SOUTH CHINA SEA ARBITRATION

(PCA Case Number 2013–19)

Between The Republic of the Philippines and The People’s Republic of China

Before An Arbitral Tribunal Constituted Under Annex VII to the United Nations Convention on the Law of
the Sea 1982

Registry: Permanent Court of Arbitration Date of Award: 12 July 2016

[1]

Preface

The South China Sea has, especially in contemporary times, emerged as a region of great interest to
global players, in terms of strategic and economic interests of the competing States. As Foreign Policy
puts it, “There’s no tenser set of waters in the world than the South China Sea. For the last few years,
China and its neighbors have been bluffing, threatening, cajoling, and suing for control of its
resources.”[2]

To best understand the current situation in the South China Sea from a legal point of view, it is
imperative to refer back to the judgment passed by the Arbitral Tribunal of the Permanent Court of
Arbitration last year, in response to the claims brought by Philippines against China, primarily regarding
maritime rights, entitlements and zones in the South China Sea, as well as for the protection of the
marine life and the environment of the region, under the United Nations Convention on the Law of the
Sea, 1982.

China has always argued for historic rights, as demarcated by the ‘Nine Dash Line’ on its official maps of
the region in question; other stakeholders, however, dispute this claim, as shown in the arbitral
proceedings. As is noted:
… While it was the Philippines which brought the case, it wasn’t the only interested party in the Asean.
Three other members have claims to parts of the South China Sea or the Spratly Islands or the Paracels
that conflict with China’s expansive nine-dash theory: Brunei, Malaysia, and Vietnam. Indonesia, Asean’s
largest economy, has continuing run-ins with Chinese fishing vessels and occasionally with the Chinese
Coast Guard in its exclusive economic zone.[3]

Now, as the Association of South East Nations (ASEAN) heads towards working on the enforcement of
this arbitration award from last year (2016), and attempting to employ a code of conduct for the South
China Sea, it becomes even more important to look at the arbitral ruling from an objective vantage
point.

Case Brief

The South China Sea Arbitration was conducted between the Republic of the Philippines and the
People’s Republic of China by the Permanent Court of Arbitration (PCA), under the 1982 United Nations
Convention on the Law of the Sea (UNCLOS). The arbitration is related to disputes between the Parties
regarding the legal basis of maritime rights and entitlements, the status of certain geographic features,
and the lawfulness of certain actions taken by China in the South China Sea; in particular, the following
four issues, as raised by Philippines:

To resolve a dispute between the parties regarding the source of maritime rights and entitlements in the
South China Sea;

To resolve a dispute between the parties concerning the entitlements to maritime zones that would be
generated under the Convention by Scarborough Shoal and certain maritime features in the Spratly
Islands that are claimed by both the parties;

To resolve a series of disputes concerning the lawfulness of China’s actions in the South China Sea, vis-à-
vis interfering with Philippine’s rights, failing to protect and preserve the marine environment, and
inflicting harm on the marine environment (through land reclamation and construction of artificial
islands);

To find that China has aggravated and extended the disputes between the Parties by restricting access
to a detachment of Philippines Marines stationed at Second Thomas Shoal.

While China and Philippines are both parties to the UNCLOS, China specifically made a declaration in
2006 to exclude maritime boundary delimitation from its acceptance of compulsory dispute settlement.
In addition, China has shown disagreement with Philippines’ decision to take the matter to arbitration
and has decided neither to agree with the decision of the Tribunal nor to participate in the proceedings.
The Tribunal, on its end, has taken cognizance of these factors and has purported to not deal with
delimiting maritime boundaries. Furthermore, the Tribunal did not bar the proceedings, on the basis of
Article 9 of Annex VII of UNCLOS[4]. In addition, the Tribunal also noted that despite China’s absence
from the proceedings, since it is a party to the UNCLOS, the decision of the Tribunal would, in fact, be
binding upon it, pursuant to Article 296 (1)[5] and Article 11 of Annex VII[6].

China’s Foreign Ministry, further, stated its position with regard to the proceedings by publishing a
Position Paper in 2014[7]. It claimed that the Tribunal lacks jurisdiction over the matter because:

The essence of the subject-matter of the arbitration is the territorial sovereignty over the relevant
maritime features in the South China Sea;

China and the Philippines have agreed, through bilateral instruments and the Declaration on the
Conduct of Parties in the South China Sea, to settle their relevant disputes through negotiations;

Philippines’ disputes would constitute an integral part of maritime delimitation between the two
countries.

