THE SPRATLY ISLANDS DISPUTE: DECISION UNITS AND
DOMESTIC POLITICS
CHRISTOPHER CHUNG
A thesis submitted to the University of New South Wales
in fulfillment of the requirements for the degree of
Doctor of Philosophy
2004 DECLARATION
I hereby declare that this submission is my own work and that, to the best of my knowledge, it contains no material previously published or written by another person, nor material which to a substantial extent has been accepted for the award of any other degree or diploma at UNSW or any other educational institution, except where due acknowledgement is made in the thesis. Any contribution made to the research by colleagues, with whom I have worked at UNSW or elsewhere, during my candidature, is fully acknowledged.
I also declare that the intellectual content of this thesis is the product of my own work, except to the extent that assistance from others in the project’s design and conception or in style, presentation and linguistic expression is acknowledged.
Christopher Chung
i ABSTRACT
This thesis presents a cross-national, cross-regime examination of foreign policy decision-making in the Spratly Islands dispute, focusing on China, Malaysia and the Philippines. It argues that how and why these countries have acted in particular ways towards the dispute relates to the relationship among foreign policy decision-making, government behaviour and domestic politics.
The theoretical foundation of the study is foreign policy analysis. It applies the decision units approach advanced by Margaret and Charles Hermann and Joe Hagan to investigate who made foreign policy decisions on the Spratly Islands dispute in the three countries during the period 1991-2002, and how this influenced government behaviour. In addition, the contextual influence of domestic politics is considered. Four case studies inform the empirical analysis: the approaches taken by Malaysia and the Philippines to bolster their respective sovereignty claim, China’s establishment of a comprehensive maritime jurisdictional regime covering the Spratly Islands among other areas, China- Philippines contestation over Mischief Reef and the development of a regional instrument to regulate conduct in the South China Sea.
Three conclusions are drawn. First, the decision units approach identifies the pivotal foreign policy decision-makers in each of the countries examined and the process involved. Second, it explains the relationship between decision unit characteristics -- self-contained or externally influenceable -- and each government’s behaviour towards the dispute. Injecting domestic politics into the analysis highlights motivations of and constraints faced by decision-makers, conditioning the form and content of government action. Third, it demonstrates a low predictive capability: the ‘fit’ between hypothesised and actual government behaviour is poor. While it is not a comprehensive analytical tool, the combined decision units-domestic politics approach offers deeper insight into government decisions and behaviour on the Spratly Islands dispute than hitherto reported in the literature.
ii ACKNOWLEDGEMENTS
For guiding my intellectual and personal journey in preparing the thesis, I thank the following. To my supervisor, Associate Professor Anthony Bergin, School of Politics, University of New South Wales at the Australian Defence Force Academy, my deep gratitude for his clear guidance, enthusiasm about the research and generous friendship. Dr. John Walker, my co-supervisor in the School of Politics, provided helpful comments in reviewing the draft thesis. From the earliest stage of the project, Professor James Cotton, also of the School of Politics, provided encouragement and friendship, for which I remain very grateful.
In undertaking the fieldwork many people contributed generously of their time, expertise and networks. In China, I thank Professor Gao Zhiguo, Executive Director, China Institute for Marine Affairs, State Oceanic Administration and Professor Chu Shulong, School of Public Policy and Management, Tsinghua University. In Malaysia, I am indebted to Dr. B.A. Hamzah, Maritime Consultant and former Director-General, Maritime Institute of Malaysia; Dato Mohamed Jawhar bin Hassan, Director-General, Institute of Strategic and International Studies; Mr. Max Herriman, Chief Executive Officer, Sea Resources Management SDN BHD; Mr. Mak Joon-Num, Director of Research, Maritime Institute of Malaysia; Associate Professor Hari Singh, Strategic and Security Studies Unit, National University of Malaysia; and Ms. Susan Teoh, Director, Information Services Division, Institute of Strategic and International Studies. In the Philippines, I thank Ms. Sandra Arcamo, Chief, Fisheries Resource Management Division, Bureau of Fisheries and Aquatic Resources; Mr. Jay Batongbacal, Director, Philippines Centre for Marine Affairs; Associate Professor Aileen Baviera, Asian Centre, University of the Philippines; Professor Benito Lim, Asian Centre, University of the Philippines; Mr. Francisco Meir, Assistant Director-General (Policy and Strategy), National Security Council; Mrs. Teresita Navata, Philippines Centre for Marine Affairs; Ms. Emma Sarne, Director, Department of Foreign Affairs; and Ms. Princess Tomas- Tayao, Head, Security and Strategic Studies Section, Foreign Service Institute, Department of Foreign Affairs.
iii The School of Politics, University of New South Wales at the Australian Defence Force Academy was a very congenial research home. For this, I thank Dr. Graeme Cheeseman, Associate Professor David Lovell, Ms. Shirley Ramsay and Associate Professor Hugh Smith. Particular thanks are given to Dr. Jian Zhang for critically reviewing drafts of chapters 1 and 2, the many stimulating discussions of China’s foreign and defence policies and warm friendship. I also acknowledge with much appreciation the tireless efforts of Ms. Mary-Jane Burk, Mr. Christopher Dawkins, Mrs. Edith Hackworthy, Ms. Vicky Hudson and Ms. Anna Papoulis of the university library in sourcing many of the works cited. Mrs. Sevilay Esat provided timely advice regarding bibliographic formatting in Endnote. I am grateful to the University of New South Wales for awarding me a University College Postgraduate Research Scholarship.
To Professor Bob Kirk of the Department of Geography, University of Canterbury, Christchurch, New Zealand my sincerest thanks for his inspirational teaching that sparked my interest in marine policy, for the unstinting encouragement to extend myself intellectually and the constant friendship.
For showing me the stars in the night sky and inspiring me to dream of reaching beyond them, I thank my parents. Finally, I dedicate the thesis to my wife, Rosemary, and daughter, Laura. Their love, encouragement and understanding made it possible.
iv TABLE OF CONTENTS
DECLARATION …………………………………………………………………..i
ABSTRACT ………………………………………………………………………..ii
ACKNOWLEDGEMENTS ………………………………………………………..iii
LIST OF FIGURES ………………………………………………………………..ix
LIST OF TABLES …………………………………………………………………x
ABBREVIATIONS AND ACRONYMS ………………………………………….xi
1.0 INTRODUCTION …………………………………………………………1
1.1 Literature Overview ………………………………………………………..2 International Relations: General Analyses ……………………...... 3 International Relations: Realist Focus ……………………………………. 4 International Relations: Intra-state Focus ………………………………... 6 International Law …………………………………………………………. 8 Marine Political Geography ……………………………………………….10 Marine Resource Management …………………………………………….11 Security and Strategy ………………………………………………………12 Dialogue and Confidence-building ………………………………………...15 Regime Development ………………………………………………………17 1.2 Analytical Niche and Contribution of the Thesis ………………………….17 1.3 Methodology ……………………………………………………………….19 1.4 Structure of the Thesis ……………………………………………………..24
2.0 FOREIGN POLICY ANALYSIS, DECISION UNITS AND DOMESTIC POLITICS …………………………………………………..27
2.1 Foreign Policy Analysis ……………………………………………………27 2.2 Analysing Foreign Policy Decision-making ……………………………….32 Snyder, Bruck and Sapin’s Decision-making Framework …………………33 Rosenau’s Pre-theory of Foreign Policy …………………………………...34 Allison’s Models of Decision-making ……………………………………... 36 2.3 Limitations of the Approaches ……………………………………………..40 2.4 The Decision Units Approach …………………………………………….. 44 Predominant Leader ………………………………………………………. 46 Single Group ………………………………………………………………. 53 Multiple Autonomous Actors ……………………………………………….58
v 2.5 Identifying the Decision Unit ………………………………………………60 2.6 The Decision Unit and Foreign Policy Behaviour ………………………….62 2.7 Bringing In Domestic Politics ……………………………………………...65 2.8 Summary ……………………………………………………………………72
3.0 THE SPRATLY ISLANDS DISPUTE: AN OVERVIEW …………………. 74
3.1 The Spratly Islands …………………………………………………………74 Geography ………………………………………………………………….74 Natural Resources ………………………………………………………….80 Strategic Significance ……………………………………………………... 89 3.2 Sovereignty Claims ………………………………………………………...94 Brunei ………………………………………………………………………94 China ……………………………………………………………………….97 Malaysia ……………………………………………………………………104 Philippines ………………………………………………………………….107 Taiwan ……………………………………………………………………...110 Vietnam ……………………………………………………………………. 111
4.0 BOLSTERING SOVEREIGNTY CLAIMS: THE APPROACHES OF MALAYSIA AND THE PHILIPPINES ……………………………… 115
4.1 Acquisition of Territory under International Law ………………………… 117 4.2 Making Waves: Malaysia Moves on Investigator Shoal and Erica Reef …..120 4.3 Reaching Out: The Philippines and Internationalisation of the Spratly Islands Dispute ……………………………………………………………..141 4.4 Identifying the Decision Unit ………………………………………………151 Malaysia ……………………………………………………………………151 Philippines ………………………………………………………………… 157 4.5 The Decision Unit and Foreign Policy Behaviour …………………………161 Malaysia ……………………………………………………………………161 Philippines ………………………………………………………………… 166 4.6 Domestic Politics as a Contextual Influence ……………………………… 173 Malaysia ……………………………………………………………………173 Philippines ………………………………………………………………… 177 4.7 Summary …………………………………………………………………...179
vi 5.0 CHINA’S MARITIME JURISDICTIONAL REGIME AND THE SPRATLY ISLANDS ……………………………………………….. 182
5.1 China’s Maritime Jurisdictional Regime ………………………………….. 185 Baselines …………………………………………………………………... 186 Territorial Sea and Contiguous Zone ………………………………………189 Exclusive Economic Zone (EEZ) and Continental Shelf …………………...193 5.2 Chinese Conceptions of Law ……………………………………………… 198 5.3 Identifying the Decision Unit ………………………………………………207 5.4 The Decision Unit and Foreign Policy Behaviour …………………………217 5.5 Domestic Politics as a Contextual Influence ……………………………… 225 5.6 Summary ……………………………………………………………………236
6.0 CHINA-PHILIPPINES CONTESTATION OVER MISCHIEF REEF …... 240
6.1 A Survey of the Mischief Reef Dispute, 1995-2002 ……………………….241 6.2 Identifying the Decision Unit ………………………………………………264 China ……………………………………………………………………….264 Philippines ………………………………………………………………… 279 6.3 The Decision Unit and Foreign Policy Behaviour …………………………289 China ……………………………………………………………………….289 Philippines ………………………………………………………………… 293 6.4 Domestic Politics as a Contextual Influence ……………………………… 296 China ……………………………………………………………………….296 Philippines ………………………………………………………………… 302 6.5 Summary …………………………………………………………………...305
7.0 REGULATING CONDUCT IN THE SOUTH CHINA SEA ……………..309
7.1 Why the Need for a Regional Instrument to Regulate Conduct in the South China Sea? ……………………………………………………….310 7.2 Phase I: Unilateral Drafts of a Code of Conduct in the South China Sea, 1991-1999 …………………………………………………………………. 313 7.3 Phase II: Negotiating a Consolidated Draft Code of Conduct, 2000-2001 ………………………...... 332 7.4 Phase III: Declaration on the Conduct of Parties in the South China Sea, 2002 ………………………………………………………………………...338 7.5 The Decision Unit, Foreign Policy Behaviour and Domestic Politics ……..348 China ……………………………………………………………………….349 Malaysia ……………………………………………………………………363 Philippines ………………………………………………………………… 374 7.6 Summary ……………………………………………………………………379
vii 8.0 CONCLUSION …………………………………………………………….383
8.1 Decision Units ……………………………………………………………...384 8.2 Decision Units and Foreign Policy Behaviour ……………………………..387 Self-contained Decision Units ……………………………………………...394 Externally Influenceable Decision Units …………………………………...397 8.3 Domestic Politics as a Contextual Influence ……………………………… 400 8.4 Areas for Future Research ………………………………………………… 403
APPENDIX I: Interview Questions ……………………………………………... 409 APPENDIX II: List of Persons Interviewed ……………………………………... 410 APPENDIX III: China’s Draft Code of Conduct in the South China Sea, October 1999 ……………………………………………………. 412 APPENDIX IV: ASEAN’s Draft Code of Conduct in the South China Sea, November 1999 …………………………………………………. 415 APPENDIX V: Declaration on the Conduct of Parties in the South China Sea, November 2002 …………………………………………………..418
BIBLIOGRAPHY ………………………………………………………………….423
viii LIST OF FIGURES
1. Identifying the Decision Unit for a Foreign Policy Issue …. ………………..61
2. The South China Sea Islands …………………………………………………75
3. The Spratly Islands Maritime Area …………………………………………..77
4. Occupied Features in the Spratly Islands …………………………………….79
5. The Strategic Chokepoints of the Malacca, Sunda and Lombok Straits ……..92
6. Brunei’s Maritime Claim in the South China Sea ……………………………95
7. China’s 1947 U-shaped Boundary Line Map ………………………………..101
8. Malaysia’s Maritime Claims in the Southern Part of the Spratlys …………..106
9. The Philippines’ Kalayaan Claim and its Overlap with Malaysia’s Claimed Continental Shelf Boundary …………………………………...... 108
10. Maritime Zones …………………………………………………………...... 183
11. China’s First and Second Island Chain Strategy ……………………………..230
ix LIST OF TABLES
1. Categorising Self-Contained and Externally Influenceable Decision Units ………………………………………………………………………….64
2. Selected Fisheries Statistics ………………………………………………….87
3. Case Study Decision Units……………………………………………………385
4. Relationship between Hypothesised and Actual Government Behaviour …... 388
x ABBREVIATIONS AND ACRONYMS
A$ Australian dollars AEC ASEAN Economic Community AFP Armed Forces of the Philippines AMM ASEAN Ministerial Meeting APEC Asia Pacific Economic Co-operation forum ARF ASEAN Regional Forum ASEAN Association of Southeast Asian Nations ASEAN-China PMC ASEAN-China Post-Ministerial Consultation ASEAN-China SOM ASEAN-China Senior Officials Meeting ASEAN SOM ASEAN Senior Officials Meeting ASEM Asia-Europe Meeting ASC ASEAN Security Community ASCC ASEAN Socio-cultural Community BKN Bahagian Keselamatan Negara (National Security Division, Prime Minister’s Department, Malaysia) BN Barisan Nasional CCP Chinese Communist Party CCMOA Cabinet Committee on Maritime and Ocean Affairs, Philippines CICIR China Institute of Contemporary International Relations CMC Central Military Commission CNOOC China National Offshore Oil Corporation CNPC China National Petroleum Corporation COSCO China Ocean Shipping (Group) Company COSCON China Ocean Shipping (Group) Company Container Lines CPCC Chinese People’s Consultative Conference CSCAP Council for Security Co-operation in the Asia Pacific DFA Department of Foreign Affairs, Philippines DND Department of National Defence, Philippines EEZ Exclusive Economic Zone GDP Gross domestic product GPS Global positioning system FALSG Foreign Affairs Leading Small Group FAO Food and Agriculture Organisation, United Nations FPA Foreign policy analysis ICJ International Court of Justice ITLOS International Tribunal on the Law of the Sea KEMENTAH Kementerian Pertahanan (Ministry of Defence, Malaysia) KIG Kalayaan Island Group Km Kilometres Km2 Square kilometres Km/hr Kilometres per hour LNG Liquified natural gas
xi LOSC United Nations Convention on the Law of the Sea, 1982 mmetres MAF Malaysian Armed Forces MDT Mutual Defense Treaty MIMA Maritime Institute of Malaysia MINDEF Ministry of Defence, Malaysia MFA Ministry of Foreign Affairs, China MLSA Mutual Logistics Support Agreement MSCB Maritime security and confidence building NATO North Atlantic Treaty Organisation NEDA National Economic and Development Authority, Philippines nm Nautical miles NPC National People’s Congress NSC National Security Council, Philippines PAS Parti Islam Se-Malaysia PLA People’s Liberation Army PLAN People’s Liberation Army Navy PPPM Pusat Penyelarasan Penguatkuasaan Maritim (Maritime Security Policy Group, National Security Division, Prime Minister’s Department, Malaysia) PRC People’s Republic of China RP Republic of the Philippines SEANWFZ Southeast Asia Nuclear Weapon-Free Zone SETC State Economic and Trade Commission SOA State Oceanic Administration SLOC Sealines of communication TAC Treaty of Amity and Cooperation in Southeast Asia TWG-LM Technical Working Group on Legal Matters in the South China Sea UMNO United Malays National Organisation UN United Nations UNEP United Nations Environment Programme US United States of America US$ United States dollars VFA Visiting Forces Agreement ZOPFAN Zone of Peace, Freedom and Neutrality
xii 1.0 INTRODUCTION
“In foreign affairs there are no small matters; in all matters one must request instructions” (waishi wu xiaoshi, shishi yao qingshi).
