A year after receiving a favorable ruling from the Permanent Court of Arbitration in The Hague, it is incumbent upon the Philippine government to take advantage of the decision and take the lead in resuming talks that would pave the way for an enforceable Code of Conduct in the disputed sea route.
It is critical to emphasize that, despite criticism of the ruling’s lack of teeth, it is final in character. No entity, whether individual or country, can reopen what has been adjudicated in the arbitration process. The decision, once handed down, becomes an integral part of international law. As a legal precedent for Asean claimant-states in clarifying their maritime entitlements and boundaries, it should thus be recognized in the envisioned Code of Conduct.
The legacy of such a binding mechanism would be two-fold. On one hand, the most immediate impact is averting the escalating risk of military confrontation in the South China Sea. It is clear that Beijing has long been intent on flexing its military muscle in the region, evidenced by near-nonstop military build-up of military facilities in the disputed waters.
Purportedly warmer relations between Manila and Beijing did little to change this. Just recently, the Asia Maritime Transparency Initiative released photos that show new missile shelters and radar and communication facilities being installed in Fiery Cross and Mischief and Subi Reefs. The sort of delicate peace in the region is thus undermined by what many see as China’s willful disregard and flouting of conventional diplomacy and international law.
This, even as we see interesting developments in the disputed waterway, including reports of US aircraft and vessels participating in so-called Freedom of Navigation operation around Mischief Reef in May, which some describe as an underhanded challenge to Chinese control of the region. Elsewhere, Indonesia, another claimant-state, recently renamed the waters north of its Exclusive Economic Zone the “North Natuna Sea,” which one Chinese foreign ministry spokesman dismissed as nonsensical.
But the consequences of such military build-up have by no means been limited to armed conflict and combatants. For so long now, small Filipino fishermen have complained of constant intimidation and harassment by Chinese vessels in what used to be their traditional fishing grounds.
Clearly, then, there is a link between political peace and economic harmony in this case. The second benefit of a binding Code of Conduct in the South China Sea is guaranteeing the continued maritime traffic—and therefore trade and commerce—in the important sea route.
After all, up to $5 trillion worth of goods and logistics pass through the shipping lanes of the South China Sea per year. This constitutes an astounding 40 to 60 percent of the world’s traded goods, including half of oil-tanker shipments, half of the world’s merchant fleet tonnage, and a third of all maritime traffic worldwide.
The economic impact of any semblance of obstruction can be most drastic for the oil supply. Oil transported through the Malacca Strait en route to East Asia via the South China Sea accounts for up to two-thirds of South Korea’s energy supply, nearly 60 percent of Japan’s and Taiwan’s, and 80 percent of China’s. For perspective, this is cumulatively triple what passes through the Suez Canal and fifteen times the volume that traverses the Panama Canal.
The cost of rerouting oil tankers is thus similarly high. A switch via the Lombok Strait and east of the Philippines can cost Japan, for instance, up to $600 million per year. For Australia, the figure can go up to as high as $20 billion worth of cargo a year.
The Philippines must thus endeavor to show that the stability of the South China Sea will be to every party’s benefit, both in fostering political peace and economic prosperity. A Code of Conduct can be a viable vehicle to unite the region in this manner, something that the Duterte administration can use in not only enhancing the country’s standing among our peers but in ensuring its legacy for generations to come.