The Tribunal considered China’s Position Paper as a plea on jurisdiction, and conducted a separate
hearing on the issue of jurisdiction and admissibility. Additionally, the Tribunal also declared that it
would honour China’s declaration of 2006 and the UNCLOS and would neither delve into issues of
maritime boundary delimitation or questions of sovereignty. The Philippines also stated that it, “does
not seek in this arbitration a determination of which Party enjoys sovereignty over the islands claimed
by both of them. Nor does it request a delimitation of any maritime boundaries.”[8]

Pursuant to this, the Tribunal issued its Award on Jurisdiction[9] in October 2015, in which it concluded
that it did indeed have jurisdiction in the case, as per Philippines’ Final Submissions[10], and that China’s
lack of participation would not prove to be a bar to its proceedings. It, further, concluded that the
treaties China was relying on were either political in nature and not legally binding[11], or that they did
were legally binding and yet did not bar either Party from alternative means of dispute resolution[12]. In
accordance with Article 283 of the UNCLOS[13], the Tribunal found that this requirement was met in the
diplomatic communications between the Parties and that Philippines’ initiation of proceedings under
the UNCLOS did not constitute an abuse of of process as claimed by China.

The Tribunal, proceeding with the first two submissions made by the Philippines, considered the validity
of China’s claim to historic rights in the maritime region of the South China Sea and the ‘Nine-Dash Line’.
Through a lengthy analysis of the text and context of the Convention, in line with the principles set out
in the Vienna Convention on the Law of Treaties, the Tribunal established that the Convention
supersedes any treaties in force before its coming into force. It questioned China’s claim to historical
rights in the region, and established that China’s state practice does not show that China had been
enjoying any historical rights in the South China Sea; rather, it was enjoying the freedom of the high seas
and since it did not create bar to other states’ usage of the same, it could not be understood as being a
historical right. Furthermore, since China’s publishing of the same in its Notes Verbales in 2009, many
states have objected to its claim as well. “The Tribunal concludes that the Convention superseded any
historic rights or other sovereign rights or jurisdiction in excess of the limits imposed therein.”[14]
However, the Tribunal also concluded that its jurisdiction was limited to the claims of historic rights on
the maritime region and not to the land masses in the South China Sea, i.e. if it can claim historic rights
on any of the islands, then it may also be able to claim maritime zones (as per the Convention) on the
basis of these islands.

Next, the Tribunal looked at Philippines’ submissions 3 to 7, concerning the nature of the features in the
South China Sea. It differentiates between low-tide elevations[15], high-tide features[16] and rocks[17].
In its Award on Jurisdiction, the Tribunal clarified that:

This is not a dispute concerning sovereignty over the features, notwithstanding any possible question
concerning whether low-tide elevations may be subjected to a claim of territorial sovereignty. Nor is this
a dispute concerning sea boundary delimitation: the status of a feature as a “low-tide elevation”,
“island”, or a “rock” relates to the entitlement to maritime zones generated by that feature, not to the
delimitation of such entitlements in the event that they overlap.[18]

The Philippines put forward three categories for classifying low-tide elevations: where a low-tide
elevation is located within 12 miles of a high-tide feature[19], where the low-tide elevation is beyond 12
miles but within the state’s exclusive economic zone or continental shelf[20], and where the low-tide
elevation is located beyond the areas of natural jurisdiction[21].

For the purpose of identifying the nature of the features in the South China Sea, the Tribunal relied upon
satellite imagery that had been conducted on the area and direct surveys that had been carried out, by
navies or otherwise, in the area, and relied upon maps that were sufficiently detailed. They chose a
certain tidal height to maintain uniformity across the features, and decided to rely, in cases where there
had been significant man-made changes, alterations or construction on the features, upon
maps/imagery/surveys that depicted the features as they had been in their original form.[22]

Again the Tribunal relied upon statements previously made by China to obtain their stance on the
nature of the features, since China had neither submitted any document to the Tribunal nor had it
discussed these in its Position Paper.

