6.4 A New Framework for Settlement

The Spratly Islands have caused territorial disputes as well as maritime delimitation disputes. In the Hanish Islands arbitration between Eritrea and Yemen, the tribunal followed two-stage approach: resolving the sovereignty issue in a first stage, and the maritime boundaries in a second stage." Although the two issues may be taken together in a single phase on the merits, as was the case in Qatar v. Bahrain (sovereignty over Hawar Islands) and Cameroon v. Nigeria (title to Bakassi peninsula) in the ICJ, if the parties wished to proceed in that way, this kind ot desire among the disputing parties involved in the Spratly disputes is very doubtful. Thus, this chapter exclusively focuses on settlement of the complicated territorial disputes in this area.

Hie resolution ot the Spratlys sovereignty disputes is envisioned as a real Gordian knot in consideration of their complexity. There are as many as six parties involved in the disputes: Mainland China, Taiwan, Vietnam, the Philippines, Malaysia and Brunei. Some claim all of the Islands, like Mainland China, Taiwan and Vietnam. Some claim some parts of the Islands, like the Philippines, Malaysia and Brunei. Meanwhile, the concurrent cession dispute between Mainland China and Taiwan hinders China from putting together a single, combined Chinese delegation to crystallize its position on the Spratlys. The Taiwan issue has in effect inclined the PRC to use diplomatic negotiations to deal with the disputes over the Spratly Islands.138

Hie complexity of the disputes over the Spratly Islands has inclined not only the PRC but also the other disputing parties to use negotiations to resolve their disputes. In 1976, to tackle the disputes that may disturb regional peace and harmony, the ASEAN members worked out the Treaty of Amity and Cooperation (the TAC) in which it provides that the members "shall at all times settle... disputes among themselves through friendly negotiations."1 -w And the Treaty emphasizes that "... parties to a dispute should be encouraged to take initiatives to solve it by friendly  negotiations before resorting to the other procedures provided for in the Charter of the United Nations."140 In July 1992, the AS EAN members signed the Declaration on the Conduct of Parties in the South China Sea declaring that they shall use friendly consultations and negotiations to resolve their territorial disputes.141 In November 2002, the PRC signed a code of conduct in the South China Sea with the ASEAN confirming the principle of friendly negotiations contained in the 1992 Declaration. But this declaration is just political statement short of a legally binding code ot conduct.142 So in order to make political promise legally binding on China, the PRC acceded to the TAC on 8 October 2003, which is a binding treaty rather than a political declaration.111'

Nevertheless, we must bear in mind that negotiations encouraged by the TAC,1 u from the Chinese viewpoint refer to a method to prevent military clash rather than a method to resolve territorial disputes. The Chinese Vice Foreign Minister Wang Yi assessed that the 2002 Declaration would not resolve territorial conflicts, but would allowpeace to reign and help claimant countries tocus on economic development.14' Without the active participation of the PRC, no solution to the Spratlys problem will be permanent on a practical and political level. China's proposal of joint development with sovereignty on the shelt is based on the premise that negotiations are not for resolving the sovereignty disputes of the Spratly Islands. In other words, joint development around the Islands is negotiable, but China's sovereignty over the Islands is not negotiable. When the Chinese leader Deng Xiaoping firstly proposed that dispute could be set aside in favour ot joint development, his assumption was that China's sovereignty is indisputable."" That is why Mark J. Valencia's suggestion ot allocation of the revenues in the Spratlys based on the division ot sovereignty is completely unacceptable to China.148 China actually intends to advise other disputants to concede sovereignty to China in exchange tor an agreement to share the Spratlys' resources. To avoid being provocative, China deliberately fails to mention sovereignty when it talks about joint development with its Southeast Asian counterparts.

Meanwhile, the ASEAN claimants are also unwilling to make some concession in their territorial claims and have no intention to address the problem of sovereign jurisdiction.l4<> Thus, putting off the question of sovereignty becomes an acceptable interim measure to the ASEAN claimants, too. This practice increases the possibility of reaching agreements on joint oil exploration and development schemes. For example, an agreement was signed in March 2005 by the state-owned oil companies ot China, Vietnam and the Philippines with regard to the conducting of oil pre-exploration surveys in the Spratlys. Philippine President Gloria Arroyo praised at the time that the agreement was a first implementation ot the provisions of the 2002 Declaration.1™

Charles Liu argues that all of the claimants will benefit more by promptly settling the sovereignty dispute and the ideal solution is for the other claimants to concede sovereignty to China in exchange for an agreement to share the Spratlys' resources.1,] This framework is of course very appealing to the PRC because it is in accordance with its policy of joint development. But it is very doubtful for the other claimants to give up their claims to the sovereignty of the Spratly Islands under the current circumstances. It is quite predictable that negotiations will not be able to resolve the sovereignty disputes over the Spratly Islands.