Attributed to Zhou Enlai1
The dispute in the Spratly Islands, situated geographically in the southern part of the South China Sea, occupies a prominent place in scholarly and policy analyses of political and strategic challenges in Southeast Asia. As a potential flashpoint threatening regional peace and stability, the overlapping sovereignty and jurisdiction claims over the area have implications for not only South China Sea littoral states but also external powers such as Australia, India, Japan and the United States (US). Six governments have claims over all or part of the Spratly Islands area: Brunei, China,2 Malaysia, the Philippines, Taiwan and Vietnam. All except Brunei occupy claimed features.
Physically, the myriad reefs, cays, islets, shoals and other features present are very small: Itu Aba, the largest island, is only 1.4 kilometres (km) long and 400 metres (m) wide.3 Of much greater importance is the area’s strategic location, its marine resources and the possibility of claiming sovereign rights over an extended area of oceanic space using as basepoints qualifying marine features. Major sealines of communication (SLOCs) used by commercial and military vessels are present and strategic straits chokepoints rim the Sea’s margins. Control of the South China Sea region and its SLOCs would confer strategic advantage for interdiction or surveillance efforts or in a time of war. Commercial fisheries in the Spratly Islands contribute export revenue, employment and food protein to local economies. Oil and
1 Quoted in Lurong Wang and J. Bruce Jacobs, “China’s Foreign Affairs Establishment and the National People’s Congress”, Australian Journal of International Affairs 46(2), 1992, p. 268. 2 The appellations “China”, “People’s Republic of China” and “PRC” are used interchangeably in this study to refer to mainland China. The term “Taiwan” refers to the Republic of China. 3 Victor Prescott and Clive Schofield, Undelimited Maritime Boundaries of the Asian Rim in the Pacific Ocean, Maritime Briefing 3(1), International Boundaries Research Unit, University of Durham, Durham, 2001, p. 58.
1 gas production is well established in the near offshore of Sabah, Sarawak and Palawan. Speculation that large reserves of hydrocarbons might exist in the deeper offshore has been captured by the notion of an “oil-rich Spratlys”. The possibility of claiming extended maritime jurisdiction from qualifying marine features in the Spratlys means their status and location are more important than their physical size. Under the 1982 United Nations Convention on the Law of the Sea (LOSC) a party can claim a 12 nautical mile (nm) territorial sea, a contiguous zone of a further 12 nm, a 200 nm exclusive economic zone (EEZ) and a continental shelf that in certain circumstances can extend to 350 nm from the coastal baseline.
This thesis presents a cross-national, cross-regime examination of foreign policy decision-making in the Spratly Islands,4 focusing on China, Malaysia and the Philippines. It argues that how and why they have acted in particular ways towards issues in the dispute relates to the relationship among foreign policy decision- making, government behaviour and domestic politics. This emphasises an intra-state level of analysis, highlighting internal determinants behind external posture and actions. A foreign policy analysis approach, with particular reference to who makes decisions and how,5 provides the conceptual foundation for the investigation. Three questions focus the inquiry: Who made foreign policy decisions in China, Malaysia and the Philippines in the Spratly Islands dispute in the period 1991-2002? How did this decision unit influence government behaviour? What was the role of domestic politics as a contextual factor?
1.1 Literature Overview
Scholarly analyses of the South China Sea/Spratly Islands dispute abound. A striking feature is the number of works on China’s claim, actions and intent. They dominate the literature, creating an imbalance vis-à-vis material on the other
4 In referring to the features present, I use the English names rather than those given by the respective claimants. A comprehensive list of features in the Spratly Islands occupied and/or above water at low tide is found in Mark J. Valencia, Jon M. Van Dyke and Noel A. Ludwig, Sharing the Resources of the South China Sea, Martinus Nijhoff Publishers. The Hague, 1997, Appendix I. 5 This term is borrowed from Margaret G. Hermann and Charles F. Hermann, “Who Makes Foreign Policy Decisions and How: An Empirical Inquiry”, International Studies Quarterly 33(4), 1989, p. 361. Chapter 2 explains the decision units approach in detail.
2 claimants that hampers cross-national analysis. This section presents a review of the literature using a thematic structure. Its purpose is two-fold. First, to highlight the diversity of approaches used to analyse the dispute. Second, to locate the thesis within the pre-existing literature. This aids in clarifying its differentiation in section 1.2. It is emphasised that while the thesis departs from existing works in the literature it also draws upon them to enrich the analysis.
International Relations: General Analyses
A number of works on the South China Sea dispute present general analyses disassembling the issue into elements covering some or all of history, law, economics, politics, resources, environment, security, confidence-building initiatives. This approach characterises the works of Timo Kivimäki, Bob Catley and Makmur Keliat, Lu Ning and Aileen Baviera.6 Other scholars examine one issue area in depth. Marwyn Samuels marshals extensive historical information to examine China’s claim in particular, and to a lesser extent those of the other parties.7 Dieter Heinzig also concentrates on the history of the sovereignty claims in the Sea, broken into pre- and post-World War II periods, and comments on associated diplomatic activities from 1947 to 1975.8 Eric Hyer and Chi-kin Lo separately examine China’s policies and approach to the South China Sea dispute. Hyer considers how China’s approach to settling other territorial disputes informs its approach in the South China Sea, and finds evidence of similar patterns of behaviour.9 Lo focuses on the effects of China’s geopolitical interests in the 1970s and early 1980s and other environmental factors, especially economic modernisation, that might explain its behaviour in the South China Sea.10 Placing China’s interest in the Sea within its ambition of becoming a
6 Timo Kivimäki (ed.), War or Peace in the South China Sea?, Nordic Institute of Asian Studies Press, Copenhagen, 2002; Bob Catley and Makmur Keliat, Spratlys: The Dispute in the South China Sea, Ashgate Publishing Company, Aldershot and Brookfield, 1997; Lu Ning, flashpoint Spratlys!, Dolphin Trade Press Pte Ltd, Singapore, 1995; Aileen San Pablo-Baviera (ed.), The South China Sea Disputes. Philippine Perspectives, Philippine-China Development Resource Center and Philippine Association for Chinese Studies, Quezon City, 1992. 7 Marwyn Samuels, Contest for the South China Sea, Methuen, New York and London, 1982. 8 Dieter Heinzig, Disputed Islands in the South China Sea. Paracels-Spratlys-Pratas-Macclesfield Bank, Otto Harrassowitz and Institute of Asian Affairs in Hamburg, Wiesbaden, 1976. 9 Eric Hyer, “The South China Sea disputes: Implications of China’s earlier territorial settlements”, Pacific Affairs 68(1), 1995, pp. 34-54. 10 Chi-kin Lo, China’s Policy Towards Territorial Disputes. The Case of the South China Sea Islands, Routledge, London and New York, 1989.
3 great power, Andrew Scobell suggests it is unwilling to compromise on the sovereignty issue.11 “In short, China wants to expand its influence in maritime Southeast Asia” he asserts, utilising an approach of slow intensity conflict.12
Whether presenting the multiple facets of the disputes within a broad context or focusing on just one aspect in detail, these studies have a high descriptive utility. At the same time, however, none looks behind the justifications made by the parties for their claims and their actions to bolster them. A common missing element is consideration of why and how government decision-making, behaviour and domestic politics influenced particular courses of action towards the dispute, and factors that encouraged or constrained a co-operative or conflictual posture to be adopted.
International Relations: Realist Focus
In attempting to explain the behaviour of the parties to the dispute, a number of studies (and several fictional works that use it as their setting) invoke the Realist paradigm.13 Michael Leifer suggests that China’s security policy in the South China Sea relates to a desire to consolidate its national domain.14 The Spratlys “form the most important part of China’s terra irredenta in the South China Sea.”15 While Michael Gallagher argues that economic interdependence (and domestic politics) will constrain China’s behaviour in the South China Sea,16 Leifer is sanguine about this, citing the pull of regaining perceived lost territory and a strengthening of its military capabilities.17 More generally, three interlocking themes emerge from Realist
11 Andrew Scobell, “China’s strategy toward the South China Sea” in Martin Edmonds and Michael M. Tsai (eds), Taiwan’s Maritime Strategy, RoutledgeCurzon, London and New York, 2003, p. 42. 12 Ibid., pp. 42-46. 13 See for example Shigeo Hiramatsu, “China’s Advances in the South China Sea: Strategies and Objectives”, Asia-Pacific Review 8(1), 2001, pp. 40-50; Ji Guoxing, “China versus South China Sea Security”, Security Dialogue 29(1), 1998, pp. 101-12; Jun Zhan, “China Goes to the Blue Waters: The Navy, Seapower Mentality and the South China Sea”, The Journal of Strategic Studies 17(3), 1994, pp. 180-208. Fictional works include Humphrey Hawksley and Simon Holberton, Dragon Strike: The Millennium War, Sidgwick and Jackson, London, 1997; and Tom Clancy, SSN: Strategies of Submarine Warfare, HarperCollins, London, 1996. 14 Michael Leifer, “Chinese Economic Reform and Security Policy: The South China Sea Connection”, Survival 37(2), 1995, p. 57. 15 Ibid., p. 46. 16 Michael G. Gallagher, “China’s Illusory Threat to the South China Sea” International Security 19(1), 1994, pp. 185-87. 17 Leifer, “Chinese Economic Reform and Security Policy”, p. 58.
4 ‘explanations’ of the behaviour of the South China Sea/Spratly claimants: the desire to develop actual or potential marine resources, especially hydrocarbons;18 national defence and security, broadly defined;19 and in the case of China, irredentism and nationalism. Some intertwining with a broader debate about the implications of a so- called “China threat” related to the country’s emergence as a potential military and economic superpower in the twenty first century is also apparent.20
Realist ‘explanations’ of claimants’ behaviour towards the South China Sea dispute fail to address adequately several puzzles. How should national interest, a key tenet of the Realist paradigm, be defined in this case given that the disputes do not threaten the survival of any of the claimants? Realism implies a zero-sum game rather than compromise outcomes. China claims indisputable sovereignty over the Paracel and Spratly Islands and their adjacent waters21 yet it participated in multilateral negotiations on a regional code of conduct that implicitly recognises the claims of others. Why is China willing to court adverse regional reaction through incremental occupation of features and inclusion of controversial provisions in its maritime jurisdictional regime when she has consistently stressed the importance of peace, stability and good neighbourly relations to underpin her continued economic
18 For example, Mamdouh G. Salameh, “China, Oil and the Risk of Regional Conflict”, Survival 37(4), 1995-1996, pp. 133-146; Alice D. Ba, “China, Oil, and South China Sea: Prospects for Joint Development”, American Asian Review 12(4), 1994, pp. 121-67. 19 You Ji, “The Chinese Navy and National Interest” in Jack McCaffrie and Alan Hinge (eds), Sea Power in the New Century. Maritime Operations in Asia-Pacific Beyond 2000, Australian Defence Studies Centre, Canberra, 1998, p. 25; You Ji, “The PLA Navy in the Changing World Order: The South China Sea Theatre” in Dick Sherwood (ed.), Maritime Power in the China Seas. Capabilities and Rationale, Australian Defence Studies Centre, Canberra, 1994, pp. 85-109. 20 See for example, Aileen San Pablo Baviera, “Perceptions of a China Threat: A Philippine Perspective” in Herbert Yee and Ian Storey (eds), The China Threat: Perceptions, Myths and Reality, RoutledgeCurzon, London and New York, 2002, pp. 248-264; and Abdul Razak Baginda, “Malaysian Perceptions of China: From Hostility to Cordiality” in Herbert Yee and Ian Storey (eds), The China Threat: Perceptions, Myths and Reality, RoutledgeCurzon, London and New York, 2002, pp. 227- 247. Other works examining the “China-threat” include Richard Bernstein and Ross H. Munro, “China I: The Coming Conflict with America”, Foreign Affairs 76(2), 1997, pp. 18-32; Robert Ross, “China II: Beijing as a Conservative Power”, Foreign Affairs 76(2), 1997, pp. 33-44; Denny Roy, “The “China Threat” Issue: Major Arguments”, Asian Survey XXXVI(8), 1996, pp. 758-771; Gerald Segal, “East Asia and the Constrainment of China?”, International Security 20(4), 1996, pp. 180-209; Denny Roy, “Hegemon on the Horizon? China’s Threat to East Asian Security”, International Security 19(1), 1994, pp. 149-68; Denny Roy, “Consequences of China’s Economic Growth for Asia- Pacific Security”, Security Dialogue 24(2), 1993, pp. 181-91. 21 See for example, Ministry of Foreign Affairs of the People’s Republic of China, “The Issue of South China Sea”, <
5 modernisation? Why did Malaysia shift from follower to leader of a regional instrument to regulate conduct in the South China Sea? How consonant is the effort by the Philippines to internationalise the dispute with Realism’s fundamental notions of power politics and self-help to protect national interests?
International Relations: Intra-state focus
Several studies have looked within the ‘black box’ of the state to present finer-grained analyses of the dispute. They can be grouped under two headings. First, those examining the role of bureaucratic politics. This reflects the ‘push and pull’ of competing agencies and individuals in protecting or extending the ‘national’ interest in the process of shaping policy on the South China Sea. John Garver asserts, for example, that China’s push into the South China Sea reflects a convergence between the bureaucratic interests of the People’s Liberation Army Navy (PLAN) and the country’s national interests as defined by Deng Xiaoping.22 In his view, the PLAN’s desire to modernise its capabilities remained constant but the basis of its argument for the necessary funding changed.23 In particular, the justification used by the PLAN shifted from a geostrategic argument to one that emphasised the importance of exploiting and defending the country’s maritime resources for long-term economic development.24 Garver suggests that the idea of Lebensraum has influenced China’s South China Sea policy since the late 1970s.25 From the perspective of China’s leaders, control of the South China Sea is in the national interest because it will strengthen prospects for long-term prosperity through resource development and help the country achieve a position of global power.26 Irredentism is a further factor.27 The PLAN has skilfully argued its case drawing on these sensitivities, benefiting from support by conservative and nationalist politicians.28
22 John W. Garver, “China’s push through the South China Sea: The interaction of bureaucratic and national interests”, The China Quarterly 132, 1992, p. 1000. 23 Ibid., p. 1000 and p. 1020. 24 Ibid., pp. 999-1000, pp. 1018- 19 and p. 1022. 25 Ibid., p. 1018. 26 Ibid., p. 1020. 27 Ibid. 28 Ibid., p. 1026.
6 Michael Leifer also asserts that the PLAN has creatively linked China’s economic reform process and its national security policy. 29 Economic growth has provided the funding for military modernisation, allowing a more assertive stance in the South China Sea. At the same time, the desire to sustain economic development has acted as a brake on overly assertive behaviour there.30 The projected benefit from the investment of national budgetary resources is the discovery and development of oil and natural gas, which would contribute to the country’s further economic growth.31
Knut Snildal presents an analysis of the national interest-bureaucratic politics nexus with reference to decision-making on China’s petroleum interests in the South China Sea.32 In his view the PLAN and the China National Offshore Oil Corporation (CNOOC) appeal to the national interest in the South China Sea to justify their calls for greater financial and political support vis-à-vis competing agencies.33 He argues that one outcome of the interaction between these actors and the central leadership is a policy towards the South China Sea that is simultaneously expansionist and status quo focused.34 In the short-term, Snidal suggests, China prefers the present stalemate because this enables it to concentrate on other foreign and domestic policy issues but in the longer term it seeks to dominate and secure to itself the entire South China Sea. 35 He asserts that bureaucratic rivalry between the PLAN and China’s state oil companies (CNOOC, and the China National Petroleum Corporation (CNPC)) on the one hand and the Ministry of Foreign Affairs (MFA) on the other results in a fragmented national policy on the South China Sea.36 This ignores, however, the possibility and implications of consensus among these actors about ends but divergence on means. Jun Zhan raises this possibility concerning China’s 1992 law on the territorial sea by suggesting that inter-agency differences between the PLAN and the MFA may have related to detail rather than goals.37
29 Leifer, “Chinese Economic Reform and Security Policy”, pp. 44-59. 30 Ibid., p. 45. 31 Ibid., p. 44 and p. 50. 32 Knut Snildal, Petroleum in the South China Sea – A Chinese National Interest?, Unpublished Candidata rerum politicarum (Masters) thesis, University of Oslo, Oslo, 2000. 33 Ibid., p. 2 and p. 113. 34 Ibid. 35 Ibid., p. 11. 36 Ibid., p. 13. 37 Zhan, “China Goes to the Blue Waters”, p. 195.