The Tribunal concluded that Scarborough Shoal, Cuarteron Reef, Fiery Cross Reef, Johnson Reef,
McKennan Reef and Gaven Reef (North) were all found to be high-tide features. The Tribunal further
noted that for the purposes of Article 121(3), the high-tide features at Scarborough Shoal and the reefs
were rocks that cannot sustain human human habitation or economic life of their own and so have no
exclusive economic zone or continental shelf. The Tribunal found the same to be true of the Spratly
Islands and so concluded that China, therefore, has no entitlement to any maritime zone in the area of
Mischief Reef or Second Thomas Shoal; they do, however, form part of the exclusive economic zone and
continental shelf of the Philippines as they lie within 200 nautical miles of the Philippines’ coast and
there are no overlapping entitlements in the area with respect to China.

On the contrary, Hughes Reef, Gaven Reef (South), Subi Reef, Mischief Reef and Second Thomas Shoal
were all found to be low-tide elevations, of which Hughes Reef lay within 12 miles of McKennan Reef
and Sin Cowe Island, Gaven Reef (South) lay within 12 miles of Gaven Reef (North) and Namyit Island,
and Subi Reef lay within 12 miles of the high-tide feature of Sandy Cay on the reefs to the west of Thitu.

In the issue of Chinese interference with the living and non-living resources (primarily concerned with
fishing practices in the South China Sea and oil and gas exploration and exploitation) of the Philippines,
the Tribunal considered diplomatic statements from China to the Philippines and regulations related to
the matter that China had passed domestically. The Philippines put forward four contentions related to
living resources: China’s prevention of fishing by Philippine vessels at Mischief Reef since 1995, and at
Second Thomas Shoal since 1995, China’s revision of the Hainan Regulation[23] and China’s moratorium
on fishing in the South China Sea in 2012[24]. The Tribunal finds that China had breached Articles 77[25]
and 56[26] of the Convention through the operation of its marine surveillance vessels (which interfered
with Philippines’ oil and gas exploration) and through its moratorium on fishing which interfered with
the exclusive economic zone of the Philippines, respectively.

The Tribunal also found China in breach of Article 58 (3)[27] of the Convention, due to its failure to
prevent fishing by Chinese flagged ships in the exclusive economic zone of the Philippines, failing to
respect the sovereign rights of the Philippines over its fisheries in its exclusive economic zone.

Submission 10 of the Philippines related to China’s interference with Philippines’ fishing vessels and
practices in the Scarborough Shoal. While both the states had conflicting views on the situation (China
believed that it was Philippines who was causing the interference) and both claimed historic rights
(Philippines distinguished this by clarifying that it only referred to historic fishing rights) to the region,
the Tribunal opined that China was, in fact, in contravention of the Convention by interfering with the
traditional fishing practice of the Philippines in its exclusive economic zone through the deployment of
its official ships in the region. The Tribunal also noted that this decision does not depend on the question
of sovereignty, and that the Tribunal once again refrained from commenting on the matter.
 Philippines’ successive contention related to China’s activities on the reefs in the South China Sea, with
regards the practices it had adopted for the purpose of large-scale construction and reclamation at
seven locations in the Spratly Islands[28], and its practices with regards to fishing[29] in the South China
Sea. Philippines claimed that China had been harming and causing damage to the marine environment
of the South China Sea through these practices and despite objections from the surrounding states,
China had not ceased its actions. It was also noted that while some of the fishing ships were not state-
appointed ships and were being manned by non-state actors, the Chinese government had neither
condemned their actions nor made any efforts to stop them from proceeding. The Tribunal, assisted by
three independent experts on coral reef biology, expert briefs and satellite imagery, found that China
was in breach of the Convention for failing to stop the fishing vessels from engaging in harmful
harvesting practices[30] and also for its island-building activities[31]. The Tribunal further opined that
China’s construction on Mischief Reef, without authorization from Philippines was in violation of
Philippines’ sovereign rights in its exclusive economic zone and continental shelf and a breach of the
Convention[32].

The next consideration before the Tribunal was the demeanour of China’s law enforcement vessels at
Scarborough Shoal[33] and the lawfulness of these actions. The Philippines also raised the issue under
the relevant provisions of the Convention on the International Regulations for Preventing of Collisions at
Sea, 1972 (COLREGS). The Tribunal found that China, through the actions of its law enforcement vessels,
endangered Philippine vessels and personnel and created a serious risk of collision and found China in
breach of Article 94 of the Convention[34].

The Tribunal, in response to Submission 14 of the Philippines, opined that China had, in the course of
the proceedings of this arbitration, aggravated and extended its disputes with Philippines, through its
actions of dredging, artificial island-building and construction activities[35].

Lastly, the Tribunal did not find it necessary to make any further declaration, owing to the fact that both
the parties are already parties to the Convention and are already obliged to comply with it.