Although most commentators agree that resort to either courts or arbitral tribunals to resolve the sovereignty dispute seems highly unpredictable because of complexity,11' resort to an international court or arbitral tribunal, at least in my mind, would be the only possible method to resolve the sovereignty disputes it the disputing parties would want a final settlement. If the Taiwan issue could be settled, there would be an increasing possibility of China's use of the ICJ or an arbitral tribunal to settle the sovereignty disputes over the Spratly Islands. China's accession to the TAC is an impressive testament to its determination of its "good neighbour" policy as well as its willingness of peaceful settlement of the disputes  over the Spratly Islands. Before signing the treaty, China was suspected of adopting delay-strategy to accumulate its might tor war. Now China places itself under the binding force of the treaty.

Hie TAC not only reiterates the principles of peaceful settlement of disputes and prohibition of the threat or use of force but also provides a framework tor settlement of disputes.11' Article 13 stipulates that the Parties shall at all times settle the disputes likely to disturb regional peace and harmony among themselves through friendly negotiations.1" The TAC emphasizes the role of regional agents in settlement of disputes. Article 14 provides:

To settle disputes through regional processes, the High Contracting Parties shall constitute, as a continuing body, a High Council comprising a Representative at ministerial level from each of the High Contracting Parties to take cognisance ot the existence of disputes or situations likely to disturb regional peace and harmony.

In the event no solution is reached through direct negotiations, as stated in the treaty, the High Council shall have the power to recommend the appropriate means of settlement.155 The High Council can even perform as the third party during the settlement process. Namely, the High Council may offer its good offices, or upon agreement ot the parties in dispute, constitute itself into a committee of mediation, inquiry or conciliation.156 However, nothing shall preclude recourse to the modes of peaceful settlement contained in Article 33(1) of the Charter of the United Nations.157

Under the obligation of the TAC, when negotiations fail, the members in dispute generally have to make a choice between the High Council and international courts or tribunals as the third party to help them settle disputes. Regional efforts to resolve sovereignty disputes in the South China Sea have not been successful.1''* Tire practice among the members suggests that the disputants may prefer the ICJ rather than others. In 1998, Indonesia and Malaysia, two members of the TAC, opted for the ICJ to settle their sovereignty dispute over the islands of Pulau Liti-gan and Pulau Sipadan. In 2003, Malaysia and Singapore also brought their case concerning the sovereignty over the island ot Pedra Branca before the ICJ when both sides could not reach a settlement agreement by negotiations.153 China might follow suit if it would want to settle the sovereignty disputes.

Meanwhile, we must be mindful of the fact that the conventional dispute settlement mechanisms of submission to an arbitral panel, judicial solution, or submission to a regional agency are inadequate to address unconventional disputes as complicated as in the South China Sea.160 Numerous variables related to the sovereignty disputes necessitate a much more complicated settlement framework to be designed.

For settlement of the sovereignty disputes over the Spratly Islands, the most delicate issue for the PRC is the status ofTaiwan (the ROC). The ROC represented China to establish a physical presence on the Spratly Islands following the Japanese departure after World War II.161 The ROC announced its claim as early as 1947 and Itu Aba, the largest island of the Spratlys, has been under its continuous and peaceful control since 1956. This is an important evidence for supporting China's legal claim to the islands. Since the PRC began to act as the legal government to represent China, the ROC, which controls Taiwan, became diplomatically isolated in Southeast Asia. Now the Southeast Asian states involved in the Spratlys disputes have no diplomatic relations with Taiwan and deny Taiwan as a state. In other words, from the viewpoint of other claimants, Taiwan has no legal standing in the disputes."'2 So it is a reasonable expectation that Taiwan cannot protect its claims to the Spratlys on its own.163 No matter what kind of dispute exists between Beijing and Taipei, it is always the case that they claim the Spratly Islands under the name of China. The Spratly Islands dispute offers a unique opportunity for Beijing and Taipei to work together.164 Hopefully, the PRC and ROC could negotiate to reach an agreement to set up a joint delegation to represent China for their claim.

If Taiwan were to refuse to join Mainland China, the PRC would also have the capacity to protect its claims to the Spratlys on its own. The assumed new framework to settle the sovereignty disputes over the Spratly Islands consists of three phases: two diplomatic and one judicial or quasi-judicial. In the first phase, China could negotiate with other disputing States either bilaterally or multilateral ly about joint development project with sovereignty shelved. They would have to reach some joint development agreements by negotiations. In the expected joint development agreements, die disputing States could stipulate that settlement of sovereignty would not affect the joint development projects. This kind of practice can be found in several cases. Before the United Kingdom and France took the Minquiers and Ecrehos case"1' to the ICJ, they had already resolved the issue ot fishing rights around the islands in a separate agreement.166 During Sino-Russian border settlement, the Parties also signed the agreement on joint economic use ot several disputed islands ot border rivers and of waters around them.167

Actually, in the South China Sea, China and some Eastern Asian states have embarked upon joint development projects. For example, in March 2005, the state-owned oil companies of China, Vietnam and the Philippines signed a tripartite agreement to jointly develop oil and gas resources in the disputed area. Later the same year, China and Vietnam reached another agreement on promoting the joint exploitation in the South China Sea.168 These initiatives are indicative of the political will of the states concerned to develop the disputed area jointly.

