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POSITION ON SCARBOROUGH SHOAL/WEST PHILIPPINE SEA ISSUES, MARITIME ZONES BILLS AND

ARCHIPELAGIC SEA LANES BILLS

Rommel C. Banlaoi Head, Center for Intelligence and National Security Studies (CINSS) of the Philippine Institute for Peace, Violence and Terrorism Research (PIPVTR)

Delivered at the public hearing of the Committee on Foreign Relations, the

Philippine Senate, on 27 April 2012, at the Session Hall, 2nd Floor, Senate of the Philippines, GSIS Bldg., Financial Center, Pasay City.

The Honorable Chairperson and distinguished members of this committee. It is my pleasure to appear before you today to offer my scholarly insights on the agenda of this public hearing, particularly in the light of the on-going standoff with China in Panatag Shoal or Bajo de Masinloc, which the international community calls Scarborough Shoal. I am not a lawyer so I am not in the right position to talk about the legal ramifications of the West Philippine Sea, Maritime Zones Bills and the Archipelagic Sea lanes Bills. But as a scholar of international politics and being the Head of the Center for Intelligence and National Security Studies (CINSS) of the Philippine Institute for Peace, Violence and Terrorism Research (PIPVTR), an independent, non-government research organization, I am keenly following these issues not only for research and instructions but also for policy research and development. I stand before you today to share my humble thoughts on the present agenda in aid of legislation. Let me start by stressing that the concept of West Philippine Sea and bills on Philippine Maritime Zones and Archipelagic Sea Lanes are not only domestic issues but they are also international concerns with profound national and regional security implications. Unless we have a broad understanding of the international politics surrounding these issues and concerns, using a new name and passing domestic laws can just be moot and academic, if not an exercise in futility. The Philippine government has adopted the West Philippine Sea (WPS) to refer to the body of waters that is deemed part of Philippine territory, which is located West of our Archipelago. The main intention of the Philippine government in

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using WPS is to assert our territorial claim in our disputed maritime zones. The use of the South China Sea (SCS), the government asserts, has subliminal message that this body of waters belongs to China; thus there is a need to change the name to convey the stand of the Philippines. Vietnam calls it East Sea (ES). So, why don’t we call it WPS indeed? But what’s in a name?1 The use of WPS, SCS or ES is just a geographic description. While it has psychological and propaganda value for states using these names, they are just labels devoid of any legal meaning that can be used for any form of ownership. The use of the Indian Ocean does not mean that this water belongs to India. The passage of Philippine Archipelagic Baselines Law in 2009 and the proposed Maritime Zones bills and the Archipelagic Sea Lanes bills are part of the Philippine government’s legal offensives to assert our territorial claims in this disputed body of waters in accordance with international law. With limited military capability to assert our claim, the most logical and pragmatic option for the Philippines is to really go legal. Even if, for the sake argument, we have sufficient military capability to defend our claim, going to war to settle this kind of territorial disputes is counter-productive for national and regional security. Based on my understanding of international politics, laws passed domestically only have domestic applications for internal law enforcement purposes. They have international applications only if they are consistent with international laws and are recognized by the international community. Since I am not an international lawyer, I must admit my limitations to discuss the legal intricacies of these issues, particularly the detailed provisions of Maritime Zones and Archipelagic Sea Lanes bills. I would like to underscore, however, that if domestic laws of one sovereign state compete with and even being challenged by domestic laws of other sovereign state, particularly if it pertains to territorial ownership, then we have an inter-state problem. In this case, the problem can be solved either through bilateral negotiation (multilateral if it involves more than two states), international arbitration, or, as a last resort, war. The last option is definitely out of Philippine agenda. But if the Philippines is attacked militarily because of territorial disputes with our neighbors, then we can invoke the Mutual Defense Treaty (MDT) with the United States. But this is an ugly scenario that everyone does not want to happen. Even if we invoke the MDT, retaliation from the U.S. is not automatic, as it needs to pass through the constitutional processes of the U.S. Congress. The first option apparently puts the Philippines in a very disadvantaged position if the negotiation is done bilaterally with China because of the asymmetry of our relations. But this is a pragmatic, albeit difficult, option. The Philippines wants

1For my detailed take on this issue, see Rommel C. Banlaoi, “West Philippine Sea: What’s in a Name?”, Newsbreak (15 June 2011).

