proceedings makes the case futile from a legal point of view, while conceding that it may play a political role in the conflict over the South China Sea. This is the view of Professor Myron Nordquist, of the Center for Oceans Law and Policy at the University of Virginia, who labeled the situation "quite bizarre", while conceding that Manila's move had accomplished "one of its purposes", namely "to bring attention to this and politically to give the Filipino government the argument that 'Hey, we tried to solve this peacefully and you wouldn't play'".
His overall assessment of the case is that it is "not entirely futile", while warning that "it is doomed to failure because if the party won't consent to the arbitration there is then no enforcement". He adds, "How would they expect a country that didn't want to have a dispute settled by third parties to feel in any sense bound by a decision where they didn't even participate." [30]
Not everybody agrees with labels such as "bizarre" and "futile", however, as is clear in the response to Professor Nordquist by Julian Ku in the Opinio Juris blog. Ku agrees "that the situation is odd" but adds that "it is not unprecedented", stressing that "The Annex VII provisions clearly contemplate situations where one party refuses to appoint an arbitrator by giving the power to the President of ITLOS to appoint the rest of the tribunal. Moreover, general international arbitral practice is to allow arbitrations to proceed even when one party (like China) boycotts the whole proceeding".
Concerning the role of a tribunal in such cases, Ku explains that the "tribunal typically continues to give notice to the boycotting party, and will reach a reasoned award based on its own assessment of the law and facts. It does not typically simply accept the participating party's submissions as true." [31]
Ku also questions Professor Nordquist's conclusion that the case is "doomed to failure because if the party won't consent to the arbitration there is then no enforcement", arguing that "China has already consented to Annex VII arbitration, at least with respect to allowing a tribunal to be constituted and to determine whether it has jurisdiction in a dispute. China consented when it acceded to UNCLOS. All China has done so far is refuse to appoint an arbitrator", adding that "as any private international commercial arbitrator could tell you, consent to an arbitration does not in any way guarantee enforcement".
He concludes that, "if China had participated in the arbitration by appointing an arbitrator, I don't think it would have affected its likelihood of complying with any arbitral award. UNCLOS does not have any sanctions regime akin to, say the Dispute Settlement Understanding of the WTO, so China would not face any formal sanctions if it failed to comply with an arbitral award." [32]
As a result, Ku believes that the decision by Manila to continue with the case "is not really any more futile than if China had fully participated", since in either situation "China would likely not have complied with any unfavorable award." [33]
Concerning how likely ITLOS was to appoint an arbitration tribunal without Chinese participation, Professor Bagares noted that "available precedents - there are only seven such arbitrations conducted under ANNEX VII since the UNCLOS took effect in 1994 - seem to tell the Philippines it has little cause to worry as far as jurisdictional grounds are concerned." [34]
This optimistic view was shared by Ku, who in another post wrote that, "the few Annex VII arbitral tribunals that have been constituted have generally not hesitated to rule on their own jurisdiction ... Even worse from China's perspective, these Annex VII arbitral tribunals issued their jurisdictional decision at the same time as they issued the award on the merits." [35]
These views seem to be prevailing, since ITLOS went forward and assembled a five-member panel to hear the case. In addition to the member nominated by the Philippines, Germany's Judge Rudiger Wolfrum, the Tribunal's president, appointed the following judges: "Jean-Pierre Cot (France) and Alfred Soons (the Netherlands) in April and Stanislaw Pawlak (Poland) in March", together with "Thomas Mensah of Ghana". The latter "replaced Judge Chris Pinto of Sri Lanka, who resigned from the arbitration panel in May shortly after his appointment because his wife is Filipino." [36] Mensah will preside over the arbitral tribunal. [37] Pawlak was appointed as China's representative, albeit by ITLOS president Shunji Yanai, not Beijing. [38] A press release by the International Tribunal on the Law of the Sea informed that "Further to consultations by correspondence with the parties on the matter, Mr Thomas Mensah has been appointed to serve as member and president of the arbitral tribunal". [39]
According to Raul Hernandez, spokesman for the Philippine Foreign Affairs Department (FAD), "The five-member arbitral tribunal will now organize itself and establish its own rules and regulations." [40] In addition, the tribunal will have to determine whether it has jurisdiction to hear the case. The case will only move forward after it has determined "that the complaint filed by the Philippines has legal merit and falls under its jurisdiction". On 11 July the tribunal met for the first time and according to the FAD "designated The Hague in the Netherlands as the seat of the arbitration and the Permanent Court of Arbitration as the Registry for the proceedings." [41] Thus, while the proceedings are moving forward, the key decision, that is whether the arbitration tribunal has jurisdiction, still has not been taken by the five judges.
