(July 1-15, 2016)

Award of the PCA in Philippines vs China Case

A Tribunal of the Permanent Court of Arbitration (PCA) issued its award on 12 July 2016, in the Philippines vs China case, essentially decided the following in response to the 15 submissions by the Philippines :-

1. There was no legal basis for China to claim ‘historical’ rights to resources within the sea areas falling within the ‘nine-dash line’.
2. None of the Spratlys islands is capable of generating extended maritime zones nor can they generate the same collectively as a unit since they are basically ‘rocks’.
3. Certain sea areas are within the EEZ of Philippines and China had violated Philippines’ sovereign rights in its EEZ.
4. China’s recent large scale land reclamation and construction of artificial islands in the Spratly Islands has caused severe harm to the coral reef environment.

The award is seen as a stinging indictment of China’s ‘historic’ claims encompassed by the so-called ‘nine-dash’ line and has turned China’s fallacious argument on its head since such claims are ‘incompatible’ with the maritime zones provided by the UNCLOS. The ruling also puts China’s plans of utilizing facilities in the Spratlys for its Anti-Access/Area Denial strategy at serious risk. This award also prevents any change of the current status of these features into islands in the future. The Tribunal’s clear award was actually facilitated by a very adept framing of the case by the Philippines. The Philippines case was based purely on maritime rights and not on the issue of sovereignty which enabled the PCA to circumvent this contentious issue while delivering its award.

China’s stand towards the arbitration was one of defiance against the existing international order. China is a permanent member of the United Nations Security Council and is also a signatory to the UNCLOS. Its refusal to recognize the arbitration and the ensuing award, when viewed against its desire to be a leading player in the world, mandates further debate and action by the international community.

International reaction to the awards has been rather muted due to the already existing tensions in the area and the necessity to avoid any conflict. China, expectedly, denounced the award and called it a piece of waste paper. The Philippines, on the other hand, has maintained clam and called for restraint and sobriety. The US has asked the parties to comply with their obligation under UNCLOS though latest developments seem to indicate that it is working to calm down the situation. India has maintained its consistent position calling upon all States to resolve this dispute through peaceful means showing utmost respect for UNCLOS. While it is important to avoid conflict at all costs, the Chinese position of not recognising the award, is a cause for serious worry. It sets a precedent for future disrespect of obligations under internationally accepted conventions and customary laws which can only portend worry for the comity of nations. All efforts should therefore be made by the international community to impress on both parties the need for respecting such obligations.

RIMPAC 2016

The Rim of Pacific (RIMPAC) exercise is the world's largest international maritime exercise. It is intended to foster and sustain cooperative relationships for ensuring the safety of sea lanes and security on the world's oceans. The current edition is the 25th in the series of biennial exercises which dates back to 1971. The exercise is scheduled form 30 June till 04 August and has twenty-seven nations participating in it with 45 ships, five submarines, more than 200 aircraft and 25,000 personnel. The exercise is being conducted in and around the Hawaiian Islands and southern California. India is also participating in the RIMPAC with INS Satpura from the Eastern Fleet. The Chinese are also participating with five ships which include a submarine rescue vessel.

Participation of the Indian Navy in such exercises provides an excellent opportunity for improvement of multilateral interoperability and understanding of procedures for maritime security operations. It also enables sharing of best practices and honing of operational skills. It thus gives a fillip to the understanding of maritime security in the Indo-Pacific region while contributing to peace and stability of the global commons.

The Chinese participation is significant, especially in the context of the ongoing dispute in the South China Sea. China is participating in this exercise for the second time and it appears to be part of a larger outreach to increase its visibility as also understanding with navies across the globe. Chinese ships have conducted exercises with navies as far apart as in Africa and Scandinavia in recent times. It is also an occasion for the Chinese navy to showcase it growing strength to the rest of the world as China seeks to be a maritime power in the decade to come.

Japan

Convincing Upper House Election Win for PM Abe

The ruling Liberal Democratic Party (LDP) and its coalition partner Komeito won 56 and 14 seats respectively, scoring a convincing victory in the House of Councilors election held on 10 July. It was the first national poll since Abe took over as Prime Minister for the third time in December 2014. Election is held every three years for half of the seats in the 242 member Upper House. With this election outcome the pro-constitutional amendment lawmakers have secured two-thirds majority in both the houses of Diet.

Prime Minister Abe considers the outcome as support of the people for his two important initiatives on Abenomics and amendment to article 9 of the Constitution. Abenomics is designed to spur consumer spending and end nearly two decades of stagnant economic growth but has largely failed so far to boost wages or spending. Last month, Abe postponed a tax increase to avoid further decline in consumer spending.

