Centuries of trade have defined many different trade routes throughout Asia based on favourable currents and winds that made trade commercially viable. While wind and currents are no longer essential to use these routes, they remain historically and legally essential for the transit of vessels from; commercial shipping through to fishing and the smaller cruising craft and the modern day Superyacht. Many popular maritime trade routes link many countries from all points of the compass and these intersections pass directly through the South China Sea (SCS), an area whose sovereignty and control has been under dispute between seven different countries. However, control over the SCS is broader than just trade routes and encompasses questions of sovereignty and resource security. The concern, internationally, is whether any dispute will affect maritime travel and trade through the area into the future.
There are two main archipelagos just below the People’s Republic of China (PRC) called the Paracel Islands, and the Spratly Islands. The lands are coveted not so much for their land above water, but for the underwater exploitation of commercial fishing, mining of rich minerals and oil deposits. All seven countries have laid claim to this area in various ways, for example;
- The Paracel Islands are claimed by Vietnam, the PRC and Taiwan
- The Spratly Islands are claimed by all seven of the countries.
- The PRC and Taiwan rely on a historical document called the Nine Dash Map (NDM) to support their claim for sovereignty over the region. This 1949 map used nine “dashes” to outline the territory that the PRC claimed as their own.
- Vietnam laid its claim based on its own historical documents and historical artefacts dating back to the 1800s.
- Indonesia, Malaysia, Brunei, the Philippines have also attempted to claim different areas of the region for themselves.
What has escalated tensions is that the PRC has reclaimed the seabed using the border defined by the NDM and constructed buildings on the Paracel Islands with military potential to enforce their claim to the area.
United Nations Convention on the Law of the Sea (UNCLS)
So how are disputes such as this negotiated? The law of the sea convention defines the economic zone surrounding a country as;
‘The waters surrounding a land mass over which, a region has dominion”. The country’s control in this zone relates to the marine resources, including fishing, and possible power generation from wind, water and solar energy. This area is called the Exclusive Economic Zone (EEZ) and typically this zone cannot extend more than 200 Nautical Miles (NM) (about 370 km) from the coastline. If it overlaps with another country’s EEZ boundary, then the rights are typically found in favour of the closer country.
In respect to the Spratly Islands the PRC has ignored this principle outlined in the convention, while the Islands are closer in distance to the Philippines. The impact on the Philippines has been significant as they rely on this area heavily for their fishing livelihood.
Difficulties in Resolving the Dispute
International disputes such as EEZ border disputes can be resolved in a number of ways. One way is by international mediation, where a neutral third party assists the parties to the dispute to discuss and agree on a solution.
Another option is to proceed via international arbitration, where the parties submit to an external neutral third party to make a finding based on the evidence they provide to the party. An Award is then made in favour of one party or the other. In this case an application was made by the Philippines to the Permanent Court of Arbitration in The Hague (PCAH).
On the 12th of July 2016 the PCAH found in favour of the Philippines, stating that PRC’s reliance on the NDM was insufficient to ground an EEZ claim under current international law. The rational was NDM was created many years before the UNCLS, and so PRC was not relying on any current documentation, nor international law.
Implications for International Trade
More than 25% of global shipping travels through the SCS on its route to the PRC, Taiwan, and Japan and then eastward to the USA, and back. These ships rely on the doctrine of Freedom of Navigation (FoN) which is part of Customary International Law and is also contained in the UNCLS. This doctrine allows these ships to travel unimpeded through all waters, unless international law says otherwise. This doctrine is strongly supported by the USA, which has sent Destroyers and other military vessels into the SCS to dispute PRC’s rejection of the other countries’ claims to the area.
A Non-Military Solution
Creating a Joint Development Zone (JDZ) in the region is one possible solution for the disputed area, especially for the Spratly Islands. This would involve a third party overseeing the disputed area as an administrator and utilising military forces. Indonesia as a member country of the Association of Southeast Asian Nations (ASEAN) would be one potential candidate. All disputing territories would remove their non-land-based buildings and replace their military personnel with civilians. There would then be licences granted for fishing, mining, or drilling for oil or gas, and the proceeds would be shared amongst the countries involved. There would be no territorial disputes permitted, except from what has already been established. Ideally, this would allow international trade to continue safely through the SCS.
If the current dispute in the SCS does affect passage through the region, there would be serious implications on the free passage of all vessels including; pleasure craft and Superyachts through these maritime trade routes, with new routes having to be considered such as travelling via Australia.
Finally, International arbitrations are a frequent form of international dispute resolution used between countries, as well as in international commercial disputes. If countries stopped taking these arbitrations seriously, then there could be a loss of faith and more breaches regarding disputes worldwide. Where these types of disputes occur it would be wise not to enter the disputed territory and get advice in respect to navigating around if your route takes you into these waters.