The reasons behind Beijing's 'No'
As mentioned earlier, even before Manila initiated proceedings, Beijing had already warned the Philippines not to do so. Beijing also warned the Philippines not to discuss the problem with other countries or raise it in international fora, but Manila has pursued these three venues. [42]
On receiving the Filipino submission, Beijing rejected it, and this was accompanied by some statements by officials to the media. On 19 February, Chinese spokesperson Hong Lei was asked to confirm whether "China has returned the Philippines' Notification on the submission of South China Sea issue to international Arbitration".
In his reply, he summed up Beijing's position, stating that "China's sovereignty over the Nansha Islands and their adjacent waters is supported by abundant historical and legal evidence", adding that "bearing in mind the larger interest of China-Philippines relations and regional peace and stability" Beijing had "remained committed to ... bilateral negotiations".
Hong stressed that resort to negotiations was not just Beijing's approach but also "the consensus between China and ASEAN countries as stipulated in the Declaration on the Conduct of Parties in the South China Sea (DOC)". He stated that Manila's request for arbitration "runs counter to the consensus" and "contains many grave errors both in fact and in law, and includes many false accusations against China." [43] The idea that the DOC prevents the resort to arbitration had already been put forward by Foreign Minister Yang Jiechi at the July 2012 ASEAN Regional Forum Foreign Ministers Meeting, where he said that,
''What is essential is that all parties exercise self-restraint in keeping with the spirit of the DOC, and refrain from taking moves that will escalate and complicate the disputes and affect peace and stability", adding that "the Convention has not given itself the authority to change the territory of countries and that it cannot be cited as the basis for arbitration in territorial disputes between countries." [44]
The tone of Hong's remarks was rather condescending, saying that the Filipino submission contained mistakes but not deigning to list them. Furthermore, he claimed that the Philippines had been given "word, not to take any action that magnifies and complicates the issue", in a thinly disguised reference to its internationalization. The spokesman hoped that the Philippines would revert "to the right track of settling the disputes through bilateral negotiations''. [45]
At another media conference the day after, Hong, when asked again about the issue, once more insisted that "Both the Philippines and China are signatories to the Declaration on the Conduct of Parties in South China Sea (DOC) and have made commitments on comprehensive and earnest implementation of the DOC", adding that, "We disapprove of the Philippine Foreign Ministry's practice of bringing international arbitration and have made clear our opposition stance." [46] From 2010, Hong has served as "Deputy Director General, Department of Information, Ministry of Foreign Affairs (MFA)." [47]
Although some sources described Manila's submission as a "surprise move'', [48] and the timing may indeed have been so, it seems clear that China was at least aware of the possibility that this might happen. This would have given Beijing at least a few months to ponder a response.
From the public statements by senior Chinese officials following the submission, however, we cannot see any great difference with Beijing's traditional stance on international arbitration, or more widely international relations. We can note, though, a lack of an immediate reaction by the regime's press, which took a few days to respond. [49]
Basically, what Beijing is saying, confirming a decades-long policy, is that border disputes should be dealt with in bilateral talks, not multilateral fora or international courts or arbitration tribunals. This stands in contrast with Manila's description of arbitration as "a friendly, peaceful and durable form of dispute settlement that should be welcomed by all." [50] Accepting arbitration in this case may set a precedent [51] for the remaining territorial conflicts besetting China. In the past decades Beijing has settled some, while others remain open.
What are the ultimate reasons behind Beijing's reluctance to submit to arbitration? First, we may note that as a historically great country, the leading power in East Asia, China is reluctant to accept the possibility that foreigners may decide the fate of her borders. Her experience in the 19th and 20th century, when she was often subject to the hostile actions of other powers only reinforced this. Second, China has never fully accepted some key aspects of international law, as is clear from the persistence of the "nine dash line" concept or the insistence on keeping foreign warships away from her exclusive economic zone (EEZ). Third, although it is impossible to predict what ITLOS will decide if an award is finally stipulated, it is rather unlikely that the result would strongly support China's position. Even if only partially favoring the Philippines, an award could seriously undercut China's ambitions in the South China Sea.