7 A second group of studies focus on the relationship between nationalism and foreign policy behaviour, focusing on China. Several scholars have identified nationalism as a motivating factor behind her actions in the Spratlys, without examining the issue in detail.38 An exception is Leni Stenseth.39
In exploring the mechanisms through which nationalism40 influences China’s policy on the Spratlys, Stenseth focuses on the structure and content of discourse on the South China Sea/Spratlys dispute presented in selected Chinese newspapers and research journals between 1988 and 1997. In her view, the newspaper articles are representative of the ‘lens’ through which the regime presents its official position on the dispute to the public, while the journals are elite communications.41 This reflects the latter’s restricted, specialist audience. She finds that the South China Sea discourse in China focuses on four topics. In rank order, the actions of other claimants received most comment followed by security then the historical basis of China’s claim and finally, resources.42 Stenseth did not find evidence that an aggressive form of nationalism towards the dispute dominated domestic discourse.
International Law
Research on the legal status and ownership of the maritime features in the South China Sea/Spratly Islands has been strong, reflecting the pivotal role of these issues in any discussion of the dispute. China’s claim has been studied intensely, and a number of scholars conclude it has a stronger case. They include Hungdah Chiu
38 See for example Valencia, Van Dyke, and Ludwig, Sharing the Resources of the South China Sea, p. 85; Shee Poon Kim, “The South China Sea in China’s Strategic Thinking”, Contemporary Southeast Asia 19(4), 1998, p. 371; Chen Jie, “China’s Spratly Policy With Special Reference to the Philippines and Malaysia”, Asian Survey XXXIV(10), 1994, p. 894. 39 Leni Stenseth, Nationalism and Foreign Policy - The Case of China’s Nansha Rhetoric, Unpublished Candidata rerum politicarum (Masters) thesis, University of Oslo, Oslo, 1998, <
8 and Choon-Ho Park,43 Steven Kuan-Tsyh Yu,44 Teh-Kuang Chang,45 Jianming Shen46 and Greg Austin.47 Other commentators are unconvinced. Among them are H. Harry Roque Jr.,48 Monique Chemillier-Gendreau,49 Michael Bennett50 and Daniel Dzurek.51
A different issue under the international law theme relates to boundary delimitation under the LOSC. After reviewing each of the claims in the Paracel and Spratly Islands, Jon van Dyke and Dale Bennett examine the role of islands in boundary disputes and suggest that ownership of these two island groups should not be a predominant factor in a delimitation exercise.52 In their view “factors such as the length of adjacent coastline, size of the adjacent coastal populations, and historic uses of the marine area should play a considerably more important role determining the maritime boundaries than does possession.”53 They also suggest deferring the task of maritime boundary delimitation and concentrating on the creation of a joint development agency.54 Renate Haller-Trost presents a comprehensive analysis of
43 Hungdah Chiu and Choon-Ho Park, “Legal Status of the Paracel and Spratly Islands”, Ocean Development and International Law 3(1), 1975, p. 20. 44 Steven Kuan-Tsyh Yu, “Who Owns the Paracels and Spratlys? – An Evaluation of the Nature and Legal Basis of the Conflicting Territorial Claims”, Chinese Yearbook of International Law 9, 1989- 1990, p. 23 and p. 25. 45 Teh Kuang Chang, “China’s Claim of Sovereignty Over Spratly and Paracel Islands: A Historical and Legal Perspective”, Case Western Reserve Journal of International Law 23(3), 1991, pp. 410-13. 46 Jianming Shen, “International Law Rules and Historical Evidences Supporting China’s Title to the South China Sea Islands”, Hastings International and Comparative Law Review 21(1), 1997, pp. 72- 74. 47 Greg Austin, China’s Ocean Frontier: International Law, Military Force and National Development, Allen and Unwin, St. Leonards, 1998, p. 4 and p. 160. 48 Roque suggests China’s historical title argument is weak as its evidence of effective occupation. H. Harry L. Roque Jr., “China’s Claim to the Spratlys [sic] Islands under International Law”, Journal of Energy and Natural Resources Law 15(3), 1997, p. 209. 49 Chemillier-Gendreau dismisses China’s claim for lack of a legal basis. Monique Chemillier- Gendreau, Sovereignty over the Paracel and Spratly Islands, Kluwer Law International, The Hague, 2000, p. 139. This is the English translation of her book originally published in French as La souveraineté sur les archipels paracels et spratleys, Editions L’Harmattan, Paris, 1996. 50 Bennett concludes “the PRC does not appear to have a meritorious claim to the chain [the Spratly Islands] under international law.” Michael Bennett, “The People’s Republic of China and the Use of International Law in the Spratly Islands Dispute”, Stanford Journal of International Law 28(2), 1992, p. 449. 51 Dzurek suggests Taiwan has the stronger claim, then the People’s Republic of China followed by Vietnam. Daniel J. Dzurek, The Spratly Islands Dispute: Who's On First?, Maritime Briefing 2(1), International Boundaries Research Unit, University of Durham, Durham, 1996, pp. 54-55. 52 Jon M. Van Dyke and Dale L. Bennett, “Islands and the Delimitation of Ocean Space in the South China Sea” in Elizabeth Mann Borgese, Norton Ginsburg and Joseph R. Morgan (eds), Ocean Yearbook 10, The University of Chicago Press, Chicago and London, 1993, pp. 54-89. 53 Ibid., p. 89. 54 Ibid.
9 Malaysia’s unresolved maritime and territorial boundaries, taking as her point of origin the 1979 map showing the boundaries of its claimed continental shelf and territorial waters.55 The legal implications of China’s U-shaped “traditional maritime boundary line” in the South China Sea and its possible role in any future boundary delimitation are examined by Zou Keyuan.56 In his view, the water areas enclosed by the line cannot be considered historic waters.57 He suggests that China claims the islands and their adjacent waters inside the line.58 In addition, he argues the line can assist Beijing in delimiting the maritime boundary with other countries in the South China Sea.59
The problem of disentangling the sovereignty and jurisdictional claims and identifying a clear case for one highlights the limitations of international law in resolving the Spratly Islands dispute.60 In this regard, several commentators suggest a solution probably depends more on politics than legal argumentation.61
Marine Political Geography
In a 1985 contribution Victor Prescott discusses the baselines of the South China Sea littoral states and the agreed and unresolved maritime boundaries in the area.62 In the process, he notes that no agreed definition of the Spratly Islands exists (see Chapter 3 for his suggested definition). For states on the margins of the South China Sea and the narrower area of the Spratly Islands, Prescott examines limits in
55 R. Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia. An International Law Perspective, Kluwer Law International, London, 1998. The map is known as the Peta Menunjukkan Sempadan Perairan dan Pelantar Benua Malaysia Baru, or Peta Baru (“New Map”). 56 Zou Keyuan, “The Chinese Traditional Maritime Boundary Line in the South China Sea and Its Legal Consequences for the Resolution of the Dispute over the Spratly Islands”, The International Journal of Marine and Coastal Law 14(1), 1999, pp. 27-55. 57 Ibid., p. 44. 58 Ibid., p. 52. 59 Ibid., p. 54. 60 See for example, Stuart B. Kaye, “The Spratly Islands Dispute: a legal background”, Maritime Studies 102, 1998, p. 23; R. Haller-Trost, The Spratly Islands. A Study on the Limitations of International Law, Centre of South-East Asian Studies Occasional Paper No. 14, University of Kent at Canterbury, 1990. 61 Kaye, “The Spratly Islands Dispute: a legal background”, p. 24; Austin, China’s Ocean Frontier, p. 338; Dzurek, The Spratly Islands Dispute: Who's On First?, p. 55; Christopher C. Joyner, “The Spratly Islands Dispute: Rethinking the Interplay of Law, Diplomacy, and Geo-politics in the South China Sea”, The International Journal of Marine and Coastal Law 13(2), 1998, p. 236. 62 J.R.V. Prescott, The Maritime Political Boundaries of the World, Methuen, London and New York, 1985, pp. 209-33.
10 the sea that can be drawn by one country and those that involve two or more countries and thus would require bilateral consultation to settle.63 He finds that of ten potential bilateral maritime boundaries on the Sea’s margins, only half have been delimited albeit incompletely.64 In the Spratlys he suggests only the Philippines could draw archipelagic baselines encircling some of the islands present and the possibility for establishing straight baselines is low.65 David Hancox and Victor Prescott present a comprehensive description and analysis of all the islands and rocks above high water, reefs that emerge at low water and shoals that are always submerged in the Spratlys as well as details about hydrographic surveys undertaken and available charts of the area.66 A subsequent work by these two authors traces secret hydrographic surveys in the Spratly Islands undertaken by Britain, France, Japan and the US in the 1930s and early 1940s. They also demonstrate that present day navigational publications of the area have their roots in the 1812 chart by Captain James Horsburgh, Hydrographer to the East India Company, first published in 1821.67 Contest in the Spratly Islands is not a new development they observe, more a case of history repeating itself. The differentiating factor is that “now the protagonists are nations bordering the area, not three or four geographically distant superpowers.”68
Marine Resource Management
The actual and potential marine resources of the South China Sea have been the focus of several studies. Much attention has focused on the hydrocarbon potential of the area69 although estimates of reserves vary widely. The hydrocarbon emphasis
63 Victor Prescott, Limits of National Claims in the South China Sea, ASEAN Academic Press, London, 1999. 64 Ibid., p. 43. 65 Ibid., p. 44. 66 David Hancox and Victor Prescott, A Geographical Description of the Spratly Islands and an Account of Hydrographic Surveys Amongst Those Islands, Maritime Briefing 1(6), International Boundaries Research Unit, University of Durham, Durham, 1995. 67 David Hancox and Victor Prescott, Secret Hydrographic Surveys in the Spratly Islands, ASEAN Academic Press, London, 1999. 68 Ibid., p. 36. 69 See for example, Mark J. Valencia, South-East Asian Seas: Oil Under Troubled Waters. Hydrocarbon Potential, Jurisdictional Issues, and International Relations, Oxford University Press, Singapore, 1985; Diane C. Drigot, “Oil Interests and the Law of the Sea: The Case of the Philippines”, Ocean Development and International Law 12(1/2), 1982, pp. 23-70.
11 has overshadowed the fisheries dimension, despite the latter’s significant economic, social and food security contributions to littoral state communities and its potential for functional co-operation among the claimants.70 Another aspect that has not received the attention it deserves is protection of the South China Sea’s environment. David Rosenberg discusses the challenges and opportunities for the littoral states arising from the smoke haze problem71 while Tom Naess describes emerging co- operative efforts launched under the auspices of the Informal Workshop on Managing Potential Conflicts in the South China Sea series and the United Nations Environment Programme.72 The idea of marine protected areas or parks as a means to conserve the natural values of the South China Sea is advocated by both Edgardo Gomez and John McManus.73 Francisco Magno takes a different approach, arguing for the establishment of an “environmental security protocol” committing members of the Association of Southeast Asian Nations (ASEAN), China and Taiwan to “pursue their sovereignty claims in a peaceful manner and to protect the environment in the disputed islands and waters” until a joint resource management regime is established.74
Security and Strategy
Lee Ngok places China’s strategic considerations in the South China Sea within the broader context of a military doctrine that stresses responding to a local war “conducted within limited space and time, with limited objectives.”75 In his view, the ability to deploy rapid reaction forces coupled with a growing long-range maritime strike and support capability enhances China’s ability to exert influence in
70 Kuan-Hsiung Wang, “Bridge over troubled waters: fisheries cooperation as a resolution to the South China Sea conflicts”, The Pacific Review 14(4), 2001, pp. 531-51; Daniel Y. Coulter, “South China Sea Fisheries: Countdown to Calamity”, Contemporary Southeast Asia 17(4), 1996, pp. 371-88. 71 David Rosenberg, “Environmental Pollution around the South China Sea: Developing a Regional Response”, Contemporary Southeast Asia 21(3), 1999, pp. 119-45. 72 Tom Naess, “Environmental cooperation around the South China Sea: the experience of the South China Sea Workshops and the United Nations Environment Programme’s Strategic Action Programme”, The Pacific Review 14(4), 2001, pp. 553-73. 73 Edgardo D. Gomez, “Marine Scientific Research in the South China Sea and Environmental Security”, Ocean Development and International Law 32(2), 2001, pp. 205-211; John W. McManus, “The Spratly Islands: A Marine Park?”, Ambio 23(3), 1994, pp. 181-86. 74 Francisco C. Magno, “Environmental Security in the South China Sea”, Security Dialogue 28(1), 1997, p. 107. 75 Lee Ngok, “Fishing in Troubled Waters? Chinese Strategic Considerations in the South China Sea”, American Asian Review 12(4), 1994, p. 105.
12 the South China Sea.76 And moves to establish a genuine blue water navy will strengthen power projection possibilities in the area.77
Sheng Lijun considers the Spratlys issue is related to China’s broader goal of modernisation, reflected in the increasing emphasis in its foreign relations on the role of economic integration.78 He suggests that its policy on the Spratlys, essentially to shelve the sovereignty issue and develop the area jointly,79 should be placed in the context of this overall strategy. This is to apply the levers of geopolitical position, market potential, political influence, military strength and historical and cultural association with neighbouring countries to develop China’s relations with ASEAN, Japan and the Middle East.80
In China’s case, nationalism and the recovery of lost territory have been suggested as motives behind its behaviour.81 Chen Jie notes the idea that the Spratlys have been part of China’s territory since ancient times is buried deep within the country’s national psyche. In this context, other claimants have been opportunistic in occupying its islands and reefs and “[c]onceptually and theoretically, until its sovereignty over the entire Spratly archipelago is recognized, China regards itself as a victim of regional countries’ aggression and encroachment.”82 Accordingly, “[i]f, after losing territories to Western powers a century ago, China should now lose territory to regional countries, not only its national pride but also the legitimacy of the communist regime would be questioned.83
76 Ibid., pp. 107-111. 77 Ibid., pp. 109-110. 78 Sheng Lijun, China’s Policy Towards the Spratly Islands in the 1990s, Working Paper No. 287, Strategic and Defence Studies Centre, The Australian National University, Canberra, 1995, p. 19. 79 Ibid., p. 10. 80 Ibid., p. 25. 81 See for example, Ji, “The PLA Navy in the Changing World Order”, p. 103; Zhan, “China Goes to the Blue Waters”, p. 196. 82 Chen, “China’s Spratly Policy”, p. 893. 83 Ibid., p. 894.
13 Chris Roberts invokes Chinese strategic culture to explain Beijing’s actions in the Spratlys.84 This approach emphasises the manipulation of an opponent’s centre of gravity, gaining and retaining the initiative through a variety of direct and indirect means to gain a strategic advantage to wage war on one’s own terms.85 Rather than containing or opposing China’s presence in the South China Sea, Roberts favours a strategy of joint development and engagement in a regional economic and security partnership.86
In Shee Poon Kim’s view, the Chinese are nationalists searching for approaches to recover their lost territories and ways to prevent the gradual loss to others of precious mineral and maritime resources.87 Lost territories should be recovered when opportune.88 Shee, like Sheng Lijun, argues that the strategic aspect of China’s policies towards the South China Sea in the post-Cold War era is inseparable from its broader national interests.89
The English school of International Relations informs Liselotte Odgaard’s thesis that a dynamic tension between co-operation and deterrence on the South China Sea issue exists in the relationship among China, Southeast Asian countries and the United States.90 She goes on to argue that deterrence and co-operation “are not mutually exclusive, but instead may co-exist as parts of a stable security arrangement between China and Southeast Asia.”91 Beginning in the 1970s, in her view, the South China Sea changed from a non-essential to an essential dispute. This was because of increasingly assertive actions by claimants in terms of occupations,
84 Chris Roberts, Chinese Strategy and the Spratly Islands Dispute, Working Paper No. 293, Strategic and Defence Studies Centre, The Australian National University, Canberra, 1996, p. 3. 85 Ibid., pp. 7-13. 86 Ibid., p. 31. 87 Shee, “The South China Sea in China’s Strategic Thinking”, p. 371. 88 Shee Poon Kim, “China’s Changing Policies Toward the South China Sea”, American Asian Review 12(4), 1994, pp. 67-68. 89 Shee, “The South China Sea in China’s Strategic Thinking”, p. 372. 90 Liselotte Odgaard, Maritime Security between China and Southeast Asia. Conflict and cooperation in the making of regional order, Ashgate Publishing Ltd, Aldershot, 2002. See also Liselotte Odgaard, “Deterrence and Co-operation in the South China Sea”, Contemporary Southeast Asia 23(2), 2001, pp. 292-306. 91 Odgaard, Maritime Security between China and Southeast Asia, p. 9.