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to multilateralize the problem through the Association of Southeast Asian Nations (ASEAN). But the grim reality is that ASEAN does not have common position on the South China Sea problem, particularly in the context of regional power dynamics and intra-ASEAN territorial disputes. The Philippine government regards the second option as our best option – international arbitration. But international arbitration can only occur if the other party is willing to put the issue to this process. Since international arbitration is a creature of a “contract” that involves all parties concerned, doing it unilaterally is a gargantuan mission. As a sovereign state, the Philippines is entitled to pass any domestic laws pertaining to our territorial waters, maritime zones and archipelagic sea lanes that we really deem necessary to promote our national interests. China also passed its own domestic law in 1992 declaring almost 80% of the South China Sea as part of its territorial waters and contiguous zones. The Philippines already passed its Archipelagic Baselines Law in 2009 and we are not prevented to pass into law the Maritime Zones and Archipelagic Sea Lanes bills. It is now our call, however, if we have the means and wherewithal to enforce our laws and make violators accountable to these laws. What begs the question at than in the light of the standoff in the Scarborough Shoal is why Chinese and other nationalities continue to fish in what we call our waters? For us, other nationalities are not fishing but poaching in our waters. We have laws to make poachers accountable. However, these waters have been traditional fishing grounds of many people of various nationalities for centuries. Thus, preventing them to fish on the bases of our domestic laws is really a tall order – it requires adequate resources and a strong political will. The situation is complicated by the fact that other nations claim that the waters that we call ours also belong to them. That is why we have disputes in the WPS, which we want to settle through international laws. For us to understand the complex territorial disputes in the South China Sea, particularly in the context of the on-going standoff between China and the Philippines in the Scarborough Shoal (and how to deal with the situation and peacefully resolve the standoff), we also need to understand the relevance of fishing in the maritime territorial disputes. Fishermen of various national origins are attracted to the South China Sea because of its very rich marine resources. A recent study shows that fish stocks in the South China Sea “are a multi-billion-dollar industry”, which accounts for “as

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much as one-tenth of the global catch.”2 Since fish protein represents 22 percent of the average Asian dietary needs (much higher to the global average of 16 percent), fish demands from littoral states in the South China Sea grow.3 China, particularly, has already demonstrated its increased demands for fish.4 The increased demand for fish is directly proportional to the increased income of Chinese citizens resulting from its phenomenal economic growth. The World Bank (WB) has declared China in 2011 as the world’s second largest economy, next to the United States. If its current growth of at least 8 percent annually continues, the International Monetary Bank (IMF) forecasted that China could be the world’s largest economy by 2016.5 Thus, China’s current fishing behavior in the South China Sea is dictated by its growing demand for these resources resulting from the increased purchasing power of Chinese consumers. China is also increasing its naval and maritime law enforcement capabilities in order to protect its “maritime defense” (haifang) and “maritime rights and interests” (haiyang quanyi or haiquan) in the South China Sea and other waters in Asia (such as Senkaku/Diaoyu Island in the East China Sea in conflict with Japan and the Yellow Sea in conflict with South Korea). China regards these waters as part its territory. I have no more time to discuss in detail the military capabilities of China at present. But suffice for me to say that that People’s Liberation Army Navy (PLAN) has flirted with the idea of a new type of naval campaign that encourages “attacks against coral islands and reefs” (dui shanhu daojiao jingong zhanyi). Naval experts say that this campaign scenario “appears to be tailored to the South China Sea disputes where China might consider attacking islands and reefs held by other claimants.”6 It is not year clear, however, whether this idea has been adopted as an official military campaign strategy of the PLA. My point is that the idea has crossed their minds. 2Patrick M. Cronin, ed., Cooperation from Strength: The United States, China and the South China Sea (Washington, D.C.: Center for a New American Security, January 2012), p. 55. 3Ibid., p. 90. 4Patrick M. Cronin, “China’s Global Quest for Resources and Implications for the United States” (Testimony before the U.S.-China Economic and Security Review Commission on 26 January 2012). 5 “IMF Report: China Will be the Largest Economy by 2016” (25 April 2011) at http://www.marketplace.org/topics/business/imf-report-china-will-be-largest-economy-2016. 6Phillip C. Saunder, Christopher Yung, Michael Swane and Andrew Nien-Dzu Yang, eds., The Chinese Navy: Expanding Capabilities, Evolving Roles (Washington DC: Center for the Study of Chinese Military Affairs at the Institute for National Strategic Studies of the National Defense University, 2011), p. 50.