Article 9 of Japan’s Constitution renounces war and prohibits Japan from maintaining any armed forces. It has been interpreted to an extent that Japan maintains a Self Defence Force (SDF) to defend itself from an armed attack. For undertaking any amendment to the Constitution the government requires a two-thirds majority in both the houses of Diet, along with a simple majority in a nationwide referendum. However the Abe government passed a bill in September last year that enables Japan’s military to mobilize overseas when Japan or its close ally is attacked by reinterpreting article 9 and not revising it under the constitution.

Abe and his supporters avoided talking of constitutional revision during the run-up to the election, focusing instead on economic issues and believed that the country needs political continuity at a time of growing global uncertainty. The Komeito Party, in particular has not displayed much enthusiasm in support of the amendment to the constitution that may remain subdued till adequate national consensus is built.

The opposition led by the Democratic Party (DP) lost decisively in spite of fielding unified candidates in many constituencies. It dubbed Abenomics as failure, saying the income gap has been widening under the prime minister’s economic policies and argued that amendment to the constitution will entangle Japan in international conflicts, most likely in support of the USA. However the DP had disappointed the public when it was in power and offered no viable alternatives this time. Following infighting and regroupings, there were eight opposition parties, making it hard for voters to keep track of party names and platforms. Voters may have also passively approved Abenomics with no alternatives.

The election victory gives Abe the moral strength to continue moving ahead with his government’s programs. The yen has depreciated, though marginally, after the election victory and a fiscal stimulus package of more than 10 trillion yen is expected. A Cabinet reshuffle may also happen soon. There is also a growing speculation that Abe, whose second term as party president will expire in two years, may seek a rare third term until 2021, which would give him more time for constitutional revision and hosting the 2020 Tokyo Olympics.

In China, Xinhua, the state news agency, warned in a commentary that the election results “could pose a danger to Japan and regional stability.”

ASEAN

Malaysian Deputy Prime Minister Ahmad Zahid on visit to India

Malaysian Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi has started his first working visit to India from 16^th July to strengthen bilateral ties between the two countries. India and Malaysia will be celebrating 60^th anniversary of diplomatic relations next year established in 1957. According to Dr Zahid, this meeting is significant and can be considered as a precursor to 25th ASEAN – India Commemorative Summit, which will be hosted by India next year. He added that this is also a reciprocating courtesy extended by Malaysian Government to Prime Minister Modi’s visit to Malaysia during ASEAN Summit of 2015. India is Malaysia’s 10^th largest trade partner. Malaysian investments in India, including in infrastructure and public amenities, totaled US$1.77bil. The bilateral defence cooperation and technology exchange was one of the key components of his interaction with India. Both countries have agreed to establish India-Malaysia high level joint working committee to deal with cross border criminals. In this regard, both the countries have agreed to draft a memorandum of understanding to formalize cooperation, which will be furthered later this year.

Verdict by Permanent Court of Arbitration (UNCLOS) Tribunal

The much awaited verdict by Permanent Court of Arbitration in favour of Republic of Philippines, rejecting comprehensively Chinese claims, has turned to be a major decisive factor within the ASEAN grouping as a Community.

The Chinese claimed waters encompass the Exclusive Economic Zone claims of Brunei, Indonesia, Malaysia, the Philippines, Taiwan and Vietnam. Therefore, this verdict will define and test ASEAN unity and its ability as a regional organization to independently carve out its regional priorities and maintain it. Whether it will be able to do so can be expected to come in public view during the upcoming 49^th ASEAN Foreign Ministers meeting at Laos and at other forums coming up shortly like the 23^rd ASEAN Regional Forum (ARF) meeting and the 6^th East Asia Summit (EAS) which are expected to be attended by major external powers including China, the US.

The developments need to be view in the context of major stakes of many ASEAN states in economic cooperation with China. Differently nuanced approaches on seeking resolution of maritime disputes with China do exist within the ASEAN community. The Cambodian opposition to an ASEAN declaration in support of tribunal’s decision marks a major split in the ASEAN. Vietnam would obviously ask for “full compliance” with the convention. Singapore foreign minister Vivian Balakrishan said, “We cannot subscribe to the principle of might is right”. Conversely, Indonesian President Joko Widodo presided over a cabinet meeting onboard a warship off the Natuna islands after its navy detained Chinese fishing boat and fishermen. The military ruled Thailand is not a claimant country, but considering its strong economic interest with China in recent times, it may not like to disturb the synergy of this relation.

However, after reviewing the situation in the SCS, it is highly unlikely that the competing territorial and maritime claims in the South China Sea will be resolved in near the future due to difference of approach preferred by claimants to resolve those disputes. Though a consensus was forged between ASEAN foreign ministers before the issuance of promptly retracted “media statement” by Malaysia, mounting Chinese influence on Cambodian and Lao decision has widened the differences in ASEAN. ASEAN’s policy of engagement with China and its post-verdict approach towards the issue has been accommodative and has short term benefits for ASEAN. Despite the disunity on the PCA’s ruling, its final impact would define the geopolitical contours in the South China Sea.