When Chinese Foreign Minister Wang Yi proposed on July 24 the idea of joint energy ventures with the Philippines in areas they both contested in the South China Sea, the conciliatory remark was strongly supported by his Filipino hosts.
Philippine Foreign Secretary Alan Peter Cayetano said the two sides were “exploring if we can explore”, while former House of Representatives Speaker Jose De Venecia Jr suggested that Manila “suspend” its sovereignty over disputed areas to pave the way for joint energy development agreements.
President Rodrigo Duterte said the day before Wang’s visit that a joint partner had already been found to develop oil fields and that joint exploration and exploitation would begin later this year. “When [China] start[s] to excavate the gas and oil, I tell you it’s going to be just like a joint venture…it will be fair.”
The Philippines suspended drilling in the contested Reed Bank in 2014 while the Permanent Court of Arbitration (PCA) at The Hague deliberated a case Manila filed against China to adjudicate their dispute. That decision, handed down on July 12, 2016, ruled in favor of the Philippines’ claims and against China’s expansive nine-dash-line map.
Duterte, who has prioritized building strong bilateral relations with China since assuming office in June 2016, has not pressed the PCA’s verdict (which China has refused to recognize), while making it clear that he wants to avoid conflict in the maritime area.
On the surface, the idea looks appealing and is often presented as a panacea to the South China Sea conundrum. Yet history has shown the difficulties of negotiating a mutually acceptable resource-sharing agreement among rival claimant states, especially when China claims almost the entirety of the disputed area.
For decades the concept of joint development, which is enshrined in international law, has been repeatedly raised in various fora as a potential solution to the maritime disputes that have put the region on edge as China had recently moved to militarize the islands and features it controls.
There is historical precedent for pursuing joint development. China’s previous paramount leader Deng Xiaoping saw joint development as an optimal modus vivendi to allow China to assert its maritime claims, while avoiding tensions and conflict with neighboring countries.
Deng preferred “setting aside dispute[s] and pursuing joint development” with China’s neighbors, both continental and maritime. His handpicked successors, Jiang Zemin and Hu Jintao, in the main followed the dictum.
Massachusetts Institute of Technology scholar Taylor Fravel shows in an authoritative study that in 17 of 23 territorial disputes with various land and sea neighbors, China has either abandoned or significantly reduced its original claims since the Communist Party took power in 1949.
In those concessions, the study shows, China has abandoned over 1.3 million square miles of land.
In Deng’s calculus, China’s economic miracle wouldn’t have been possible without a relatively stable regional environment. Protracted hot wars with neighboring states, previously fomented by exporting Maoist revolutionary ideology, would have torpedoed the country’s economic rise and provided rival powers such as the United States and Japan greater excuse to expand their military footprints in the region.
As the world’s leading exporting nation, Beijing has a strong interest in ensuring the stability of sea lines of communications and trade linkages that connect China’s factories to global markets and facilitate the unhindered flow of its considerable energy imports. An estimated US$5 trillion worth of trade flows through the South China Sea each year.
Two decades since Deng’s death, China is once again putting the idea of joint energy development on the table. This time, however, Beijing is negotiating from a position of strength, claiming almost the entirety of the South China Sea and boasting a massive naval as well as paramilitary fleet to fortify the militarized islands it has recently built in disputed areas.
“I hope that the two sides could make the decision so that the goodwill embodied by Mr. Deng Xiaoping’s proposal 31 years ago could lead to fruition today and could benefit the people of both countries,” said Chinese Foreign Minister Wang Yi during his recent two-day high profile visit to Manila.
For many Filipinos, however, the idea of joint development has an uneasy ring of déjà vu. De Venecia, who is currently the Philippines’ special envoy to the Asia Pacific Economic Cooperation (APEC), a free trade group, was a prominent political leader during former President Gloria Macapagal Arroyo’s (2001-2010) tenure.
Arroryo, who is now a deputy speaker of the House of Representatives and a key foreign policy adviser to Duterte, was famous for ushering in a brief ‘golden age’ of bilateral relations with China by welcoming large-scale Chinese infrastructure investments and a resource-sharing agreement, known as the Joint Maritime Seismic Undertaking (JMSU), for the South China Sea.
The JMSU provided a framework for joint exploration of energy resources in overlapping areas with national energy companies of China, Vietnam and the Philippines. It didn’t take long, however, before big-ticket Chinese projects, including the North Railway and the Philippine National Broadband Network scheme, were embroiled in massive corruption scandals that nearly toppled her government.
The JMSU, which had a confidentiality provision and was negotiated under extreme secrecy, came under sustained political attack by political opponents who portrayed the opaque scheme as unconstitutional and treasonous. Amid a public backlash, the Arroyo administration shunned renewing the agreement after it expired in 2008.
The Philippine constitution, which prioritizes the protection of the nation’s 200-mile Exclusive Economic Zone (EEZ), places severe restrictions on any joint development agreements in sovereign territories. It also mandates any joint development deal be made between the Philippine government and foreign private companies, not with national governments.
Above all, contracting parties should unequivocally recognize the Philippines’ sovereignty over the area in question.
Any joint development agreement between China and the Philippines, legal analysts say, could represent a violation of last year’s PCA decision that ruled in favor of the Philippines over China, a verdict which stated China and the Philippines do not have overlapping EEZs, including over the contested Scarborough Shoal which lies within Manila’s EEZ but China now controls.
Any joint development agreement advanced by Duterte will thus likely require the Philippines to (i) amend its constitution and/or (ii) ignore key dimensions of the PCA ruling under the United Nations Convention on the Law of the Sea (UNCLOS), of which both China and the Philippines are signatories.