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Chinese fishermen in the South China and the Scarborough Shoal do more than fishing. Observers say that fishing activities “are civilian instruments of power that help stake out legal claims and establish national maritime rights.”7 Thus, the Chinese government protects their fishermen to promote its concept of maritime rights and stake out its legal maritime claims. China’s current behavior in the Scarborough Shoal is part of this overall power projection. According to a report:

Chinese officials are deliberately using civilian maritime law-enforcement vessels, rather than the People’s Liberation Army Navy—to enforce China’s maritime rights and fishing laws. Whereas China resorted to using warships over Mischief Reef territorial disputes in the 1990s, the recent assertiveness of China in these waters has been prosecuted largely with civilian instruments of power.8

Aside from fish, China is also convinced to assert its position in the South China Sea because of its increasing and incessant demand for oil. It is estimated that the potential oil resources of the South China Sea is 213 Bbbl. There are conflicting claims, however, about the size of natural gas and oil deposits in the area. According to US Geological Survey, about 60% to 70% of the hydrocarbon resources in the South China Sea are gas.9 A research conducted by Chinese experts reveals that that the total gas resources of the South China Sea can reach 900 Tcf (Total Cubic Feet) with an annual production of 1.8 Tcf.10 Chinese geologists have recently detected 'super-thick' oil and gas-rich strata in the South China Sea and also identified 38 offshore oil and gas basins in the area.11

7Cronin, “China’s Global Quest for Resources and Implications for the United States”, p. 2. 8Ibid., p. 3. 9Global Security, “South “China Sea Oil and Natural Gas” at http://www.globalsecurity.org/military/world/war/spratly-oil.htm <accessed on 4 January 2011>. 10 Ibid. 11 “Huge Source of Oil, Gas Found in South China Sea”, Sify News (17 January 2011) at http://www.sify.com/news/huge-source-of-oil-gas-found-in-south-china-sea-news-international-lbrokhcdigb.html <accessed on 7 February 2011>.