Tribunal Issues Landmark Ruling in

South China Sea Arbitration
By Robert D. Williams
 Tuesday, July 12, 2016, 11:28 AM

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The wait is over: a judgment has been issued in the Philippines v. China South China
Sea arbitration. A five-judge tribunal constituted under the Permanent Court of
Arbitration (PCA) in The Hague has released its much-anticipated Award concerning
the Philippines’ challenge to a number of China’s maritime claims and activities in the
region. The Philippines initiated the arbitration in January 2013 under the dispute
settlement procedures of Annex VII to the 1982 United Nations Convention on the Law
of the Sea (UNCLOS).

The unanimous, 501-page Award and the eleven-page press release from the PCA can be
found here.

Bottom line: A nearly across-the-board win for the Philippines, and a searing verdict on
the lawfulness of China’s artificial island construction and other actions in the South
China Sea.

Summary of Key Claims and Holdings

The Philippines’ claims fell into four general categories. The ruling of the Tribunal on
each category of claims is summarized below:

1. The broadest claim was a challenge to China’s “nine-dash line” covering most of the
South China Sea. China has never clarified whether the line represents a claim to the
islands within the line and their adjacent waters; a boundary of national sovereignty
over all the enclosed waters (including, but not limited by, the land features inside the
line); or a “historic” claim of sovereignty or some other set of historic rights to the
maritime space within the line. The Philippines sought a declaration that the countries’
respective rights and obligations regarding the waters, seabed, and maritime features of
the South China Sea are governed by UNCLOS. As such, China’s claims based on any
“historic rights” to waters, seabed, and subsoil within the nine-dash line are contrary to
UNCLOS and invalid. (See Table: Claims 1 and 2)

Holding: UNCLOS “comprehensively” governs the parties’ respective rights to

maritime areas in the South China Sea. Therefore, to the extent China’s nine-dash line is
a claim of “historic rights” to the waters of the South China Sea, it is invalid.

Reasoning: Whatever historic rights China may have had were extinguished when
UNCLOS was adopted, to the extent those rights were incompatible with UNCLOS.
2. The Philippines sought a determination as to whether certain land features in the
Spratly Islands claimed by both China and the Philippines are properly characterized as
islands, rocks, low tide elevations (LTEs), or submerged banks. Under UNCLOS, an
“island” generates both a territorial sea of 12 nautical miles and an exclusive economic
zone (EEZ) of up to 200 nautical miles, subject to delimitation of a maritime boundary
with any other countries’ overlapping territorial seas or EEZs. A “rock” is entitled to a
territorial sea no greater than 12 nautical miles, but not an EEZ. LTEs and submerged
banks do not generate any such entitlements. (See Table: Claims 3, 4, 6, and 7)

Holding: None of the features in the Spratly Islands generates an EEZ, nor can the
Spratly Islands generate an EEZ collectively as a unit. As such, the Tribunal declared
certain areas are within the Philippines’ EEZ and not overlapped by any possible
Chinese entitlement.

Reasoning: The baseline of analysis is what the features can sustain in their “natural
condition” (i.e., not after construction of artificial islands, installation of desalination
plants, etc.). Based on historical evidence, none of the features in the Spratly Islands can
sustain either a stable community of people or economic activity that is not dependent
on outside resources or purely extractive in nature. The current presence of personnel
on the features is dependent on outside support and does not reflect the capacity of the
features in their natural condition.

3. The Philippines sought a declaration that China violated UNCLOS by interfering with
the Philippines’ rights and freedoms within its EEZs. This includes preventing
Philippine fishing around Scarborough Shoal, violating UNCLOS’s environmental
protection provisions through construction and fishing activities that have harmed the
marine environment (including at Scarborough Shoal, Second Thomas Shoal, and
Mischief Reef), and by dangerously operating law enforcement vessels around
Scarborough Shoal. (See Table: Claims 5, 8, 9, 10, 11, 12, and 13)

Holding: China violated the Philippines’ sovereign rights in its EEZ. It did so by
interfering with Philippine fishing and hydrocarbon exploration; constructing artificial
islands; and failing to prevent Chinese fishermen from fishing in the Philippines’ EEZ.
China also interfered with Philippine fishermen’s traditional fishing rights near
Scarborough Shoal (without prejudice to the question of sovereignty over Scarborough
Shoal). China’s construction of artificial islands at seven features in the Spratly Islands,
as well as illegal fishing and harvesting by Chinese nationals, violate UNCLOS
obligations to protect the marine environment. Finally, Chinese law enforcement vessels
unlawfully created a serious risk of collision by physically obstructing Philippine vessels
at Scarborough Shoal in 2012.