The Duterte administration faces an unfavorable political environment to push through charter change and abandon last year’s arbitration ruling, which many including the United States and other claimant states viewed as an important law-based precedent for the long-term resolution of the disputes.
While Duterte pushes for rapprochement with China, many Filipinos remain deeply suspicious of Beijing’s ultimate intentions. Influential figures from previous Philippine administrations and other branches of government have openly expressed their skepticism about the viability of any resource-sharing agreement in contested areas.
The Duterte administration faces an unfavorable political environment to push through charter change and abandon last year’s arbitration ruling, which many including the United States and other claimant states viewed as an important law-based precedent for the long-term resolution of the disputes
Supreme Court Associate Justice Antonio Caprio, for one, has strongly opposed the joint development proposal, arguing: “You cannot enter into joint development within our EEZ. That’s prohibited by the constitution.”
Others are concerned about a possible repeat of the Arroyo administration fiasco, where China apparently sought to win territorial concessions through the offer of large-scale investment initiatives that were eventually upended on corruption allegations involving Arroyo’s own husband.
Many Filipinos will thus likely strongly oppose and mobilize against any deal where China’s terms of engagement are perceived as, “what is ours is ours, what is yours we share.” While the concept of joint development makes sense in abstract terms, as former Chinese paramount leader Deng envisioned, modern political and legal realities limit the scope for such a cooperative deal.
what happen? Chuck Serna had a good comment about this writer and now it is gone.
The arbitration ruling is null and void since any kind of arbitration to occur both or all parties must agree to participate. China did not participate nor did she chose to since her position was to negotiate and compromise with the Philippine government directly.
If China were allowed to own the South China Sea, it is also logical for China to claim sovereignty over other seas; it is also logical for other countries to claim sovereignty over their bordering seas. If they do, China in pariticular would be obliged to support their claim.
Wood Wu : Read recent history of China and Deng Xiaoping. Chineese people had to pay – millions of them-a heavy price. From the start of Communist revolution till today, punishment, imprisonment loss of one’s land. Remember in Tinan Mien square, Deng ordered tanks to crush skulls of demonstrators like coconuts! Tibet has been occupied and thousands of monasteries are decimatdd. Tibetans are today prisoners in their own land
True, millions have been raised from ghastly poverty in China. Is this the only criterion of civilized life?
China needs to become a member of civilized nations and no need to use such brutality and worship of power.
Perry Kamath China’s attitude and position in the world is based on her history and the study of what factors restricted her develoment and progress for two centuries. The west dominated the East Asia, the Middle East, India and Africa until WW II. After WW II former countries in the West and Japan could no longer hold on to former territories and colonies due to the depletion of financial resources and weakening of military power. Only the United States reaped the benefits and profits of the war. The rest of the countries had to borrow from the US to finance reconstruction and the countries that were defeated had to pay war indemnities to the victorious nations except China, since Generalisimo Chiank kai-Shek forgave Japan of any war indemnities owed to China.Chiang was a graduate of a Japanese military academy so he was partial to Japan and ruling elite in China but neglectful and impartial to the mainland Chinese peasantry
Wood Wu Ancient maps and historical documents such as the Potsdam Agreement and the Unconditional Surrender of Japan at the end of WW II will refute other country’s claims. When these documents were signed. Philippines was not yet a nation state but a territory of the United States so she was not included in the signing of the treaty. The same goes for Vietnam. she was a colony of France and not yet a sovereign nation. Japan’s unconditional surrender clearly stated that all territories taken from China will be returned to China which included Islands and shoals in the South China Sea. It wasn’t until the independence of Philippines and Vietnam and the revision of modern maritime law that China’s claims were being challenged by the countries involved in the dispute.
Deng Xoaping’s abstract concept of joint development, at this juncture, may indeed be limited by modern political and legal reality but it is worthy to note that since China is the de facto “owner” of the vast portion of the West Philippine Sea/South China Sea and no other superpower could wrestle the same from her without armagedonic upshot. Hence, it is pragmatic that while our leaders/politicians are ambivalent in touching the Constitution, we should make the most of the tranquility in the contested territory which is sure to create tangible economic gains, for in the last analysis, the Constitution is in itself a mere western concept that is not inscribed to be venerated biblically.
Perry Kamath …Thanks for you advice.
Everything that Richard Heydarian says must be taken with a big grain of salt. This guy can talk like he is the one and only expert on political affairs. From where did this guy crawl out? The reality is the WPS is a done deal. China has the military and economic might, while the PHL has neither. PDU30 is trying to make the most out of the situation; and that is applying what the Deng Xiaoping logic which says that controntational attitudes will not get anybody anywhere. Even the US, which is the biggest military and economic power in the world, cannot do anything about the WPS, short of starting WW3. The point right now is to have really good and savvy negotiators when the negotiations for joint developments begin.
Unilateral caveat will not defeat a universal agreement. No unilateral declaration of a 9 dash line will undermine what is fair and just law among nations. All states and nations/countries are entitled to 12 miles territorial waters and 200 miles of exclusive economic Zones from their farthest shoreline. Beyond this is an International waters. What China is claiming is about all of that body of water as far as a thousand miles from Hunan their southernmost Chinese island almost giving non at all to other neighboting countries since their claims are without any coordinates. China was given years and much enough time by the world tribunal to present evidence and arguments in support of their claim and they did not or refuse to do so. I don’t believe China and the world would agree if India would claim all of the Indian Ocean. Just because it is has a name as SCS that all that body of water belong to them. Their only basis now is might and economic power to entice other countries to borrow money from them to finance their infra-projects in order to softem their resistance to their claims; which they will at all times convert it to equities; the moment a borrowing countriy can not pay like what happen to Sri Lanka lately. This is tantamount to confiscation.