14 marine resource development and claims to maritime space. In addition, the need to respond to China’s intensified actions in the area became inescapable.92
Ralph Cossa explores the security implications of conflict in the South China Sea.93 While the prospects of confrontation appear low today, he suggests it is unwise to ignore the possibility, and in this context identifies eight possible “triggers of conflict”. Specifically, oil exploration or production activity, creeping occupation of features, armed displacement from features, armed enforcement at sea of claims, accidents or miscalculations, other provocative acts by claimants, spill-over effects of broader regional problems/tensions and threats to regional SLOCs.94 He emphasises the need for confidence-building measures to avert trigger(s) being pulled, including dialogue on each claimants’ “line in the sand” that should not be crossed.95
Dialogue and Confidence-building
Lee Lai To traces China’s engagement in bilateral and multilateral dialogues on the South China Sea/Spratly Islands dispute.96 He notes that in bilateral discussions China favours an approach of going from general principles to specific issues.97 In multilateral forums, it reluctantly agreed to discuss confidence-building measures with ASEAN and in the ASEAN Regional Forum (ARF) but not in the informal series of Workshops on Managing Potential Conflicts in the South China Sea.98 He goes on to suggest that China’s dialogues with the other claimants seek to minimise the emergence of a “grand coalition” of the US, Japan and ASEAN criticising its actions in the South China Sea.99
92 Ibid., pp. 105-06. 93 Ralph A. Cossa, Security Implications of Conflict in the South China Sea: Exploring Potential Triggers of Conflict, A Pacific Forum CSIS Special Report, Honolulu, 1998, <
15 Since 1990 the informal Workshop on Managing Potential Conflicts in the South China Sea convened by Indonesia and co-sponsored by Canada has provided a unique forum for all claimants to discuss ways in which to advance their common interests while setting aside the sovereignty question. Hasjim Djalal and Ian Townsend-Gault succinctly describe the work of the forum.100 Achievements they identify include greater awareness of and attention to the dispute both within the region and beyond, seeding the idea of a regional code of conduct, injection of results into formal inter-governmental processes such as the ARF and project proposals on, inter alia, biodiversity protection, monitoring sea-level rise and marine scientific research and information exchange.101 Allan Shephard notes the forum’s value in deepening the habit of dialogue and reducing tension.102 Ted McDorman concurs but adds that the forum’s existence has not constrained unilateral action by some claimants.103 This consideration and the lack of substantive progress worry commentators,104 although support for the forum’s continuance remains firm.
Scott Snyder, Brad Glosserman and Ralph Cossa identify two principles to guide confidence-building measures in the South China Sea dispute: openness and transparency, and encouragement of multilateral dialogue.105 Their recommendations focus on strengthening dialogue and mutual understanding, including a return to the status quo at the time of the 1992 ASEAN Declaration on the South China Sea, giving greater emphasis to environmental protection of the area, instituting greater transparency through regular military-to-military co-operation and establishing uniform international safety standards for vessels and aircraft. To minimise conflict and encourage conflict resolution they propose discussion, or better, settlement of
100 Hasjim Djalal, “Indonesia and the South China Sea Initiative”, Ocean Development and International Law 32(2), 2001, pp. 97-103; Ian Townsend-Gault, “Preventive Diplomacy and Pro- Activity in the South China Sea”, Contemporary Southeast Asia 20(2), 1998, pp. 171-90. 101 Ibid., p. 185-86; Djalal, “Indonesia and the South China Sea Initiative”, p. 101. 102 Allan Shephard, “Oil on Troubled Waters: Indonesian Sponsorship of the South China Sea Workshops”, Studies in Conflict and Terrorism 18(1), 1995, pp. 1-15. 103 Ted L. McDorman, “The South China Sea Islands Dispute in the 1990s – A New Multilateral Process and Continuing Friction”, The International Journal of Marine and Coastal Law 8(2), 1993, p. 276. 104 See for example, Valencia, Van Dyke and Ludwig, Sharing the Resources of the South China Sea, p. 115. 105 Scott Snyder, Brad Glosserman and Ralph A. Cossa, Confidence Building Measures in the South China Sea, Issues and Insights No. 2-01, Pacific Forum CSIS, Honolulu, 2001, p. 19, <
16 bilateral and trilateral maritime delimitations and dialogue on fisheries resource management in the Scarborough Shoal area.106
Regime Development
Mark Valencia has long championed the establishment of a management regime in the South China Sea as a means to defuse the dispute. In a 1989 article he proposed the idea of a demilitarised, nuclear weapons-free zone in the Spratlys and the establishment of a co-operative regime under a Spratly Authority established by treaty to manage and develop the resources present for the benefit of all claimants.107 Elsewhere he discusses its modalities.108 Together with Jon Van Dyke and Noel Ludwig, Valencia outlines principles, objectives and constituent elements that could underpin a “model multilateral maritime regime” for the South China Sea.109 They outline three sample regimes: a Spratly Management Authority governing an equidistant area in which the share of costs and benefits for each claimant is based on a number of criteria;110 the establishment of 12 joint development companies covering each area where overlapping claims occur, overseen by an umbrella Spratly Co-ordinating Agency;111 and the creation of a Spratly Management Authority to manage hydrocarbon development and fisheries within that area enclosed by lines joining the outermost drying reefs.112
1.2 Analytical Niche and Contribution of the Thesis
The literature review reveals a rich body of pre-existing work on the South China Sea/Spratly Islands dispute. At the same time, gaps are evident. The analytical
106 Ibid., pp. 19-23. 107 Mark J. Valencia, “All-for-everyone solution”, Far Eastern Economic Review, 30 March 1989, pp. 20-21. 108 See for example, Mark J. Valencia, “Spratly Solution Still at Sea”, The Pacific Review 6(2), 1993, pp. 163-68. The Spratly Management Authority proposal is presented in summarised form in Mark J. Valencia, “How to Carve Water”, Far Eastern Economic Review, 6 June 1996, p. 32; Mark J. Valencia, “A Spratly Solution” , Far Eastern Economic Review, 31 March 1994, p. 30. 109 Valencia, Van Dyke and Ludwig, Sharing the Resources of the South China Sea, pp. 202-09. 110 Ibid., pp. 210-17. 111 Ibid., pp. 217-18. 112 Ibid., pp. 218-19.
17 niche filled by this thesis is the gap in our understanding about the relationship among foreign policy decision-making, government behaviour and domestic politics. This places the thesis within the genre of studies that emphasise an intra-state approach. Even here, the thesis departs from existing work. First, previous intra-state analyses tend to treat the above elements in a peripheral manner rather than as the principal subject of investigation. Second, cross-national analyses are rare. An exception is Joon Num Mak who presents a comparative analysis of how the dispute is perceived in and influences behaviour by China, Malaysia, the Philippines, Taiwan and Vietnam. His analysis explicitly includes the domestic politics dimension.113 Third, none of the previous studies examined who in a political regime has the power and ability to commit national resources to the Spratly issue and the authority to prevent reversal of the decision. An unanswered question, then, is which group of actors “at the apex of foreign policy decision-making”114 on the Spratlys dispute is the decision unit and what is its influence on government behaviour towards this issue?
In this context, the thesis contributes to the literature in three ways. First, it examines foreign policy decision-making in China, Malaysia and the Philippines in relation to four reference issues in the Spratly Islands dispute. In addition, it is unique in applying the decision units approach to test the ‘fit’ between hypothesised and actual government behaviour.
A cross-national, cross-regime exploration that exposes domestic political determinants of government behaviour is the second contribution. Much of the literature on the South China Sea/Spratly Islands dispute is China-centric. This is understandable given that Beijing’s claim is the largest and that its assent is pivotal to any solution to the dispute. The effect, however, is a bias in geographical and political regime coverage. Another problem is that the orientation of many existing studies is at the systemic level. Limited attention is given to looking inside the “black
113 Joon Num Mak, Domestic Politics and Conflict-Resolution in the South China Sea: China and the Spratlys Dispute, Unpublished manuscript provided to the author, 2000. 114 This phrase is borrowed from Margaret G. Hermann, Charles F. Hermann and Joe D. Hagan, “How Decision Units Shape Foreign Policy Behavior” in Charles F. Hermann, Charles W. Kegley, Jr. and James N. Rosenau (eds), New Directions in the Study of Foreign Policy, Allen and Unwin, Boston, 1987, p. 311.
18 box” of the state to explain claimants’ behaviour. The thesis not only addresses the issue of unbalanced geographical and regime coverage but also explicitly includes domestic politics in the analysis.
Finally, the thesis adds to cumulative knowledge about the explanatory utility of an existing approach within the foreign policy analysis ‘toolkit’ applied to a specific issue area: maritime territorial disputes. This application of the decision units approach therefore breaks new ground.
Among the community of scholars, several are likely to find the thesis of interest. Security analysts working on the Spratlys/South China Sea dispute are an obvious audience. Analysts of oceans governance will also find the work of relevance because of its consideration of sovereignty and jurisdictional issues, conflict management and maritime confidence and security building (MCSB). Foreign policy specialists will be interested in the study because of its application of an approach in the foreign policy analysis literature to the specific issue of maritime territorial disputes. Similar studies are few in number. It is reiterated, however, that although the thesis will be of interest to a plurality of scholars, its goal is firmly singular. That is, to apply the decision units approach to examine who in China, Malaysia and the Philippines made foreign policy decisions on selected issues relating to the Spratlys dispute, how the decision unit influenced government behaviour and the role of domestic politics.
1.3 Methodology
Alexander George’s method of structured, focused comparison informs the overall design of the thesis.115 By focused George meant the selective analysis of certain parts of a case, whereas structured refers to the use of general questions to inform data collection and analysis of that particular case.116 He identifies three
115 Alexander L. George, “Case Studies and Theory Development: The Method of Structured, Focused Comparison” in Paul Gordon Lauren (ed.), Diplomacy. New Approaches in History, Theory, and Policy, The Free Press, New York, 1979, pp. 54-59. 116 Ibid., pp. 61-62.
19 phases in this approach. First, the study design and structure is specified.117 Second, the individual case studies are carried out.118 Third, the findings of the case studies are compared against the initial propositions to determine whether the latter are confirmed or in need of reformulation.119 This approach also reflects Robert Yin’s contention that research questions that seek to explain the ‘how’ and ‘why’ of a contemporary set of events lend themselves to case studies.120 Moreover, one of the strengths of case studies is their flexibility in allowing the analyst to draw upon a range of documentary material coupled with interviews and observation.121 A multiple embedded case study design as described by Yin enables these different elements to be located within a coherent analytical structure.122 This design is appropriate for research focused on comparative analysis123 and where a number of units of analysis exist.124 This is the case here.
China, Malaysia and the Philippines were selected as the case study countries because they represent three dissimilar political regimes. China is “a socialist state under the people’s democratic dictatorship”125 in which power is centralised institutionally in the Chinese Communist Party (CCP) and leadership resides formally with its Secretary.126 Malaysia is a constitutional monarchy with a federal parliamentary system of government. While the Yang Di Pertuan Agong (King) is head of state, day-to-day administration is the responsibility of a Cabinet led by the Prime Minister. The Agong appoints the Cabinet from members of parliament.127 The Philippines “is a democratic and republican state”128 led by the
117 Ibid., pp. 54-57. 118 Ibid., pp. 57-58. 119 Ibid., pp. 58-59. 120 Robert K. Yin, Case Study Research. Design and Methods, Second Edition, Sage Publications, Thousand Oaks, London and New Delhi, 1994, p. 6. 121 Ibid., p. 8. 122 Ibid., pp. 44-51. 123 Ibid., p. 45. 124 Ibid., Figure 2.4 on p. 39 and pp. 41-42. 125 Constitution of the People’s Republic of China, 4 December 1982, Article 1, <
20 president and with a unitary structure of government.129 This diversity allows us to consider whether or not regime form is important in foreign policy decision-making on the Spratlys dispute, and how. Four case studies underpin the empirical analysis. They are the approaches taken by Malaysia and the Philippines to bolster their sovereignty claims, China’s establishment of a comprehensive maritime jurisdiction regime covering the Spratly Islands among other areas, China-Philippines contestation over Mischief Reef and the development of a regional instrument to regulate conduct in the South China Sea. The case studies reflect important developments in the dispute during the 1990s. In addition, the selection embraced initiatives undertaken at a variety of levels: unilaterally, bilaterally and multilaterally. This reflected reality: the governments concerned implemented different policy responses to the same problem.
The period covered is from 1991 to 2002. Although the South China Sea dispute pre-dates 1991, and historical and archaeological evidence cited by the parties to support their sovereignty claims certainly goes back much earlier than this, several reasons lie behind the choice of start date. First, the end of the Cold War occurred with the demise of the Soviet Union in 1991. In Asia, as elsewhere, the ideological contest and bipolar strategic calculus that had previously framed international relations now became redundant. A new regional order is evolving as China, India and Japan manoeuvre to consolidate their position vis-à-vis each other and in relation to the remaining superpower, the US. One implication of the changed global and regional environmental context was the revival in Asia of maritime territorial disputes that had lain dormant during the Cold War. For example, although the South China Sea was considered a potential problem area in the 1970s and 1980s it never attained the status of principal regional security issue during that period.130 Another implication was that states in Southeast Asia began shifting from a focus on internal security to external security, especially in the maritime domain. As Desmond Ball notes, the security environment of East Asia is principally maritime reflecting the region’s geography, the presence of major sea lines of communication facilitating
129 Joaquin L. Gonzalez, III, “Philippines. Continuing People Power” in John Funston (ed.), Government and Politics in Southeast Asia, Institute of Southeast Asian Studies, Singapore, 2001, p. 261.
21 passage of commercial and naval vessels, the economic importance of its marine resources and the potential for military threats to come over or under the sea. In this context, defence self-reliance based on strengthening maritime capabilities assumed particular importance.131
A further reason for selecting 1991 as the start date was the wider recognition in policy and academic circles of the potential threat to regional peace and security should conflict erupt in the South China Sea. The signing of the Paris Peace Accord in October 1991 formally signaled the end of the Cambodian crisis. Some commentators expressed concern, however, that the prospective regional peace dividend of this agreement might be undermined by conflict in the South China Sea, recalling in particular the March 1988 clash between China and Vietnam in the Spratly Islands. This galvanised a tour of ASEAN capitals in 1989 by Indonesia’s then Ambassador-at-Large for the Law of the Sea and Maritime Affairs Dr. Hasjim Djalal to consult on whether the dispute in the South China Sea merited attention by the membership. The response was in the affirmative, paving the way for the 1990 launch by Indonesia of an informal dialogue process.132
Third, and related to the above, it was in 1991 that all parties to the South China Sea dispute first engaged in informal and formal dialogue. In 1990 the inaugural Informal Workshop on Managing Potential Conflicts in the South China Sea was held in Bali, Indonesia. Participation was limited to ASEAN member states. At the second workshop, held in Bandung, Indonesia in 1991, participation included not only ASEAN members but also China, Taiwan, Vietnam, Laos and Cambodia. The inclusion of China, Taiwan and Vietnam in the workshop was significant because at last all the parties to the South China Sea dispute were present.
In addition, formal dialogue between ASEAN and China was launched in July 1991 when China was invited by Malaysia to attend the 24th ASEAN Ministerial
130 Ang Cheng Guan, “The South China Sea Dispute Revisited”, Australian Journal of International Affairs 54(2), 2000, p. 201. 131 Desmond Ball, “Regional maritime security” in David Wilson and Dick Sherwood (eds), Oceans Governance and Maritime Strategy, Allen and Unwin, Sydney, 2000, p. 60. Southeast Asia is included in his reference to East Asia.
22 Meeting (AMM) in Kuala Lumpur.133 The South China Sea dispute was not discussed in this inaugural encounter.134 At the July 1992 AMM in Manila when China was again invited by the host country, ASEAN first raised the issue of the South China Sea dispute.135 It was at this meeting that the ASEAN Declaration on the South China Sea was adopted. In 1996 China became an ASEAN Dialogue Partner. In this capacity it participates in the annual ASEAN Post-Ministerial Consultation (ASEAN PMC) and, since 1997, in a dedicated ASEAN-China Summit meeting.
A final reason for the choice of 1991 was that by then 50 of the 60 ratifications, accessions and successions required to enable the new law of the sea convention to enter into force had been received by the United Nations.136 A new legal framework governing the use and management of the world’s oceans and seas was within reach. In opening the instrument for signature in 1982, the international community had agreed, inter alia, to the establishment of a suite of maritime ‘zones’137 and the specification of associated jurisdictional rights and responsibilities of coastal and land-locked states. Anticipating the entry into force of the instrument and its extended maritime jurisdiction provisions, governments moved to stake claims to maritime areas and features, and to the resources in the waters, on and under the seabed. Whereas the objective of codifying the different maritime zones was to promote predictability and order in the oceans, paradoxically competing boundary claims have created uncertainty and tension between littoral states. Symptomatic of this situation is the overlapping jurisdictional claims in the Spratly Islands.