Reasoning: This set of holdings depended on the Tribunal finding that certain areas are
within the Philippines’ EEZ and not subject to possible overlapping Chinese
entitlements. It also depended on finding that activities such as island construction
are, in accordance with China’s own public statements, not “military activities” and
therefore not excluded from jurisdiction under UNCLOS. Once this was established, the
Tribunal considered Chinese activities in the relevant areas and found that China had
(a) interfered with Philippine petroleum exploration at Reed Bank, (b) purported to
prohibit fishing by Philippine vessels within the Philippine EEZ, (c) protected and failed
to prevent Chinese fishermen from fishing within the Philippine EEZ at Mischief Reef
and Second Thomas Shoal, and (d) constructed artificial islands/installations at
Mischief Reef without the Philippines’ authorization. As for Scarborough Shoal,
regardless of who has sovereignty, both Philippine and Chinese fishermen have
“traditional fishing rights” at the Shoal that were not extinguished by UNCLOS, and
China violated the Philippines’ rights by entirely preventing Filipino fishermen from
fishing near Scarborough Shoal after May 2012. In addition, Chinese artificial island
construction has caused “severe harm to the coral reef environment” and China has
failed to stop its nationals from engaging in “harmful” and “destructive” harvesting and
fishing of endangered sea turtles, coral, and giant clams in violation of UNCLOS.
Finally, Chinese law enforcement vessels violated maritime safety obligations by
creating a serious risk of collision on two occasions in April and May 2012 during the
Scarborough Shoal standoff.

4. The Philippines sought a declaration that China’s recent actions, specifically its land
reclamation and construction of artificial islands in the Spratly Islands after the
arbitration was commenced, violated the obligations UNCLOS places on states to refrain
from conduct that “aggravates and extends” a dispute while dispute resolution
proceedings are pending. (See Table: Claim 14)

Holding: China has aggravated and extended the disputes through its dredging,
artificial island-building, and construction activities.

Reasoning: While these proceedings were pending, China has built a large island on
Mischief Reed, an LTE within the Philippines’ EEZ; caused irreparable harm to the
marine ecosystem; and permanently destroyed evidence of the natural condition of the
features at issue.

Table of Philippine Claims and Tribunal Rulings*

Submission Jurisdictional
Philippines’ Claim Merits Ruling
Number Ruling
(Deferred to Yes: UNCLOS
merits stage) comprehensively alloca
China’s maritime entitlements in South China Sea
1 rights to maritime areas
may not exceed those established by UNCLOS
Jurisdiction
granted Philippines win
2 China’s “nine-dash line” claim is invalid to the (Deferred to Yes: There is no legal b
extent it exceeds the limits established by UNCLOS merits stage) for China to claim histo
rights to waters in the S
Jurisdiction China Sea (so, to the ex
granted that is what the nine-da
means, it is invalid)
 Philippines win
Yes: Scarborough Shoa
Scarborough Shoal generates no EEZ or continental Jurisdiction rock that generates no E
3
shelf granted
Philippines win
Yes: Mischief Reef, Se
Mischief Reef, Second Thomas Shoal, and Subi Reef Thomas Shoal, and Sub
Jurisdiction
4 are all LTEs that do not generate territorial seas or are LTEs
granted
EEZs, and are not subject to appropriation
Philippines win
Yes: Mischief Reef and
(Deferred to
Second Thomas Shoal a
merits stage)
Mischief Reef and Second Thomas Shoal are part of of the EEZ and contine
5
the Philippines’ EEZ and continental shelf shelf of the Philippines
Jurisdiction
granted
Philippines win
No: Both Gaven and
McKennan Reef are ab
Gaven Reef and McKennan Reef (including Hughes water at high tide; they
Reef) are LTEs that generate no maritime Jurisdiction rocks that generate terri
6
entitlements, but may be used to determine baselines granted seas but no EEZ or con
to measure territorial sea shelf

Philippines loss
Yes: Johnson Reef, Cua
Reef, and Fiery Cross R
Johnson Reef, Cuarterton Reef, and Fiery Cross Reef Jurisdiction rocks that generate no E
7
generate no entitlements to EEZ or continental shelf granted continental shelf