Concerning international law, which is to a large extent a creation of Western countries, and significantly the United States after World War II, we can note first of all that any rising power is likely to want to at least influence its future development. This may even include fundamental changes to some of its basic tenets.
Thus, Japan tried to get a "racial equality clause" included in the Versailles Treaty, while the Soviet Union pressed for the concept of a "closed sea" for years. It comes as no surprise that China, which for centuries enjoyed substantial power in regulating relations with her neighbors on the basis of a tributary-trade system, may wish to shape the international legal arena. For the first time in a century and a half, Beijing is not just an object of international law, but also a player and potentially a shaper.
On the other hand, persisting in its refusal to accept arbitration could cast a shadow over China's soft power, undermining the attempt to portray itself as a "peacefully emergent" power, in contrast with Western imperial powers. Thus, while China is hardly the only country ready to use force, and actually using it in East Asia, the recent succession of incidents coupled with the refusal to entertain arbitration may run counter to the narrative of Beijing as a "different" emerging power, one resorting to politics, economics and culture as the tools of statecraft.
The damage to Chinese prestige would be lessened if the number of incidents involving other claimants to the South China Sea increased. An example could be the recent death of a Taiwanese fisherman at the hands of the Philippine Island's Coastguard. The incident prompted Chinese General Luo Yuan to say that "Opening fire on a Taiwanese fishing boat is not only a provocation to Taiwan, but to the entire Chinese family", adding that Beijing should aid Taiwan if the Philippines did not apologize. He suggested coordination between Taiwan's and China's coastguards, military exchanges, and a "cooperation" agreement between fishermen associations on both sides of the Taiwan Strait. [52]
Taipei, however, did not take the bait, and after imposing some harsh sanctions, later agreed to compensation, an apology, two parallel investigations (with mutual aid), the opening of criminal proceedings, and most significantly the launch of negotiations on a fisheries agreement. The goal would be to conclude a deal similar to that with Tokyo, whereby sovereignty is left for future discussion while the parties set up fishing zones and implement other confidence-building and coordination measures to prevent incidents. At the time of writing the sanctions have been withdrawn and the fisheries talks are proceeding.
More generally, if Beijing managed to combine her military might with Taiwan's soft power, its ability to more effectively influence events would grow. This is more easily said than done, however, due to Taiwan's complex internal dynamics and attempts to raise its international profile while improving relations with China. Taiwanese politics and foreign policy defy simplistic labels. It was an allegedly pro-Chinese president who signed a fisheries agreement with Japan, while many allegedly pro-independence politicians were quick to condemn the Philippines following the death of fisherman Hung Shih-cheng.
For China to make a u-turn and submit a territorial conflict to arbitration would be a surprising decision. A compromise solution involving a stay of the proceedings may be a more realistic possibility, but if Beijing believes that time works in her favor, this would be unlikely. Such a feeling may rest on a perception that China's naval power is growing, not just in absolute but in relative terms compared with her neighbors and the US. It is difficult to judge whether this is the case.
On the one hand, China is clearly accelerating the expansion of its naval power, but so are countries like Japan and India, not to mention Vietnam. Even the Philippines, traditionally considered to have a very weak navy, has announced plans to upgrade it, and is receiving military aid from both the US and Japan. Manila has recently received a second Hamilton-class cutter from the US, the BRP Ramon Alcaraz, which reached Subic Bay on 4 August, [53] whereas Japanese Prime Minister Abe Shinzo, in his latest trip to the Philippines, confirmed that Tokyo would be providing 10 smaller craft to the country's coastguard. [54]
Another contributing factor may be the possibility that Washington, having paid heavily for the wars in Afghanistan and Iraq, is losing the economic strength and the political will to intervene in Asia. Conversely, many analysts, running in the opposite direction, have begun to highlight China's potential economic and financial weaknesses which may slow down her high growth rates, and the moral and naval rearmament that countries such as Japan, Vietnam, and the Philippines are conducting. A key variable may be the degree of coordination among the maritime democracies (and Vietnam), and we also have to bear in mind Russia's role.
Beijing will assess all these myriad contradictory reasons in deciding whether to keep upping the ante in terms of military pressure, or whether it may be wiser to negotiate from a position of strength.
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