132 Hasjim Djalal, “South China Sea Island Disputes”, The Raffles Bulletin of Zoology, Supplement No. 8, 2000, <
23 The end point of 2002 co-incided with the signing of the Declaration on the Conduct of Parties in the South China Sea by ASEAN and China at their 4 November summit meeting in Phnom Penh, Cambodia. This represents a new chapter in their relations concerning the dispute, amid an expectation that the ‘rules of the game’ now established provide a foundation for deepening and broadening co- operation and confidence building. Only time and, more importantly, the actions of the claimants will tell. For the purpose of this thesis, however, the conclusion of the declaration is a logical termination point.
Material used in the thesis originates from several sources, including official documents and statements, newspapers and secondary sources. Interviews were conducted in October and December 2001 in Beijing, Kuala Lumpur and Manila, with updates provided by correspondence after that period. Respondents were officials from departments of foreign affairs, national security, ocean affairs and fisheries and experts from strategic studies, foreign policy and marine affairs think- tanks as well as academics specialising in international relations, Asian studies and strategic studies. Appendix I lists the interview questions. Appendix II lists the interviewees.
1.4 Structure of the Thesis
Chapter 2 introduces foreign policy analysis, the conceptual foundation underlying the thesis. Its utility in the context of this study lies in bridging the international and domestic politics divide to help explain foreign policy decision- making and behaviour. The decision units approach, a sub-literature within foreign policy analysis, is then described in detail. This approach guides the empirical analysis presented in the body of the study. The chapter also discusses how and why domestic politics matters in foreign policy decision-making, aligning itself with the
137 These zones are the 12 nautical mile territorial sea as measured from coastal baselines, a further 12 nautical mile contiguous zone, a 200 nautical mile exclusive economic zone and a continental shelf margin that may extend as far as 350 nautical miles from the coastal baseline.
24 contention that “a nation’s foreign policy is both a reflection and an instrument of domestic policy.”138
138 Salvador P. Lopez, “The Foreign Policy of the Republic of the Philippines” in Raul P. De Guzman and Mila A. Reforma (eds), Government and Politics of the Philippines, Oxford University Press, Singapore, Oxford and New York, 1988, p. 262.
25 Chapter 3 presents an overview of the Spratly Islands dispute. Following a review of the geography, natural resources and strategic significance of the area the sovereignty claim of each of the six governments involved is outlined. This sets the context for the empirical analysis presented in Chapters 4 to 7.
Chapter 4 focuses on the approaches adopted by Malaysia and the Philippines to bolster their sovereignty claims. This common end was pursued by different means. In seizing Investigator Shoal and Erica Reef in mid-1999, Malaysia emphasised occupation and construction. By contrast, the Philippines has maintained a consistent strategy of internationalising the Spratly Islands dispute to amplify support for its claim.
China’s extended maritime jurisdictional regime covering the Spratly Islands among other areas is examined in Chapter 5. Between 1992 and 1998 China introduced a comprehensive regime based on the maritime zones set out in the LOSC, an instrument it ratified in 1996. Each component of the regime is introduced. Given that the regime does not exist in a legal vacuum, the chapter situates it within China’s law-making process and structure. This facilitates an analysis of the decision unit behind the establishment of the regime, the unit’s influence on government behaviour and the role of domestic politics.
Beginning in 1995, China and the Philippines engaged in a contest over Mischief Reef. This intensified in 1998 with the discovery that China was reinforcing its structures there. Chapter 6 surveys developments between 1991 and 2002 to set and update the context before examining who in Beijing and Manila made decisions about Mischief Reef. The behaviour of each government is considered, including the conditioning influence played by international and domestic politics of the period.
Chapter 7 traces the development of a regional instrument to regulate the conduct of parties in the South China Sea, beginning with the Bandung Principles enunciated in 1991. Throughout the 1990s the idea of a regional instrument of conduct was given form and substance, culminating in the signing of the Declaration on the Conduct of Parties in the South China Sea by ASEAN and China in November
26 2002. The chapter looks behind the scenes to identify the decision units involved in Beijing, Kuala Lumpur and Manila. As for the other case studies, consideration is also given to how the decision unit shaped foreign policy behaviour and the influence of domestic politics.
Chapter 8 synthesises the findings of the empirical analysis, drawing three conclusions about the strengths and weaknesses of the decision units approach applied to the Spratly Islands dispute. First, the approach successfully described who in China, Malaysia and the Philippines made decisions on the Spratlys dispute and the process involved. Second, it provided explanations about the relationship between the decision-making process of the decision unit and government behaviour. The injection of domestic politics enhanced this understanding. Third, the approach had low predictive power. The ‘fit’ between hypothesised and actual government behaviour was poor in the majority of cases examined. While it is not a comprehensive analytical tool, the combined decision units-domestic politics approach offered deeper insight into government decisions and behaviour on the Spratly Islands dispute than hitherto reported in the literature.
27 2.0 FOREIGN POLICY ANALYSIS, DECISION UNITS AND DOMESTIC POLITICS
This chapter introduces foreign policy analysis, the conceptual foundation of the thesis. It then reviews three major approaches in the literature that have shaped the systematic study of foreign policy decision-making: the decision-maker-as- system-participant framework proposed by Richard Snyder, H.W. Bruck and Burton Sapin, James Rosenau’s pre-theory of foreign policy and Graham Allison’s models based on rational actor, organisational behaviour and bureaucratic politics. Limitations of these approaches are noted. Following this, the decision units approach, a sub-literature of foreign policy analysis, is introduced. American scholars Margaret and Charles Hermann and Joe Hagan have advanced the decision units approach as a tool to identify the pivotal foreign policy decision-makers in a government for a particular issue and to understand how they influence a nation’s behaviour in international affairs. This approach informs the empirical analysis in chapters 4 to 7. Government decisions and behaviour are not insulated from domestic political considerations. How and why domestic politics matters in foreign policy decision-making is discussed in the chapter’s penultimate section. The thesis explicitly includes domestic politics in the empirical analysis. Finally, a summary of the chapter’s key points is presented.
2.1 Foreign Policy Analysis
As a field of systematic, scholarly inquiry foreign policy analysis (FPA) dates from the 1950s,1 spurred by concern about the Realist paradigm’s singular emphasis on power to explain international relations and the development of new tools in decision theory and cognitive psychology.2 From the outset FPA has focused on how foreign policy decisions are made. Foreign policy and the decision-making process that produces it have been defined as “the goals that officials representing
1 Deborah J. Gerner, “The Evolution of the Study of Foreign Policy” in Laura Neack, Jeanne A.K. Hey and Patrick J. Haney (eds), Foreign Policy Analysis. Continuity and Change in Its Second Generation, Prentice Hall, Englewood Cliffs, 1995, p. 17. 2 James F. Voss and Ellen Dorsey, “Perception and International Relations: An Overview” in Eric Singer and Valerie Hudson (eds), Political Psychology and Foreign Policy, Westview Press, Boulder, 1992, pp. 5-6.
27 states seek abroad, the values that underlie those goals, and the means or instruments used to pursue them.”3 One reason why examination of foreign policy decision- making is of interest to scholars and policy analysts is that it provides insight into the “intentions and strategies of governments and how definitions of the situation are translated into action.”4 This reflects its emphasis on the role of human beings, acting individually and collectively, as a major influence on behaviour and change in international politics.5
FPA has been labelled a bridging discipline linking nation-states and their sub-units to the broader international system.6 Margot Light characterises foreign policy analysis as linking the “micro level of politics with the macro level of the international system”7, a view echoed by other scholars.8 In spanning the boundary between domestic and international politics, the foreign policy analyst is:
interested in the entire relationship that national actors establish with their external environments and not in only one segment of it … foreign policy becomes intelligible only to the extent that its sources, contents, and consequences are considered jointly. This is the distinct viewpoint of the field.9
3 Charles W. Kegley, Jr. and Eugene R. Wittkopf, World Politics. Trend and Transformation, Sixth Edition, St. Martin’s Press, New York, 1997, p. 40. 4 Margaret G. Hermann, “Leaders and Foreign Policy Decision-making” in Dan Caldwell and Timothy J. McKeown (eds), Diplomacy, Force, and Leadership. Essays in Honor of Alexander L. George, Westview Press, Boulder and Oxford, 1993, p. 78. 5 Valerie M. Hudson with Christopher S. Vore, “Foreign Policy Analysis Yesterday, Today, and Tomorrow”, Mershon International Studies Review 39 (Supplement 2), 1995, p. 210. 6 James N. Rosenau, “Toward the Study of National-International Linkages” in James N. Rosenau (ed.), Linkage Politics: Essays on the Convergence of National and International Systems, The Free Press, New York, 1969, pp. 44-63. 7 Margot Light, “Foreign policy analysis” in A.J.R. Groom and Margot Light (eds), Contemporary International Relations: A Guide to Theory, Pinter Publishers Ltd, London, 1994, p. 94. 8 Charles F. Hermann, “Epilogue: Reflections on Foreign Policy Theory Building” in Laura Neack, Jeanne A.K. Hey and Patrick J. Haney (eds), Foreign Policy Analysis. Continuity and Change in Its Second Generation, Prentice Hall, Englewood Cliffs, 1995, p. 254; Hudson with Vore, “Foreign Policy Analysis Yesterday, Today, and Tomorrow”, p. 228. 9 James N. Rosenau, “Comparative Foreign Policy: One-Time Fad, Realized Fantasy, and Normal Field” in Charles W. Kegley, Jr., Gregory A. Raymond, Robert M. Rood and Richard A. Skinner (eds), International Events and the Comparative Analysis of Foreign Policy, University of South Carolina Press, Columbia, 1975, p. 18.
28 Laura Neack, Jeanne Hey and Patrick Haney distinguish between first and second generation scholarship on foreign policy analysis.10 In the first generation between the 1950s-1970s research effort focused on explaining state behaviour by reference to “scientific”, data intensive models of theory building and comparative analyses of “events”.11 Work in this period has been labelled comparative foreign policy.12 The disappointing results of first generation work, especially the failure to develop an overall theory of foreign policy and uniform methodology, resulted in disillusionment with the comparative approach in the late 1970s.13 Eschewing grand theory building, beginning from the early-1980s second generation foreign policy scholarship has embraced eclecticism through contextualised, multisourced and multileveled studies.14 Labelled foreign policy analysis,15 this next generation work concentrates more on the context behind a state’s foreign policy behaviour, informed by empirical analysis based on a range of qualitative and quantitative methods.16
Several key assumptions of the Realist paradigm are challenged by the foreign policy analysis approach. First, it opens the ‘black box’ of the state, focusing attention on the role of, and relationships among, the different domestic actors shaping foreign policy. Rather than assuming the state is a homogenous unit foreign policy analysis disaggregates it into its constituent parts to provide insight about the way in which foreign policy is formulated and implemented. Second, it contests the notion of the state as a rational actor. Extensive research effort in foreign policy analysis has focused on explaining seemingly irrational foreign policy decisions and
10 Laura Neack, Jeanne A.K. Hey and Patrick J. Haney, “Generational Change in Foreign Policy Analysis” in Laura Neack, Jeanne A.K. Hey, and Patrick J. Haney (eds), Foreign Policy Analysis. Continuity and Change in Its Second Generation, Prentice Hall, Englewood Cliffs, 1995, pp. 2-3. 11 An event is defined as “the tangible artefact of the influence attempt that is foreign policy. It specifies “who does what to whom, and how” in the relations among states.” Hudson with Vore, “Foreign Policy Analysis Yesterday, Today, and Tomorrow”, p. 215. Reflective of the events-based research effort were the data sets gathered by the Comparative Research on the Events of Nations (CREON) programme and Jonathan Wilkenfeld’s International Crisis Behavior Datasets. 12 Hudson with Vore, “Foreign Policy Analysis Yesterday, Today, and Tomorrow”, p. 215; Neack, Hey and Haney, “Generational Change in Foreign Policy Analysis”, p. 3. Steve Smith also provides a useful review of the rise and decline of the comparative foreign policy approach: see Steve Smith, “Theories of foreign policy: an historical overview”, Review of International Studies 12(1), 1986, pp. 13-29. 13 Hudson with Vore, “Foreign Policy Analysis Yesterday, Today, and Tomorrow”, pp. 215-16; Neack, Hey and Haney, “Generational Change in Foreign Policy Analysis”, pp. 4-5. 14 Ibid., pp. 7-8. 15 Ibid., p. 3. 16 Ibid., pp. 11-12.
29 behaviour.17 Third, it challenges the view that the “national interest” is a homogeneous concept. By examining the interests, goals and relationships among the different players in the foreign policy decision-making process the multiple agendas at play are exposed and their implications for the definition of a coherent, single national interest considered.18
The roots of FPA lie in the United States, where it has been used extensively to examine actors and processes involved in that country’s foreign and defence policy decision-making.19 Outside this context the approach has been applied to examine the foreign policy behaviour of democracies, authoritarian regimes, developing countries and economies in transition.20 In addition, FPA has been used to structure examination of specific events21 and policy decisions.22
17 See for example Robert Jervis, Perception and Misperception in International Politics, Princeton University Press, Princeton, 1976. 18 Steve Chan and Donald A. Sylvan, “Foreign Policy Decision-making: An Overview” in Donald A. Sylvan and Steve Chan (eds), Foreign Policy Decision-making. Perception, Cognition, and Artificial Intelligence, Praeger Publishers, New York, 1984, pp. 2-3; Hudson with Vore, “Foreign Policy Analysis Yesterday, Today, and Tomorrow”, pp. 210-11; Light, “Foreign Policy Analysis”, p. 93. 19 See for example Morton H. Halperin, National Security Policy-Making: Analyses, Cases, and Proposals, Lexington Books, Lexington and London, 1975; Barry B. Hughes, The Domestic Context of American Foreign Policy, W.H. Freeman and Company, San Francisco, 1978; Charles W. Kegley Jr. and Eugene R. Wittkopf, American Foreign Policy. Pattern and Process, Fourth Edition, St. Martin’s Press, New York, 1991; Eugene R. Wittkopf (ed.), Domestic Sources of American Foreign Policy, Second Edition, St. Martin’s Press, New York, 1994. 20 See for example Peter Shearman, “The sources of Russian conduct: understanding Russian foreign policy”, Review of International Studies 27(2), 2001, pp. 249-63; M.E. Smith, “Conforming to Europe: The Domestic Impact of EU Foreign Policy Co-operation”, Journal of European Public Policy 7(4), 2000, pp. 613-31; Carol J. Bowman, Exploring the Effects of Regime Fragmentation on Foreign Policy Behavior in Southeast Asia, Unpublished Ph.D. dissertation, The George Washington University, 1999; Robert M. Uriu, “Domestic-International Interactions and Japanese Security Studies”, Journal of Asian and African Studies XXXIII(1), 1998, pp. 76-93; Roger E. Kanet and Susanne M. Birgerson, “The Domestic-Foreign Policy Linkage in Russian Politics: Nationalist Influences on Russian Foreign Policy”, Communist and Post-Communist Studies 30(4), 1997, pp. 335- 44; Jeffrey T. Checkel, Ideas and International Political Change: Soviet/Russian Behavior and the End of the Cold War, Yale University Press, New Haven, 1997; Michael D. Swaine, China: Domestic Change and Foreign Policy, RAND, Santa Monica, 1995; Joe D. Hagan, Political Opposition and Foreign Policy in Comparative Perspective, Lynne Rienner Publishers, Boulder and London, 1993, chapter 2. 21 For example, Graham T. Allison, Essence of Decision. Explaining the Cuban Missile Crisis, Little, Brown and Co., Boston, 1971; Allison Astorino-Courtois, “Clarifying Decisions: Assessing the Impact of Decision Structures on Foreign Policy Choices During the 1970 Jordanian Civil War”, International Studies Quarterly 42(4), 1998, pp. 733-54. 22 For example, Ranan D. Kuperman, “The Impact of Internal Politics on Israel’s Reprisal Policy during the 1950s”, The Journal of Strategic Studies 24(1), 2001, pp. 1-28; Graeme Cheeseman and Desmond Ball, “Australian Defence Decision-making: Actors and Processes” in Desmond Ball and Cathy Downes (eds), Security and Defence: Pacific and global perspectives, Allen and Unwin, Sydney, 1990, pp. 250-67; Hugh Smith, “Determinants of Defence Policy” in Fedor A. Mediansky (ed.), The Military and Australia’s Defence, Longman Cheshire, Melbourne, 1979, pp. 3-19.
