After the Award

In July, a five-judge tribunal at The Hague's Permanent Court of Arbitration (PCA) issued a highly awaited award in the Philippines' case against China over maritime entitlement disputes in the South China Sea. Contrary to what some popular reports have implied, the verdict was not a ruling of the PCA, which acts as the registry in the case. Instead, the case was initiated by the Philippines under the compulsory dispute settlement provisions baked into the United Nations Convention on the Law of the Sea (UNCLOS), the preeminent international treaty governing maritime entitlements and state behavior at sea.

That last detail is particularly important because both the plaintiff and the non-participating defendant in the case have signed and ratified the treaty. After the Philippines filed the case in 2013, as a last resort following the 2012 stand-off with China over Scarborough Shoal, China brushed it aside. Through the three years that followed, Beijing rejected the validity of the arbitration and accused Manila of pursuing less-than-legitimate means of seeking redress for its claims in the South China Sea.

In the aftermath of the tribunal's award, the details of which Carl Thayer has expertly reviewed in the cover article for this issue of our magazine, China remained unmoved. Beijing dismissed the tribunal as lacking jurisdiction, its jurors as lacking competence, and some Chinese spokespeople even suggested active malice on the part of the judges deciding the case. The award's overwhelming stance in favor of the Philippines' positions stunned analysts, many of whom hadn't expected the tribunal to rule in Manila's favor to such an extent.

Indeed, I can think of no independent South China Sea analyst, myself included, that was not at least a little surprised by the tribunal's alignment with Manila on nearly all questions. (The tribunal departed with Manila's interpretation on the status of three minor features and ruled that it lacked jurisdiction over a question involving military personnel at Second Thomas Shoal, where the Philippines' BRP Sierra Madre ship sits stranded.)

Despite Beijing's protests, lamentations, and refusal to participate in the arbitration tribunal's proceedings, the July 12, 2016 award stands as final and binding under international law. By signing and ratifying UNCLOS, both China and the Philippines acquiesced to the dispute settlement provisions under Article 287 and Annex VII of the treaty. Moreover, the 500-page award cannot be appealed. As far as international law is concerned, its findings are fact.

The diplomacy between Manila and Beijing in the aftermath of this award is proving complicated. Early this summer, analysts of the South China Sea disputes who hadn't been paying attention to domestic political developments in the Philippines were stunned to learn that Rodrigo Duterte, a sharp-tongued populist from Mindanao, would succeed Benigno Aquino III as the Southeast Asian country's president. The Aquino administration had initiated and stewarded the case for three years, only to see the tribunal's award released 12 days after it left office. In a cruel twist of fate, a late Taiwanese submission on the status of the Spratly feature of Itu Aba delayed the tribunal's decision, ensuring that instead of Aquino, it would be the freshly inaugurated Duterte administration that would read the 500-page decision.

In the days leading up to the release of the award, Duterte and his foreign secretary, Perfecto Yasay Jr., sent signals that concerned several observers. The administration noted that it would be open to bilateral negotiations with China. Beijing's position on the resolution of the South China Sea disputes, as it happens, is to pursue one-on-one bilateral negotiations with the claimants involved. China's overwhelming size and economic clout grant it disproportionate leverage in these sorts of talks--precisely the reason the Aquino administration resorted to international law instead.

As this issue went to print, no bilateral negotiations have commenced between Manila and Beijing. Duterte noted that he would hold fast to a policy of neither flaunting the result of the arbitration nor taunting Beijing in the aftermath of the award. He additionally requested that the Philippines’ octogenarian former President Fidel Ramos travel to China to lead bilateral talks. Ramos, citing his health, appears unlikely to accept the role.

It appears also that Beijing is responding somewhat positively to the overtures from the Philippines. In the aftermath of the decision, China reacted in a fairly restrained manner. The only immediate kinetic action China took in the South China Sea was a fairly anodyne civilian aircraft flight between Mischief and Subi Reefs (two artificial islands with airstrips constructed by China over the past two years). However, China has slowly turned up the heat, announcing new military exercises near the Paracel Islands and releasing pictures of a People's Liberation Army Air Force H-6K bomber flying over Scarborough Shoal.

Beijing's diplomatic judgment of the Philippines' openness to talks appears to also have been miscalculated. Perhaps intending to test the Duterte government's resolve, Beijing offered talks with the precondition that Manila agree to set aside the tribunal's award, effectively walking into the talks tabula rasa. Yasay, to his credit, swiftly swatted down the Chinese proposal. It's unclear if Beijing is poised to moderate its position on conditional talks. History tells us that a breakthrough would be mighty unlikely.

On the Philippine side, a paradoxical and counterintuitive outcome of a ruling that was so overwhelmingly favorable is that it effectively constrains the space for bargaining with China. Simply put, Duterte will be unable to offer up anything as a concession in bilateral talks with China that the PCA-based tribunal ruled rightfully belongs to the Philippines. Given the heated nationalism in the Philippines over the South China Sea issue, public opinion of the administration would nosedive if, say, part of the Philippines’ continental shelf were offered to China for joint exploration or development.

By the account of experienced Philippines jurists, Duterte may additionally be constitutionally prohibited from offering any part of the Philippines' exclusive economic zone to China in talks. Article XII, section two of the Philippine constitution requires the government to protect "the nation’s marine wealth in its archipelagic waters, territorial sea, and exclusive economic zone, and reserve its use and enjoyment exclusively to Filipino citizens." The award theoretically leaves open Scarborough Shoal and the hydrocarbon-rich Reed Bank for joint fishing and exploration activities, but it's unclear that Duterte could legally and politically survive a concession over these features to China.

Examining the Chinese and Filipino predicaments in detail leaves one pessimistic that the space for productive diplomacy can be expanded. Either Beijing would have to humiliatingly capitulate to the award or Duterte would have to test the limits of Philippine public opinion. In the debate inside China over the South China Sea, moderate voices appear to be losing out. Were Beijing to take a highly provocative step, such as declaring a unilateral air defense identification zone or drawing straight baselines around the Spratly Islands, the scope for diplomacy would shrink further yet.

Ultimately, the aftermath of this ruling tests the very value of international law as a parameter-setting tool in international diplomacy, particularly when the bilateral relationship concerned is profoundly asymmetric. Thucydides, the Greek historian of the Peloponnesian War, observed in antiquity that the "strong do what they can and the weak suffer what they must." In modern times, international law developed as a tool to help small states improve their fate in the face of insurmountable might. Given the diplomatic challenges involved, the bilateral option just doesn't seem to be a realistic path for Beijing and Manila now.

For the Philippines to rightfully enjoy the entitlements doled out by the tribunal's award, the international community will have to unite behind the force of international law. So far, a small list of states, including the United States, Japan, Australia, and Vietnam, have identified the ruling as binding and final. That list must expand if China is to truly understand that there is no evading treaty-based international law. In the meantime, Duterte's nascent attempts at bilateralism might collapse and China may indeed grow more assertive in the South China Sea. These can't derail the broader international project to coalesce behind UNCLOS and the liberal order more broadly.