Philippines win
Yes: China has interfer
(Deferred to
Philippine sovereign rig
China has interfered with the Philippines’ exercise of merits stage)
fishing and hydrocarbo
8 sovereign rights over living and non-living resources
exploration within its E
within its EEZ and continental shelf Jurisdiction
granted
Philippines win
Yes: China failed to pre
(Reserved to
Chinese fishermen from
China has failed to prevent its nationals and vessels merits stage)
fishing within the Philip
9 from exploiting the living resources in the
EEZ
Philippines’ EEZ Jurisdiction
granted
Philippines win
10 China has prevented Philippine fishermen from Jurisdiction Yes: China violated the
pursuing their livelihoods through traditional fishing granted Philippines’ “traditiona
 fishing rights” at Scarb
Shoal
activities around Scarborough Shoal
Philippines win
Yes: China engaged in
environmentally harmfu
China has violated UNCLOS’s environmental fishing/harvesting pract
Jurisdiction
11 protection obligations at Scarborough Shoal and Scarborough Shoal and
granted
Second Thomas Shoal Second Thomas Shoal

Philippines win
Yes: Environmental pro
provisions were violate
Mischief Reef; artificia
construction violated
(Deferred to
China’s occupation and construction on Mischief Philippine sovereign rig
merits stage)
Reef violate UNCLOS provisions on artificial within its EEZ; the
12
islands and environmental protection, and are “appropriation” claim i
Jurisdiction
unlawful acts of attempted appropriation because Mischief Reef
granted
LTE not capable of
appropriation

Philippines win
Yes: China violated UN
China has violated UNCLOS by dangerously and other treaty provisi
Jurisdiction
13 operating law enforcement vessels creating serious maritime safety
granted
risk of collision near Scarborough Shoal
Philippines win
Yes: Although there is
jurisdiction over disput
involving military activ
China has unlawfully aggravated and extended the (Deferred to such as the Second Tho
dispute by interfering with the Philippines’ rights of merits stage) Shoal standoff, China h
navigation near Scarborough Shoal, preventing the aggravated/extended th
14
rotation and resupply of Philippine personnel Jurisdiction disputes through recent
stationed at Second Thomas Shoal, and endangering granted in part, scale land reclamation a
the health of the personnel there denied in part artificial island constru
the Philippine EEZ

Philippines win
(Deferred to Qualified yes: This clai
Going forward China shall respect the rights and merits stage) simply asks China to do
15 freedoms of the Philippines under UNCLOS and it is required to do unde
comply with its duties under UNCLOS Jurisdiction UNCLOS; therefore, no
granted further statement is nec
* See p. 34-35 of Tribunal’s Award on Jurisdiction and Admissibility; p. 5 of the PCA’s
12 July 2016 Press Release; and p. 4 of this paper by Paul Gewirtz.

Initial Takeaways

1. Not many people predicted that the Philippines would all but run the table in this
case. It’s hard to imagine a much more favorable outcome for their legal team.

2. One of the ironies of the Award is that China has vociferously argued in public
statements that it is not “militarizing” the South China Sea and that its actions there are
for civilian purposes. Those claims turned out to be crucial to the Tribunal’s conclusion
that it had jurisdiction to consider the legality of certain Chinese actions such as
construction of artificial islands in the South China Sea, because Article 298(1)(b) of
UNCLOS excludes disputes concerning “military activities” from compulsory dispute
settlement. Despite China’s non-participation in the proceedings, the Tribunal went out
of its way to review the December 2014 position paper issued by China’s Ministry of
Foreign Affairs as well as numerous public statements of Chinese leaders. This was an
example of where those public statements worked against China’s legal interests in the
arbitration.

3. The Tribunal rejected the possibility that China could claim the entirety of the Spratly
Islands as a single archipelagic feature, as suggested in recent statements by the
Ministry of Foreign Affairs as well as a white paper issued last month by the Chinese
Society of International Law. As Julian noted earlier, this was a bit of a preemptory legal
strike against “any Chinese attempt to draw ‘straight baselines’ around the Spratlys and
thus treat the whole area as a single entity for generating maritime rights.”

4. Of all the rulings on the status of features in the Spratly Islands, perhaps none will
generate more discussion than the conclusion that Itu Aba (Taiping Island) is a rock and
not an island. Many observers thought that Itu Aba, the largest naturally occurring land
feature in the Spratly Islands, had the strongest claim to being deemed an island entitled
to both a territorial sea and an EEZ. The concepts the Tribunal employed to determine
what makes something a “rock[] which cannot sustain human habitation or economic
life of [its] own” are likely to guide future legal determinations of this character.