30 Few studies have applied a FPA approach to examine maritime territorial disputes in Asia. Downs and Saunders analyse the relationship between political legitimacy and nationalism in China in the context of its dispute with Japan over the Diaoyu (Senkaku) Islands23. They find that in both 1990 and 1996 China’s behaviour towards Japan concerning the dispute was moderated by its priority on economic goals. This was at the expense of the nationalist credentials of the Chinese political regime and even criticism by the military.24 Deans also examines this dispute, although from the perspective of Chinese, Japanese and Taiwanese nationalism. He suggests that the respective governments are compelled to adopt a hard-line position not by choice but through domestic pressures and strategic considerations of the implications of their position on this dispute for other issues.25 Indeed, the governments have sought to downplay the dispute in recognition of their broader political and economic links.26 Chung’s analysis of the dispute on the other hand focuses on how the governments in China, Taiwan and Japan interacted not only with each other by diplomatic means but also with their respective domestic pressure groups.27 He concludes that pressure groups in these countries managed to press their respective governments to stand firm on the importance of national sovereignty although fully realising that the political, economic and security interests precluded inter-state confrontation.28
In the case of the dispute between Russia and Japan over the Southern Kuriles/Northern Territories, Sarkisov identifies the need to understand the complex mix of domestic politics, diplomacy, economics, defence and security.29 Williams
23 Erica Strecker Downs and Phillip C. Saunders, “Legitimacy and the Limits of Nationalism. China and the Diaoyu Islands”, International Security 23(3), 1998-1999, pp. 114-146. 24 Ibid., p. 117, pp. 138-39 and p. 145. 25 Phil Deans, “Contending Nationalisms and the Diaoyutai/Senkaku Dispute”, Security Dialogue 31(1), 2000, p. 128. 26 Ibid., p. 129. 27 Chien-Peng Chung, “The Diaoyu/Tiaoyutai/Senkaku Islands Dispute: Domestic Politics and the Limits of Diplomacy”, American Asian Review XVI(3), 1998, pp. 135-64. 28 Ibid., pp. 163-64. 29 Konstantin Sarkisov, “The Northern Territories Issue After Yeltsin’s Re-election: Obstacles to a Resolution from a Russian Perspective”, Communist and Post-Communist Studies 30(4), 1998, pp. 353-63. Useful analyses of the dispute are Seokwoo Lee, Towards a Framework for the Resolution of the Territorial Dispute over the Kurile Islands, Boundary and Territory Briefing 3(6), International Boundaries Research Unit, University of Durham, Durham, 2001; and James E. Goodby, Vladimir I. Ivanov and Nobuo Shimotom (eds), “Northern Territories” and Beyond. Russian, Japanese and American Perspectives, Praeger, Westport, 1995.
31 joins with this view.30 He notes Russia’s attempt to link a resolution to the dispute to a deepening of economic relations with Japan, especially inflows of investment to the Russian Far East.31 Williams also identifies the role of domestic politics as a constraining influence. In particular, rising nationalism, the influence of hard-line conservatives in the Russian parliament, public and military opposition and lack of political will by the leadership.32 He discerns a fundamental difference between Russian and Japanese viewpoints, however: most Russians view a return of the islands and the conclusion of a peace treaty as separate issues whereas the Japanese consider them inter-linked.33
2.2 Analysing Foreign Policy Decision-making
A range of approaches exists to structure analysis of foreign policy decision- making.34 Here we concentrate on three that have been influential in shaping the research agenda. First, the decision-making framework developed in 1954 by Richard Snyder, H.W. Bruck and Burton Sapin. Second, James Rosenau’s pre-theory of foreign policy and finally, Graham Allison’s models developed to explain the Cuban missile crisis.
30 Brad Williams, “Russia and the Northern Territories”, Russian and Euro-Asian Bulletin 7(8), 1998, <
32 Snyder, Bruck and Sapin’s Decision-making Framework
This model considers decision-makers as participants in a system of action.35 Accordingly, “the key to explaining why a state behaves the way it does lies in the way its decision-makers as actors define their situation.”36 Snyder, Bruck and Sapin define situation as:
an analytical concept pointing to a pattern of relationships among events, objects, conditions, and other actors organized around a focus which is the center of interest for the decision-makers … In turn the situation is related to a larger setting from which it has been abstracted by the actors, including other situations and the broader relationships surrounding them too.37
In their view the foreign policy decision-making process could be conceptualised in terms of linkages among the action, reaction and interaction of variables categorised under headings of internal and external setting and societal structure and behaviour.38 This conceptualisation, they suggest, has several advantages: it is more inclusive, it limits the number of categories within which to examine international politics, it provides clues about variables that might explain state behaviour and it aims to identify where and how relationships among variables relate to a government’s behaviour.39 And “the whole problem of national interest is bypassed by the adoption of the definition of the situation device.”40
Their approach views decision-making in an organisational context, focusing on the objectives and activities of the decisional unit and its members.41 The emphasis on the decisional unit reflects their view that answering the question “who becomes involved in a decision, how, and why is essential to an explanation of why
35 Richard C. Snyder, H.W. Bruck and Burton Sapin, “Decision-Making as an Approach to the Study of International Politics” in Richard C. Snyder, H.W. Bruck and Burton Sapin (eds), Foreign Policy Decision-Making. An Approach to the Study of International Politics, The Free Press of Glencoe, Glencoe, 1962, p. 86. 36 Ibid., p. 65. 37 Ibid., pp. 80-81. They outline different types of situations that decision makers confront on p. 81 of their book. 38 Ibid., pp. 65-74. 39 Ibid., p. 85. 40 Ibid., p. 86. 41 Ibid., pp. 92-96.
33 the decision-makers decided the way they did.”42 (Italics in original.) To order the analysis the actions of decision makers, and hence state behaviour, should be considered against three factors: spheres of competence, communication and information, and motivation.43 Spheres of competence refer to the actors’ role or patterns of action that contribute to the attainment of an organisation’s goal.44 Communication and information both inform and provide feedback on decision- making.45 And an understanding of decision makers’ motivation provides insight into why states behave as they do.46
Rosenau’s Pre-theory of Foreign Policy
The next major influence on theorising about foreign policy decision-making was a 1966 article by James Rosenau in which he articulated a pre-theory of foreign policy.47 By pre-theory Rosenau meant the “need to develop an explicit conception of where causation is located in international affairs” and as “both an early step toward explanation of specific empirical events and a general orientation toward all events.”48 An important stimulus was his observation that the largely historical and single-country case study orientation then prevalent in foreign policy research reflected the absence of both cross-national testable generalisations and a general theory of foreign policy. Most research was confined to either examining the external behaviour of a specific country at a certain time or identifying patterns of external behaviour over time.49 In this context, he urged the development of “if-then” propositions with which to conduct meaningful comparisons of the behaviour of countries. Rosenau stressed, however, that the comparative method was but one among a number for studying foreign policy. Accordingly, it was inappropriate to consider the comparative method to be of universal applicability and its strongest
42 Ibid., p. 98. 43 Ibid., p. 105. 44 Ibid., pp. 106-08. 45 Ibid., pp. 124. 46 Ibid., p. 137. 47 James N. Rosenau, “Pre-theories and Theories of Foreign Policy” in R. Barry Farrell (ed.), Approaches to Comparative and International Politics, Northwestern University Press, Evanston, 1966, pp. 27-92. 48 Ibid., p. 41. 49 Ibid., p. 35.
34 contribution lay in the generation and testing of hypotheses about foreign policy behaviour concerning two or more political systems.50
Two pillars buttress Rosenau’s pre-theory. First, a set of key variables to explain the external behaviour of societies which he labelled idiosyncratic, role, governmental, societal and systemic. The idiosyncratic variable refers to aspects unique to the foreign policy decision-maker such as their values, skills and prior experiences that distinguish their foreign policy choices or behaviour from counterparts. The second variable concerns the external behaviour of officials associated with their role, while those aspects of a government's structure that constrain or expand the foreign policy choices made by decision-makers fall within the third variable, governmental. Non-governmental aspects of a society that influence its external behaviour constitute the fourth variable, labelled societal. They include factors such as societal values, degree of national unity and extent of industrialisation. Finally, systemic variables encompass any non-human aspects of a society’s external environment or any actions occurring abroad that influence the decisions and actions of foreign policy officials. Geopolitical considerations and ideological challenges from potential aggressors are two examples cited by Rosenau.51
The second pillar is ranking the different variables in terms of their relative contribution to external behaviour. The objective is to provide a comparative estimate of the principal sources of behaviour rather than a precise accounting of the share of each variable.52
Integrating the two pillars produces a crude pre-theory of foreign policy. Specifically, the ranked five variables are examined in terms of distinctions between large and small countries (reflecting a country's size), between developed and underdeveloped economies (indicating level of economic development) and between
50 Rosenau, “Comparative Foreign Policy: One-Time Fad, Realized Fantasy, and Normal Field”, p. 12. 51 Rosenau, “Pre-theories and Theories of Foreign Policy”, p. 43. 52 Ibid., pp. 43-47.
35 open and closed political systems (reflecting political structure and accountability).53 In essence, Rosenau’s pre-theory suggests that explanations of foreign policy should be referenced against multilevel and multicausal factors.54
Allison’s Models of Decision-making
In 1971 Graham Allison published Essence of Decision, a seminal book outlining three models to explain America’s foreign policy decision-making during the 1962 Cuban missile crisis. He termed them the rational actor (Model I), organisational behaviour55 (Model II) and governmental (bureaucratic) politics (Model III)56.
In the Rational Actor model the basic unit of analysis is the actions chosen by the national government to maximise its strategic goals and objectives.57 The nation or government is considered a rational, unitary decision maker with “one set of preferences …, one set of perceived choices, and a single estimate of the consequences that follow from each alternative.”58 (Italicised emphasis in original.) As Allison and Zelikow note, two of the assumptions of classical realism, namely that unitary states are the main actors in international affairs and that states act rationally in selecting the course of action that is value-maximising, find resonance in the rational actor model.59
53 Ibid., pp. 47-48. 54 Hudson with Vore, “Foreign Policy Analysis Yesterday, Today, and Tomorrow”, p. 213. 55 In chapter 3 of the first edition of Essence of Decision, Graham Allison termed this model “Organizational Process” but in chapter 3 of the second edition he and co-author Philip Zelikow renamed it the “Organizational Behavior” model. The thesis adopts the terminology of the second edition, published as Graham T. Allison and Philip D. Zelikow, Essence of Decision. Explaining the Cuban Missile Crisis, Second Edition, Addison Wesley Longman Inc., New York, 1999. 56 Note that in a paper co-authored by Allison and Morton Halperin, Models II and III were merged and titled the bureaucratic politics model. See Graham T. Allison and Morton H. Halperin, “Bureaucratic Politics: A Paradigm and Some Policy Implications” in Raymond Tanter and Richard H. Ullman (eds), Theory and Policy in International Relations, Princeton University Press, Princeton, 1972, pp. 40-79. 57 Allison and Zelikow, Essence of Decision. Explaining the Cuban Missile Crisis, p. 24. 58 Ibid. 59 Ibid., p. 27.
36 The model assumes that a nation’s actions are in response to strategic threats and opportunities in the international environment.60 In selecting a response, a process of rational choice is employed based on identifying objectives and goals, usually expressed in terms of national security and national interests; proposing options for the attainment of the objectives; evaluating the cost and benefit of each option against the defined objectives; and selecting the option that ranks highest in achieving desired outcomes.61
Order, precision and logic are connoted by the rational actor model, giving it an appealing theoretical allure to explain the foreign policy decision-making process. As Allison notes, “the less information about the internal affairs of a nation or government, the greater the tendency to rely on the classical [or rational actor] model.”62
The second model, Organisational Behaviour, considers the basic unit of analysis is governmental action.63 The focus is on the “outputs of large organizations functioning according to standard patterns of behavior”,64 recognising that:
[a]t any given time, a government consists of existing organizations, each with a fixed set of standard operating procedures and programs. The behavior of these organizations – and consequently of the government – relevant to an issue in any particular instance is, therefore, determined primarily by routines established prior to that instance. Explanation of a government action starts from this base line, noting incremental deviations.65
Allison and Zelikow identify seven characteristics of this model. First, the actor is not a monolithic nation or government but rather a collective of bureaucratic organisations, atop of which sit government leaders. They may also be sub-units within large organisations with their own set of procedures and rules.66 Second, parts
60 Ibid., p. 24 61 Ibid. 62 Allison, Essence of Decision, p. 24 63 Allison and Zelikow, Essence of Decision. Explaining the Cuban Missile Crisis, p. 164. 64 Ibid., p. 143. 65 Ibid., p. 144. 66 Ibid., p.166.
37 of a foreign policy issue may be distributed among different bureaucratic organisations in accordance with their respective specialisation, a process termed “factored problems and fractionated power”.67 While specialist attention is devoted to particular aspects of an issue, the trade-off is that there is little control over “what an organization attends to, and how organizational responses are programmed.”68 (Italicised emphasis in original.)
Defining “organizational missions” articulated, for example, through a mission statement or charter is the third characteristic.69 The fourth is the set of beliefs about how a mission should be carried out and the requirements necessary to do so.70 “Action as Organizational Output’ is the fifth characteristic, based on the view that organisational activity is reflective of pre-set routines.71 Successful performance is defined by compliance with established targets and constraints, whether expressed in quantitative or procedural terms.72 Reliance is placed on standard operating procedures and pre-set routines to ensure that individual contributions to tasks are co-ordinated and result in a coherent response.73 The sixth characteristic is central co-ordination and control.74 However, tension may arise related to the desire on the one hand to decentralise responsibility and power and, on the other, to maintain central co-ordination over the relevant government agencies.75 The last characteristic is related to the political arena, where leaders may change governmental behaviour by deciding “what organizations will play out which programs where.”76
Governmental (Bureaucratic) Politics is the final model. Here, an organisation’s leaders are themselves players in a competitive game.77 Specifically:
67 Ibid., p. 166-67. 68 Ibid., p. 167. 69 Ibid. 70 Ibid. 71 Ibid. 72 Ibid. 73 Ibid., pp. 169-70 74 Ibid., p. 172. 75 Ibid., pp. 172-73. 76 Ibid., p. 174. 77 Ibid., p. 255.
38 [t]he name of the game is politics: bargaining along regular circuits among players positioned hierarchically within the government. Governmental behavior can thus be understood according to a third conceptual model, not as organizational outputs but as results of bargaining games. Outcomes are formed, and deformed, by the interaction of competing preferences. In contrast with Model I [rational actor] the Governmental Politics model sees no unitary actor but rather many actors as players: players who focus not on a single strategic issue but on many diverse intranational problems as well; players who act in terms of no consistent set of strategic objectives but rather according to various conceptions of national, organizational, and personal goals; players who make government decisions not by a single, rational choice but by the pulling and hauling that is politics.78
The basic unit of analysis is “governmental action as political resultant”79 such that “national behavior in international affairs can be conceived of as something that emerges from intricate and subtle, simultaneous, overlapping, and often deadly serious games among players located in positions in a government.”80 In carrying out their tasks, however, individual players are susceptible to a range of influences beyond those defined by position. They include personal traits and interests and political debts, organisational parochialism, domestic political interests, conception of the national interest, deadlines for decision and action and the specific institutional “lens” through which an issue is viewed.81
Allison proposed that it was possible to predict the stance of a particular player based on the bureaucratic position they occupied.82 Capturing this proposition is his phrase: “Where you stand depends on where you sit.”83 Responding to his critics, in the second edition of Essence of Decision Allison and co-author Philip Zelikow defended the proposition but clarified the term “depends” as meaning “is substantially affected by”.84 Nonetheless, this clarification does not satisfactorily address Stephen Krasner’s observation that sometimes decision makers do not sit
78 Ibid. 79 Ibid., p. 294. 80 Ibid., p. 295. 81 Ibid., pp. 297-300. 82 Allison, Essence of Decision, p. 176. 83 Ibid. 84 Allison and Zelikow, Essence of Decision. Explaining the Cuban Missile Crisis, p. 307.
39 anywhere because they are outside the bureaucracy and are present only by invitation, with no bureaucratic position to defend.85
In seeking to maximise their impact in the game of bureaucratic politics each player seeks not only to pick winners in terms of issues meriting an investment of time, effort and reputation but also to enhance their standing by aligning their position with “action-channels”.86 As defined by Allison and Zelikow, an action- channel “is a regularized means of taking governmental action on a specific kind of issue.”87 The significance of action-channels is that they:
structure the game by preselecting the major players, determining their usual points of entrance into the game, and distributing particular advantages and disadvantages for each game. Most critically, channels determine “who’s got the action” – that is, which department’s Indians actually do whatever is decided upon.88
Allison and Zelikow suggest that each player marshals the various levers at their disposal to promote their conception of national, organisational, group and personal interests in government decisions and actions.89 “Victory” may be ephemeral, however, because decisions can be reversed, ignored or their implementation delayed.90
2.3 Limitations of the Approaches
Each of the approaches reviewed has limitations. While the Snyder, Bruck and Sapin model provides a framework for analysing the foreign policy of a country,91 it does not specify how the variables relate to each other and their relative
85 Stephen D. Krasner, “Are Bureaucracies Important? (Or Allison Wonderland)”, Foreign Policy 7, 1972, p. 165. 86 Allison and Zelikow, Essence of Decision. Explaining the Cuban Missile Crisis, p. 300. 87 Ibid. 88 Ibid., p. 301. 89 Ibid., p. 302. 90 Ibid., pp. 303-04. 91 Gerner, “The Evolution of the Study of Foreign Policy”, p. 19.