Obviously, the purpose of signing joint development agreements is to guarantee the disputing parties' right to benefit from the natural resources in the disputed area. Joint development is the most important form of provisional arrangement. The successful arrangement ot economic interests around the Spratlys would help the disputants to build up their confidence in settling their disputes, or at least avoiding conflicts. Only with such an arrangement would it be possible for the disputing parties to settle their disputes by either negotiations or a third party. Signing joint development agreements would be the core issue in the new framework construction because such agreements would lay the foundation for the following phases.

In the second phase, the disputing parties could agree to use relevant principles and rules elaborated by the ICJ, international tribunals or arbitrations to discuss the issue of sovereignty concerning the Spratly Islands. If they could achieve a settlement by negotiations, that would be great. It not, they could move on to the third phase — signing a special agreement to submit their disputes to a third party for settlement if they would not settle their disputes by negotiations in a reasonable time.

Vietnam has expressed a desire to seek international arbitration to resolve the issue of sovereignty should talks fail.169 But such a complicated sovereignty dispute as the Spratly Islands case would be more suited to the ICJ with regard to its rich experience in dealing with various sovereignty disputes and its general jurisdiction that enables it to deal with any issue and answer any question relating to international law. In addition, the recent cases, such as Indonesia v. Malaysia170 and Malaysia v. Singapore,1 1 have given the Asian States some confidence in the ICJ. 2 In any case, the two cases provide the Asian disputants with very valuable chances to appraise their legal rights and bases concerning the sovereignty of the Spratly Islands. China, Vietnam, Malaysia and Brunei have not deposited the declarations recognizing the compulsory jurisdiction of the ICJ. Although the Philippines have deposited the declaration, it made the reservation that the compulsory jurisdiction shall not applied to its territorial disputes.I7> Thus, if they would choose the ICJ for settlement, they would have to sign a special agreement to accept the jurisdiction of the ICJ.

If the result of the joint development agreements were satisfactory, the last two phases would be probably unnecessary, because the disputing parties, by then, may feel the disputes of sovereignty would have become much less important and woidd rather leave the disputes unresolved.

As a rule, sovereignty, which is perceived by each claimant as exclusive and sacred, is closely associated with nationalism and any claim related to it is hardly given up. The disputes of sovereignty over the Spratly Islands are intertwined with multiple considerations that have both domestic and foreign policy implications.1 q To achieve a peaceful settlement of such complicated disputes or at least, an arrangement for settlement of the disputes, the governments concerned must temper nationalism and cooperate with each other in building up a new dispute settlement framework.

__________

13 B. Kwiatkowska. *The Eritrea/Yemen Arbitration: Landmark Progress in the Acquisition of Territorial Sovereignty and Equitable Maritime Boundary Delimitation 32 Ocean Dev. & Int'l L. (2001), pp. 1-25.

 

143 See Art. 4 of the Declaration.

N. H. Thao. 4The 2002 Declaration on the Conduct of Parties in the South China Sea: A Note' 34 Ocean Dev. dr Int'l L. (2003), p. 281. See also S. Tonnesson, 'Sino-Vietnamese Rapprochement and the South China Sea Irritant1 34 (I) Security Dialogue (2003), pp. 55—6.

143 Peoples Daily News, at <http://english.people.com.cn/200310/10/eng20031010_ 125711 .shtml> [19 Mar. 2008].

144 Art. 17 of the TAC provides, ".. .The High Contracting Parties which are parties to a dispute should be encouraged to take initiatives to solve it by friendly negotiations before resorting to the other procedures provided for in the Charter of the United Nations,"

J. M. V. Dyke and N. A. Ludwig. Sharing the Resources of the South China Sea (Martinus Nijlioff Publishers,. Netherlands 1997).

 

149 R. Emmers. Maritime Disp ute in the South China Sea: Strategic and Diplomatic Status Quo (Institute of Defence and Strategic Studies, Nanyang Technological University, Singapore 2005), p. 14

152    C. Liu. 'Chinese Sovereignty and Joint Development: A Pragmatic Solution to the Spratly Islands Dispute' 18 Loy. L. A. Intl drComp. L. J (1995—1996), pp. 883—92. 

152 D. Denoon and S, Brams. 'Fair Division: A New Approach to the Spratly Islands Controversy' 2 (2) International Negotiation (1997), p. 316.

 

10 The Sovereignty over Pulau Litigan and Pulau Sipadan (Indonesia/Malaysia) Case, ICJ Reports 2002, p. 625.

171 The Sovereignty over Pedra Brancal/Pulau Batu Puteh, Middle Rocks and South Ledge (Malaysia/ Singapore) Case. The ICJ Is still deliberating on the case,

172 J. Shi. Asia and International Court of Justice', a speech by H, E, Judge Shi Jiuyong on 14 April 2004, at <http://www.iinu.edu/hq/japanese/use/eventy2004/l4april04speech.pdf> [19 Mar. 20081.

175 See the reservation made by the Philippine government on 18 January 1972, at <http://www.icj-cij.org/jurisdiction/index.phprpl=5&p2=l&p3=3&code=PH> [20 Mar. 20081. 174 C, C. Joyner, op. cit. (1999), p. 81.