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Because of reported oil and gas resources, all claimants in the South China Sea have existing gas and oil exploration activities in the area.12 China has exploration project in Vanguard Bank, which is proximate to Indonesia’s Natuna Gas Field. Vietnam has projects Dai Hung and Blue Dragon Fields that are adjacent to disputed territories in the South China Sea. The Philippines has natural gas power project in Malampaya, which is close to disputed Spratly group of islands. The Philippines also has oil development plans in the Reed Bank that is being contested by China. Malaysia, which controls disputed reefs located in oil rich portion of the South China Sea, has begun its natural gas production from Angsi Field that is expected to produce 65,000 b/d of oil and 450 MMscfd of gas. Brunei has exploration projects in Louisa Reef that is also being claimed by Malaysia. To avoid conflicts and create a relationship of amity, Brunei and Malaysia decided to enter into joint oil exploration projects in Louisa Reef. Brunei also explored the possibility of joint oil exploration with China considering that China buys an average of 20,ooo barrels of oil daily from Brunei.13 China has, in fact, recently announced its plan to step up oil and natural gas exploration in the South China Sea by spending an average of 500 million Yuan ($75 million) a year in the next two decades in order to meet the country’s growing imported energy needs, which in 2010 already reached 55 per cent of total domestic consumption.14 It is forecasted that 60% of China’s oil consumption will be imported by 2020 making gas and oil exploration in the South China Sea necessary to reduce dependence on oil imports. Fishy and oily issues currently propel the assertive behavior of China in the South China Sea. Now, how can we respond to a more assertive China? Passing our bills on maritime zones and archipelagic sea lanes will not alter China’s assertive behavior. While we believe that passing these bills will strengthen our territorial claims, they will, however, not yet solve our problems in the WPS because overlapping claims remain. While we can execute our laws in our “non-disputed territories”, executing them in “disputed territories” will be a huge challenge. Even if these laws are consistent with existing international laws, no international law is self-executing. 12 See Craig Snyder, “The Implications of Hydrocarbon Developments in the South China Sea” at http://faculty.law.ubc.ca/scs/hyd.htm <accessed on 8 February 2011>. 13 Goh de No, “Brunei Open to Joint Exploration with China”, The Brunei Times (3 February 2011). 14 “China to Increase Expenditure on Oil, Gas Exploration”, The Nation (25 January 2011) at http://thenationonlineng.net/web3/business/energy/25742.html <accessed on 7 February 2011>.

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International law is not like domestic law. It “differs dramatically in enforcement and adjudication. On enforcement, there is no executive to make a state accept a court decision. International politics is a self-help system. In the classic ways of international law, enforcement was sometimes provided by the great powers.”15 In other words, international politics is still in the state of anarchy where there is no supreme authority above the sovereign state. Conflicts among states are settled either through war or diplomacy. In our conflict with China on the WSP and Scarborough Shoal, our only option is to pursue the diplomatic track and settle this peacefully. Our pursuit of diplomacy with China can only work if we refrain from using words that hurt feelings such as “bully”, “aggressive”, “provocateur”, and the like. We can stand firm in our claims by using more constructive words because conflicts and cooperation in international politics are also products of social constructions. Friends and foes in international politics are what states make of it. If we call China a bully, then China will be a bully. If we call China a responsible power, China will be pressured to act that way. This is not naiveté. This is handling the situation constructively. Dragging the U.S. into our bilateral conflicts with China can only complicate things. The Philippines can enlarge our voice in ASEAN if ASEAN can come out with a common position. We can use the international community to get the sympathy of other states. We can invoke international laws to prove our case before the community of nations. But at the end of the day, the reality of international politics still prevails. The reality dictates that in our present circumstances, the only pragmatic option for us is to patiently convince China in a bilateral way that peaceful cooperation in the South China Sea is more beneficial than prolonging the standoff and dragging the Philippines and other claimants into costly conflict. For example, we can encourage China to enter into joint maritime patrols of the disputed waters in order to promote sustainable fishing practices in the South China Sea. China may have the military and economic powers to assert its claims in the Spratlys. The Philippines can use the power of ideas to tame China and find just and lasting solution to the South China Sea problem. Our on-going dispute with China on WPS is just one aspect of our relations with China. Beyond these disputes, our relation with China is productive. China is the 15Joseph S. Nye, Understanding International Conflicts: An Introduction to Theory and History, 7th Edition (Pearson Longman, 2008).

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Philippines’ second largest source of official development assistance, third largest trading partner and fourth largest source of foreign tourists. The years 2012 and 2013 have been declared as years of friendly exchanges between the Philippines and China. Let us not allow the disputes in the WPS and the standoff in the Scarborough Shoal destroy this friendship. Let us talk to China and remind China that the Philippines is a friend and we deserve to be treated that way. Please accept my sincere appreciation for extending to me this rare opportunity to impart my humble thoughts today.