40 importance.92 Rosenau’s pre-theory is data intensive and focuses on the extremes of each pole: large and small countries, developed and underdeveloped economies, open and closed political systems. Time series data are not always available for countries of interest, nor may it have been collected initially for the purpose which the foreign policy analyst uses it.93 The pre-theory does not capture the spectrum of possible cases, for example newly industrialising economies such as Taiwan, semi- democracies such as Malaysia and middle-sized countries. More broadly, by labelling it a “pre-theory” the implication was that a comprehensive theory would follow. By the 1980s it was clear this was not to be the case.
Allison’s models have been widely criticised, although they continue to structure analysis of foreign, defence and other public policy decision-making processes.94 Kegley and Wittkopf suggest the rational actor model is deficient in recognising an impending problem because of neglect about or denial of its existence until direct evidence or a crisis precipitate a response. Also it implies decisions are based on no, partial or obsolete information or, conversely, too much information or contradictory information. Other problems they identify include trade-offs in prioritising different national interests; time constraints that restrict the identification and analysis of alternative courses of action; ‘satisficing’ behaviour; and psychological restraints related to the decision maker’s personality or emotional needs or passions that may blur the distinction between advancing personal goals and the national good.95 Jonathan Bendor and Thomas Hammond suggest the attributes ascribed to decision-maker(s) in the rational actor model are simplistic and ignore the
92 Deborah J. Gerner, “Foreign Policy Analysis: Renaissance, Routine, or Rubbish?” in William Crotty (ed.), Political Science: Looking to the Future, Volume 2 (Comparative Politics, Policy, and International Relations), Northwestern University Press, Evanston, 1991, p. 135. 93 One group of scholars note “CFP [Comparative Foreign Policy] researchers became captive of data sets that in many instances were collected or compiled by comparativists and others outside the field of foreign policy. They used what they found -- aggregate data on national attributes -- rather than collect data on variables suggested by their own typologies.” James A. Caporaso, Charles F. Hermann, Charles W. Kegley, Jr., James N. Rosenau and Dina A. Zinnes, “The Comparative Study of Foreign Policy: Perspectives on the Future”, International Studies Notes 13(2), 1987, p. 36. 94 For example the bureaucratic politics model underpins analysis in Lauren Holland, “The U.S. Decision to launch Operation Desert Storm: A bureaucratic politics analysis”, Armed Forces and Society 25(2), 1999, pp. 219-42; Paul T. Mitchell, “Ideas, interests and strategy: Bureaucratic politics and the United States Navy”, Armed Forces and Society 25(2), 1999, pp. 243-65; George A. Krause, “Federal Reserve policy decision making: political and bureaucratic influences”, American Journal of Political Science 38(1), 1994, pp. 124-44. 95 Kegley and Wittkopf, American Foreign Policy. Pattern and Process, pp. 457-463.
41 role of strategic interactions.96 Rather than having one goal rational actors may have several.97 In addition, uncertainty and decision makers’ attitude to risk are not considered.98 And there is no discussion of how a rational actor could use non- cooperative game theory to examine how other nations might respond to actions taken against it.99
Morton Halperin suggests ‘organisational capture’ may occur under the organisational behaviour model, in which an agency’s support of or opposition to an issue or policy is associated with perceptions of whether its influence will be enhanced or reduced.100 He also suggests it cannot be assumed that an organisation’s mission and capabilities, which he termed the “organization’s essence”,101 is coherently defined. Moreover, disagreement about roles and missions between branches of the same organisation or different agencies may arise when it affects their respective organisational essence.102 Bendor and Hammond reject Allison’s view that standard operating procedures constrict behaviour so that it becomes simple and predictable.103 In their view this underestimates the complex behaviour that can arise.104
In relation to the governmental (bureaucratic) politics model, Bendor and Hammond disagree with Allison’s view that policymaking necessarily proceeds by a process of bargaining. In their view, countervailing factors include agreement by officials on policy ends but not means105 and information asymmetries between officials and the decision maker that shape what problems the latter is aware of, the advice given and the implementation of decisions.106 They also suggest the model
96 Jonathan Bendor and Thomas H. Hammond, “Rethinking Allison’s Models”, American Political Science Review 86(2), 1992, p. 305. 97 Ibid., pp. 305-06. 98 Ibid. Note, however, their qualification that theoretical insight into decision makers’ attitude to risk post-dates the publication of Essence of Decision. 99 Ibid., p. 307. 100 Morton H. Halperin, Bureaucratic Politics and Foreign Policy, The Brookings Institution, Washington D.C., 1974, pp. 27-28. 101 Ibid., p. 28. 102 Ibid., p. 40. 103 Bendor and Hammond, “Rethinking Allison’s Models”, p. 309. 104 Ibid. 105 Ibid., p. 314. 106 Ibid., p. 316.
42 largely ignores the effect of hierarchy in decision-making.107 Yet, in their view, the formal structure of an organisation has implications for the decision-making process and the policies adopted.108 Imprecision about the model’s propositions is their third criticism.109 They suggest some of the propositions are not based in the model but appear to be ad hoc generalisations.110 Their final criticism relates to the model’s complexity, producing an “analytical kitchen sink”111 that limits the derivation of meaningful propositions.112
Desmond Ball argues that Allison’s “governmental arena” is overly restrictive since it does not take into account influential elements outside the bureaucracy, such as electoral constraints and Congress113, or government, such as industrial interests, pressure groups or the press.114 He also suggests that Allison’s and Halperin’s work on bureaucratic politics is somewhat ‘old wine in new bottles’ although “more specifically delimited and more formalized than that of their predecessors.”115 In his view, however, these gains have resulted in an analytical tool that is “far too restrictive”.116
David Welch joins with this criticism, arguing that a major problem centres on the hypothesised link between a player’s bureaucratic position and their preferences.117 Welch notes that “[i]t is not clear …whether, or on what issues, we should expect bureaucratic position to be determinative”118 since both anecdotal and
107 Ibid., p. 314 and pp. 316-17. 108 Ibid., p. 317. 109 Ibid., p. 314 and p. 317. 110 Ibid., p. 317. 111 Ibid., p. 318. 112 Ibid., p. 319. 113 Desmond Ball, “The Blind Men and the Elephant: A Critique of Bureaucratic Politics Theory”, Australian Outlook 28(1), 1974, p. 79. 114 Ibid., p. 84. Bendor and Hammond make a similar point as does Timothy McKeown. See Bendor and Hammond, “Rethinking Allison’s Models”, pp. 315-16; Timothy J. McKeown, “The Cuban Missile Crisis and Politics as Usual”, The Journal of Politics 62(1), 2000, p. 72 and p. 84. 115 Ball, “The Blind Men and the Elephant”, p. 84. 116 Ibid. A proposal to convert bureaucratic politics into a broader, participatory and competitive approach to foreign policy making is contained in Alexander L. George, “The Case for Multiple Advocacy in Making Foreign Policy”, The American Political Science Review 66(3), 1972, pp. 751- 85. 117 David A. Welch, “The Organizational Process and Bureaucratic Politics Paradigms. Retrospect and Prospect”, International Security 17(2), 1992, p. 120. 118 Ibid., p. 121.
43 case study evidence is inconclusive.119 He also questions the role of a player’s power in defining the relationship between bureaucratic position and influence in the decision-making process.120 In particular, he contests Allison’s contention that a player’s power rests on, inter alia, bargaining advantages and their skill and willingness to use these advantages. Rather, Welch argues that these aspects are idiosyncratic and not necessarily related to bureaucratic position.121
Jerel Rosati challenges the bureaucratic politics model’s assumption that a simple linear relationship links decision structure, decision process and foreign policy behaviour.122 He suggests that foreign policy behaviour cannot be explained by focusing just on the decision-making structure and decision process. The analysis should be expanded to encompass the decision context, such as the influence of external environmental factors and whether an issue is assessed as critical or routine, and the “beliefs, personalities, and modes of thinking” of decision participants.123
2.4 The Decision Units Approach
A deficiency common to all the approaches reviewed so far is their inability to differentiate core actors in the foreign policy decision-making process from peripheral ones. This infuses the analysis with ‘noise’. In this study noise minimisation occurs by reference to the decision units approach advanced by Margaret and Charles Hermann, and Joe Hagan.
The decision units approach targets those actors “at the apex of foreign policy decision-making in all governments or ruling parties.”124 This narrows the field of inquiry to those in government who exercise ultimate decision-making power and authority on a specific foreign policy issue, a more practicable approach compared to
119 Ibid., pp. 129-131. 120 Ibid., p. 122. 121 Ibid. 122 Jerel A. Rosati, “Developing a Systematic Decision-making Framework: Bureaucratic Politics in Perspective”, World Politics 33(2), 1981, p. 249. 123 Ibid., p. 251. 124 Margaret G. Hermann, Charles F. Hermann and Joe D. Hagan, “How Decision Units Shape Foreign Policy Behavior” in Charles F. Hermann, Charles W. Kegley, Jr. and James N. Rosenau (eds), New Directions in the Study of Foreign Policy, Allen and Unwin, Boston, 1987, p. 311.
44 trying to identify the universe of participating actors. As Hermann, Hermann and Hagan state:
[a]lthough we recognize that numerous domestic and international factors can and do influence foreign policy behavior, these influences must be channeled through the political apparatus of a government which identifies, decides and implements foreign policy. Within that apparatus is a set of authorities with the ability to commit the resources of the society and, with respect to a particular problem, with the authority to make a decision that cannot be readily reversed. We call this set of authorities the “ultimate decision unit,” even though in reality the unit may consist of multiple separate bodies rather than a single entity. It is our contention that the structure and dynamics of such an ultimate decision unit shape the substance of foreign policy behavior.125 (Italicised emphasis added.)
The level at which the decision unit is located can change depending on the issue and across time.126 A matter critical to the state will involve the highest political authorities as part of the decision unit whereas for routine matters this unit will be at a much lower level. However, no matter at which level the decision unit is located “eventually for most foreign policy problems, some person or persons finally authorizes a decision and they constitute for that issue the ultimate decision unit.”127
Hermann, Hermann and Hagan identify three types of decision unit: the predominant leader, the single group and multiple autonomous actors.128 Each is described below. They contend that “one type is applicable in any given foreign policy case”129 and that “[i]n cases of foreign policy decision-making, the actors who can make authoritative decisions for the government should correspond to one of these three configurations.”130 This proposition is examined here for four case studies of the Spratly Islands dispute.
125 Ibid., p. 309. 126 Ibid., p. 312. 127 Ibid., p. 311. 128 Ibid., pp. 311-12. 129 Ibid., p. 311. 130 Ibid., p. 312.
45 The contribution of the decision units approach relates to four areas. First, it enables a cross-national analysis of foreign policy decision-makers.131 Second, it is applicable to different types of political regimes132 and by implication dissimilar foreign policy decision-making processes. Third, it provides a means for focusing on the key actors within a government involved in foreign policy making.133 Lastly, it facilitates the comparison and contrast between different types of decision units.134 The combination of these factors “makes the decision unit a more accessible unit of analysis” in the study of comparative foreign policy.135
These considerations are all relevant to this thesis. Cross-national analysis of who makes foreign policy decisions on the Spratlys dispute and how this shapes foreign policy behaviour is a gap in the literature. The approach’s applicability to different regime types is advantageous because three distinct political systems are represented in the study: presidential in the Philippines, democratic (or more accurately, semi-democratic) in Malaysia and authoritarian in China. A further factor is that in a dispute as complex and sensitive as the Spratlys there are numerous domestic actors in each country providing advice. Grouping the actors into one of three types of decision unit provides a practical ordering device.
Predominant Leader
The role of individuals in international relations is contested. Daniel Byman and Kenneth Pollack note one view arguing that individuals do not matter, or are largely inconsequential, in international politics because of the greater importance of the international system, domestic politics and institutional interactions.136 Adherents of this view suggest it is too difficult to generalise from the actions of individuals, so that analysis of this unit yields little of theoretical value.137 Accordingly, “the analyst
131 Ibid., p. 335. 132 Ibid. 133 Ibid. 134 Ibid. 135 Ibid., p. 335. 136 Daniel L. Byman and Kenneth M. Pollack, “Let Us Now Praise Great Men. Bringing the Statesman Back In”, International Security 25(4), 2001, p. 108. 137 Ibid.
46 does not need to know anything about the leaders of a state; they will behave the same no matter who they are.”138
A counter view is that leaders do matter in foreign affairs.139 Not only do their personalities differ,140 making an assumption of homogeneity in behaviour problematic, but also their motivations and interest in international affairs varies. In this context:
the goals, abilities, and foibles of individuals are crucial to the intentions, capabilities, and strategies of a state. Indeed, individuals not only affect the actions of their own states but also shape the reactions of other nations, which must respond to the aspirations, abilities, and aggressiveness of foreign leaders.141
In addition, leaders serve as a bridge between officials and the public.142 Through their words and actions leaders both shape and respond to public opinion, influencing the form and content of foreign policy.143 In the world of international politics, Michael Mazarr suggests leadership rests on several pillars: defining a vision of the future shared by others, building trust with followers and partners and empowering stakeholders.144
By using a decision units approach that explicitly includes leaders as one of its analytical elements, I join with those who argue that individuals matter in international relations. A decision unit based on a predominant leader is a single individual who exercises:
138 Roger Hilsman with Laura Gaughran and Patricia A. Weitsman, The Politics of Policy Making in Defense and Foreign Affairs. Conceptual Models and Bureaucratic Politics, Third Edition, Prentice- Hall Inc., Englewood Cliffs, 1993, p. 51. 139 Byman and Pollack, “Let Us Now Praise Great Men”, pp. 114-133; Giacomo Chiozza and Ajin Choi, “Guess Who Did What. Political Leaders and the Management of Territorial Disputes, 1950- 1990”, Journal of Conflict Resolution 47(3), 2003, p. 253; Margaret G. Hermann and Joe D. Hagan, “International Decision Making: Leadership Matters”, Foreign Policy 110, 1998, pp. 124-37. 140 Byman and Pollack, “Let Us Now Praise Great Men”, p. 112. 141 Ibid., p. 109. 142 James N. Rosenau, National Leadership and Foreign Policy. A Case Study in the Mobilization of Public Support, Princeton University Press, Princeton, 1963, p. 17. 143 Ibid. 144 Michael J. Mazarr, “Acting Like a Leader”, Survival 44(4), 2002-03, pp. 110-14.
47 the authority to commit the resources of a nation in response to a particular problem and others cannot reverse his or her decision … In effect, the leader has the power to make the choice concerning how the government is going to respond to the problem.145
Personal characteristics of the predominant leader assume high importance because they shape his instincts about an issue and his ‘style’ in evaluating advisors’ inputs, reacting to information from the external environment and assessing the political risks of different actions.146 In understanding a predominant leader’s reaction to a foreign policy issue, knowledge about his orientation to international affairs provides insight into how he perceives governments should act on foreign policy matters and how he views the position and role of his own nation and of other states in the world.147
Hermann, Hermann and Hagan argue that the extent to which a predominant leader’s personality is important in a nation’s foreign policy behaviour relates to their sensitivity148 to information from the political environment149. If a leader has a well defined world-view and uses it as a basis to filter and interpret information from the external environment he will tend to look:
for cues that confirm his beliefs when making foreign policy decisions. As a result, he will be relatively insensitive to discrepant advice and data…. In effect, the leader selectively uses incoming information to support his predispositions.150
145 Margaret G. Hermann, “Leaders and Foreign Policy Decision-making”, p. 79. 146 Margaret G. Hermann, 1978 and 1984 cited in Hermann, Hermann and Hagan, “How Decision Units Shape Foreign Policy Behavior”, p. 313. See also Juliet Kaarbo, “Linking Leadership Style to Policy: How Prime Ministers Influence the Decision-Making Process” in Ofer Feldman and Linda O. Valenty (eds), Profiling Political Leaders. Cross-Cultural Studies of Personality and Behavior, Praeger, Westport, 2001, pp. 81-96. 147 Hermann, Hermann and Hagan, “How Decision Units Shape Foreign Policy Behavior”, p. 313. 148 As Hermann, Hermann and Hagan note, the terms “sensitive” and “insensitive” are relative and in reality a leader’s sensitivity to information from the external environment may range along a continuum depending on the particular foreign policy issue, level of personal interest in and expertise about a problem. See ibid., p. 314 and footnote 1 on pp. 335-36 of their article. 149 Ibid., p. 314. 150 Ibid.