It will take time to digest this portion of the opinion, but the Tribunal’s “habitability and
economic life” factors seem to include:

 The objective capacity of the feature in its natural condition (i.e., “without
external additions or modifications” and without outside support), to sustain,
over an extended period of time, either

o (a) a stable community of people for whom the feature constitutes a home
and on which they can remain, or
o (b) economic activity that is not
 (i) dependent on outside resources, or
  (ii) purely extractive in nature without the involvement of a local
population.
 Factors contributing to the natural capacity of a feature to do so “include the
presence of water, food, and shelter in sufficient quantities to enable a group of
persons to live on the feature for an indeterminate period of time.”
 In assessing these “capacity” factors, the Tribunal stated, “the most reliable
evidence of the capacity of a feature will usually be the historical use to which it
has been put.” Applying that standard here, the Tribunal saw “no indication that
anything fairly resembling a stable human community has ever formed on the
Spratly Islands. Rather, the islands have been a temporary refuge and base of
operations for fishermen and a transient residence for labourers engaged in
mining and fishing.”

5. Given its sweeping conclusions favoring the Philippines, the Award may seem to have
nothing positive in it for China. But the Tribunal offered an important qualification to
its judgment, and perhaps a bit of an olive branch toward the end of a decision it knew
would not be well received in Beijing. We should not assume, said the Tribunal, that
these disputes are the product of bad faith on the part of the PRC; rather, they are the
result of basic disagreements about respective rights and obligations and the
applicability of UNCLOS. From paragraph 1198 of the Award:

“The root of the disputes presented by the Philippines in this arbitration lies not in any
intention on the part of China or the Philippines to infringe on the legal rights of the
other, but rather—as has been apparent throughout these proceedings—in
fundamentally different understandings of their respective rights under the Convention
in the waters of the South China Sea. In such circumstances, the purpose of dispute
resolution proceedings is to clarify the Parties’ respective rights and obligations and
thereby to facilitate their future relations in accordance with the general obligations of
good faith that both governments unequivocally recognise.”

6. Where does this leave us? China’s position all along with respect to these proceedings
can be summed up as “no acceptance, no participation, no recognition, and no
implementation.” The PRC Ministry of Foreign Affairs predictably wasted no time
releasing a statement declaring that “the award is null and void and has no binding
force.” The Philippine Foreign Affairs Secretary welcomed the decision, stating: “The
Philippines strongly affirms its respect for this milestone decision as an important
contribution to ongoing efforts in addressing disputes in the South China Sea.” No
surprises here, especially given that the Tribunal resolved virtually all the key issues in
favor of the Philippines. For its part, the U.S. State Department issued a
measured statement remarking that “[t]he decision today by the Tribunal in the
Philippines-China arbitration is an important contribution to the shared goal of a
peaceful resolution to disputes in the South China Sea.”

As these statements suggest, the issuance of this Award by no means puts to rest the
disputes or the tensions in the South China Sea. The arbitration was never going to
resolve issues of sovereignty over the islands and rocks in the South China Sea, because
disputes over territorial sovereignty are beyond the jurisdiction of an UNCLOS Tribunal.
And since the Tribunal has no power to enforce its nominally binding decision,
questions now turn to what any form of “implementation” might look like and the effect
this ruling will have on future negotiations over territorial sovereignty.

China, the Philippines, ASEAN countries, and the United States face a range of strategic
questions about the best way forward. Will Beijing demonstrate its disregard for the
decision by engaging in land reclamation at Scarborough Shoal or declaring an Air
Defense Identification Zone in the South China Sea, as some have predicted? Will it
continue to insist on conditioning any future bilateral negotiations with the
administration of new Philippine President Rodrigo Duterte on his government’s
rejection of the Tribunal’s Award? Will it worry that some of these behaviors will push
the Philippines and other ASEAN nations closer to the United States? Will we see the
U.S. Navy conducting “pure” freedom of navigation operations (FONOPs) within 12
nautical miles of the Spratly Island features the Tribunal says are not entitled to a
territorial sea?

There is much to digest here and much more left to shake out. National governments
will be under pressure to respond quickly, but let’s hope they first take the time to
carefully read the Tribunal’s mammoth 501-page decision.