48 Such leaders tend to be personality-driven, drawing on their attitudes, beliefs, motives and experiences.151 They have difficulty in changing their attitudes and beliefs, and shifts tend to be marginal rather than major in scale.152 Their “decisions are determined by schemas or images that are elicited by the problem.”153 On the other hand the more sensitive a predominant leader is to contextual influences, the greater the requirement to understand the situation to predict a government’s foreign policy behaviour.154 Because such leaders consider themselves pragmatic and flexible they tend to be situation-driven and “tailor their behavior to fit the demands of the situation, to ascertain where others stand with regard to a problem and consider how other governments are likely to act before making a decision.”155 Timing is critical to these leaders and they scan their environment for indicators about a propitious time politically to launch an action.156
By determining a predominant leader’s sensitivity to contextual information we have a clue about where to focus attention to explain a government’s action.157 As Margaret Hermann notes “[i]t is the starting point for differentiating among predominant leaders and the processes they use in responding to foreign policy problems.”158
Hermann identifies seven characteristics that shape political leadership and which provide insight into how a leader will act.159 The first is core political beliefs, which influence how political leaders view the political environment and their definition of strategies to achieve desired goals.160 To gain insight into leaders’ core beliefs some scholars have used the concept of operational code, which evaluates philosophical and instrumental (that is, the relationship between political ends and
151 Margaret G. Hermann, “Leaders and Foreign Policy Decision-making”, p. 81. 152 Ibid. 153 Ibid., p. 91. 154 Ibid., p. 81. 155 Ibid., p. 82. 156 Ibid., p. 91. 157 Ibid., p. 83 158 Ibid., p. 84. 159 Margaret G. Hermann, “Ingredients of Leadership” in Margaret G. Hermann (ed.), Political Psychology, Jossey-Bass Publishers, San Francisco, 1986, pp.173-80. 160 Ibid., p. 174.
49 means) influences in shaping foreign policy decision-making behaviour.161 Robert Axelrod examines leaders’ beliefs through cognitive mapping. He defines this as “a specific way of representing a person’s assertions about some limited domain, such as a policy problem. It is designed to capture the structure of the person’s causal assertions and to generate the consequences that follow from this structure.”162 By providing policy makers with tools to examine their own reasoning Axelrod sought to avoid them unnecessarily simplifying complex decision situations.163 He recognised the possibility, however, that a decision maker might revert to the familiarity of a simplified structure of the environment and seek to act rationally within this context.164 Holsti165 and Young and Schafer166 have identified other difficulties of this approach.
Other scholars have focused on motivational factors related to “personal needs for achievement, affiliation, or power”.167 Divergent views exist concerning the utility of analysing motivation. On the one hand, the Classical Realist Hans Morgenthau contends that trying to understand foreign policy by focusing on the motivations of leaders is “both futile and deceptive”.168 On the other hand, while Richard Cottam concurs that focusing on individual motivation is generally unhelpful169 he goes on to argue that in the case of primary decision makers they:
161 Ibid. See also Alexander L. George, “The “Operational Code”: A Neglected Approach to the Study of Political Leaders and Decision-Making”, International Studies Quarterly 13(2), 1969, pp. 190-222; Nathan Leites, The Operational Code of the Politburo, McGraw-Hill, New York, 1951. A recent review of the approach is contained in Michael D. Young and Mark Schafer, “Is There Method in Our Madness? Ways of Assessing Cognition in International Relations”, Mershon International Studies Review 42 (Supplement 1), 1998, pp. 69-74. 162 Robert Axelrod (ed.), Structure of Decision. The Cognitive Maps of Political Elites, Princeton University Press, Princeton, 1976, p. 55. 163 Young and Schafer, “Is There Method in Our Madness?”, p. 75. 164 Axelrod, Structure of Decision, pp. 243-44. 165 Ole Holsti, “Foreign Policy Formation Viewed Cognitively” in Robert Axelrod (ed.), Structure of Decision. The Cognitive Maps of Political Elites, Princeton University Press, Princeton, 1976, pp. 18- 54. 166 Young and Schafer, “Is There Method in Our Madness?”, p. 78. 167 David G. Winter and Abigail J. Stewart, “Content Analysis as a Technique for Assessing Political Leaders” in Margaret G. Hermann (ed.), A Psychological Examination of Political Leaders, The Free Press, New York, 1977, pp. 44-48 cited in Stephen G. Walker, “The Motivational Foundations of Political Belief Systems: A Re-Analysis of the Operational Code Construct”, International Studies Quarterly 27(2), 1983, p. 180. See also Walker’s citation on p. 179 of his article concerning works about psychological motivations in the foreign policy behaviour of leaders. 168 Hans J. Morganthau, Politics Among Nations. The Struggle for Power and Peace, Fifth Edition, Revised, Alfred A. Knopf, New York, 1978, p. 6. 169 Richard W. Cottam, Foreign Policy Motivation. A General Theory and a Case Study, University of Pittsburgh Press, Philadelphia, 1977, pp. 31-32 and p. 320.
50 are far too important to be treated as manifestations of their role. They are the individuals who define the situation, and the manner in which they do so will determine the choice alternatives they can perceive.170
In Cottam’s view, to understand motivations the analyst must identify who is involved in the foreign policy decision process, their words and actions.171 The influence of the “decisional environment” must also be taken into account, that is, the sense of threat or opportunity and the extent of general interest in a particular issue.172
Margaret Hermann raises a different issue in noting that understanding what a leader believes yields only partial insight because it is also necessary to consider the extent to which those beliefs are upheld.173 The rigidity or flexibility of a leader’s beliefs affects his position on policy goals and strategies because:
[l]ike the crusader of old, the leader with strong political beliefs seeks to convince others of his position and is likely to see much of what is happening politically as relevant to his cause. Leaders whose views are less firmly entrenched are more pragmatic. The particular situation will generally determine how firmly – and whether – such leaders press their case.174
A leader’s political style is the second characteristic that Hermann identifies. This relates to, inter alia, the leader’s preference in interacting with others (personal diplomacy, working through intermediaries), his work style (interest in details or only general information) and his manner of communicating.175 Two implications flow from a leader’s political style. First, associates adapt to his style in order to maintain access. Second, the leader tends to appoint advisers who are like-minded.176 Paul Kowert demonstrates from his analysis of the Eisenhower and Reagan
170 Ibid., p. 320. 171 Ibid., p. 54. 172 Ibid., pp. 54-55. 173 Margaret G. Hermann, “Ingredients of Leadership”, p. 174. 174 Ibid. 175 Ibid., pp. 174-75. 176 Ibid., p. 175.
51 administrations, however, that an adaptive learning environment can be fostered between leaders and their staff, with implications for policy making.177
The motivation for seeking the top leadership position is the third characteristic in Margaret Hermann’s list.178 Motives include a desire for power, a specific cause, a sense of obligation, a need for approval, the challenge of the position, status and recognition. All affect how leaders act.179 A leader’s reaction to stress and pressure is the fourth characteristic.180 In stressful situations some leaders rise to the occasion, others experience distress and yet others ‘freeze’.181 As she notes, “[a]ll these responses have implications for the leadership that the individual leader will provide.”182
The last three characteristics are the process of recruitment into a political leadership post, the leader’s previous political experience and the political climate at the time he began.183 They relate to issues of whether a leader acquired his position through sponsorship by a patron, advancement through the ranks or co-option; the similarity of the present position to previous ones held, the length of tenure as leader; and the events and lessons that shaped the leader’s political socialisation.184
In itself an understanding of a leader’s characteristics is insufficient to explain a government’s behaviour. Context and constituencies are also important. The context in which a leader operates defines the boundaries within which he and his followers operate.185 Important contextual variables include the presence and content of formal rules for decision-making, the extent of accountability to constituents, the degree and form of opposition, the existence of any common political views, the resources accessible by the leader, the preferred style of
177 Paul A. Kowert, Groupthink or deadlock: when do leaders learn from their advisors?, State University of New York Press, Albany, 2002. 178 Margaret G. Hermann, “Ingredients of Leadership”, p. 175. 179 Ibid. 180 Ibid., pp. 176-77. 181 Ibid., p. 176. 182 Ibid. 183 Ibid., pp. 177-79. 184 Ibid., pp. 178-79. 185 Ibid., p. 170.
52 interaction between the leader and the led and the general tone of the times (stability, turbulence, resource-rich or poor).186 Through these factors:
context begins to define the parameters within which political leadership can take place. The context indicates which constituents the leader will want to pay attention to and delimits any constraints on how the leader can interact with those he is trying to lead. Moreover, the context puts bounds on the procedures/processes the leader can use in engaging in leadership. In effect, the context determines how effective political leadership will be defined and by whom.187
An understanding of a leader’s different constituencies illuminates to whom he must be responsive and why, and the demands, expectations and images that influence his behaviour.188 This also informs two other areas. First, potential sources of support for and opposition to a political leader and the extent to which they might be mobilised.189 Second, which specific groups or individuals among the different constituencies the leader is most dependent to retain his position.190 (See also the section below on multiple autonomous actors.) David Brown suggests, for example, that political stability is generated by elite cohesion, requiring leaders to be attentive to a range of relationships spanning organisational and ideological ties and to modify strategies “in the context of ever-changing threats to their nation, their regime, and their individual power.”191
Single Group
Even when one person has the authority to commit a government’s resources to a foreign policy issue, he or she may nonetheless seek to involve others in the decision-making process.192 The motivations for doing so relate to three factors.
186 Ibid., pp. 170-73. 187 Ibid., p. 173. 188 Ibid., p. 180. 189 Ibid., p. 181. 190 Ibid. 191 David Brown, “The Search for Élite Cohesion”, Contemporary Southeast Asia 15(1), 1993, p. 112. 192 Fritz Gaenslen, “Decision-Making Groups” in Eric Singer and Valerie Hudson (eds), Political Psychology and Foreign Policy, Westview Press, Boulder and Oxford, 1992, p. 165.
53 First, it can help strengthen a decision’s legitimacy.193 Political leaders can then argue that their decision is based not only on expert advice but also that the views of selected representatives of the governed have been drawn upon in the policy making process.194 Second, the involvement of others can help lower the psychological strain of decision-making.195 In particular, by sharing the burden of a policy environment characterised by complexity, uncertainty, ambiguity and incomplete information.196 The third factor is empirical evidence suggesting that foreign policy decision-making is frequently a group activity.197 For example, in analysing responses from area and country specialists about who made foreign policy decisions in 25 nations between 1959 and 1968, Hermann and Hermann concluded that in 13 of these countries (52%) a single group was the ultimate decision unit while in another four states (16%) it was the multiple autonomous actor category.198
In a decision unit based on a single group “all the individuals necessary for allocation decisions participate in the group and the group makes decisions through an interactive process among its members.”199 It is not necessary that the single group be established legally or formally; of greater import is that the group “must have, in practice, the de facto ability to commit or withhold resources without another [decision] unit engaging in the reversal of its decision at will.”200
The promptness with which the group can reach consensus on a foreign policy problem is the cornerstone to understanding a government’s behaviour under this type of decision unit.201 Factors that facilitate consensus include information derived from a single source, its sharing among the group and its common interpretation by members.202 In addition, the group’s membership should be small,
193 Ibid. 194 Ibid., pp. 165-66. 195 Ibid., p. 166. 196 Ibid. 197 Ibid. 198 Margaret G. Hermann and Charles F. Hermann, “Who Makes Foreign Policy Decisions and How: An Empirical Inquiry”, International Studies Quarterly 33(4), 1989, p. 372 and Table 2 on pp. 374- 75. 199 Hermann, Hermann and Hagan, “How Decision Units Shape Foreign Policy Behavior”, p. 315. 200 Ibid. 201 Ibid., p. 316. 202 Ibid.
54 the over-riding loyalty of members should be to the group and there should be a strong but not predominant leader.203 When quick consensus is reached, understanding the group’s internal dynamics provides clues about its likely handling of a particular foreign policy problem.204 Exclusiveness, mutual reinforcement of members’ position and confidence in the collective decision205 mean that “[a]s discussion continues, participants express less qualification and more unequivocal declaration in support of the recommended means of treating the issue.”206 In this situation, influences outside the group have little effect because the members have no need to search elsewhere for support or advice for their position.207
When consensus is difficult to achieve the effect of influences outside the group can increase in importance.208 “Members of the group become attuned to outside political pressures as they seek supporting information for their positions, reinterpretation of the problem, or ways to resolve the conflict.”209 Analytical interest then concentrates on understanding factors in the broader environment that could be invoked to help build consensus in foreign policy making or which may impact on this process.210
How malleable is a group in reaching consensus? Several scholars have examined the implications of group dynamics in foreign policy decision-making in terms of process and structure.211 One analytical approach focuses on what Irving Janis termed “groupthink”. In his view:
203 Ibid. 204 Ibid. 205 Ibid. 206 Ibid., p. 321. 207 Ibid., p. 315. 208 Ibid., p. 315. 209 Ibid. 210 Ibid., p. 316. 211 See for example, Gaenslen, “Decision-Making Groups”, pp. 165-93; Mark Schafer and Scott Crichlow, “The Process-Outcome Connection in Foreign Policy Decision Making: A Quantitative Study Building on Groupthink”, International Studies Quarterly 46(1), 2002, pp. 45-68; Zeev Maoz, “Framing the National Interest. The Manipulation of Foreign Policy Decisions in Group Settings”, World Politics 43(1), 1990, pp. 77-110; Paul ’t Hart, Groupthink in Government: A Study of Small Groups and Policy Failure, Swets and Zeitlinger, Amsterdam, 1990; Irving L. Janis, Groupthink. Psychological Studies of Policy Decisions and Fiascoes, Second Edition, Houghton Mifflin Co., Boston, 1982; Andrew K. Semmel, “Small Group Dynamics in Foreign Policymaking” in Gerald Hopple (ed.), Biopolitics, Political Psychology and International Politics, St. Martin’s Press, New York, 1982, pp. 94-113; Irving L. Janis, Victims of Groupthink: A Psychological Study of Foreign- Policy Decisions and Fiascoes, Houghton Mifflin Co., Boston, 1972.
55 [t]he concept of groupthink pinpoints an entirely different source of trouble, residing neither in the individual nor in the organizational setting. Over and beyond all the familiar sources of human error is a powerful source of defective judgment that arises in cohesive groups – the concurrence-seeking tendency, which fosters overoptimism, lack of vigilance, and sloganistic thinking about the weakness and immorality of out-groups. This tendency can take its toll even when decision-makers are conscientious statesmen trying to make the best possible decisions for their country and for all mankind.212
Janis defined groupthink as:
a mode of thinking that people engage in when they are deeply involved in a cohesive in-group, when the members’ strivings for unanimity override their motivation to realistically appraise alternative courses of action. … Groupthink refers to a deterioration of mental efficiency, reality testing, and moral judgment that results from in-group pressures.213
Decision-making impacted by groupthink suffers from seven problems in Janis’ view.214 The first relates to a limited search by the group of alternative courses of action. Second, the group fails to analyse the objectives to be met and the values associated with the choice. The third deficiency is neglecting to revisit the course of action initially favoured by most group members to examine risks and weaknesses that may have been overlooked. This relates also to the fourth problem, a failure to re-examine the costs and benefits of courses of action previously rejected. The next problem is making little or no effort to elicit expert advice about the alternatives identified. Selective bias in reacting to information and comments is the sixth defect. Favourable treatment is given to facts and opinions that support the group’s preferred decision while contrary views are ignored. The final defect is a lack of a contingency plan in the event that the decision is obstructed by political, bureaucratic or other barriers.
212 Janis, “Groupthink. Psychological Studies of Policy Decisions and Fiascoes”, p. 12. 213 Ibid., p. 9. 214 Ibid., p. 10.
56 Janis identifies eight symptoms of groupthink.215 They are an illusion of invulnerability among most or all members of the group; an unquestioned belief in the group’s inherent morality; collective efforts to rationalise decisions; stereotyped views of opponent leaders as evil or weak or stupid; self-censorship of drift from the apparent group consensus; a shared illusion of unanimity on the majority view; direct pressure exerted on any member who breaks with the group’s stereotypes, illusions or commitments; and the emergence of self-appointed screeners who filter information reaching the group. The effect of these symptoms on decision-making may be positive, although this is typically not the case: “whenever a policy-making group displays most of the symptoms of groupthink, we can expect to find that the group also displays symptoms of defective decision-making.”216
Several factors provide fertile ground for groupthink to take root.217 They include a group that is moderately or highly cohesive, its insulation from external expert information and critical assessments, an absence of an impartial leadership tradition in group deliberations, a lack of methodical procedures to carry out decision-making tasks and stress among group members.
Janis makes clear, however, that it is erroneous to ascribe a cause-effect relationship between a poor policy outcome and the performance of the group that prepared that policy; a range of other factors can play a spoiling role.218 Gaenslen also sounds a note of caution, albeit concerning an over-reliance on the conclusions from empirical studies of group process in foreign policy decision-making. In reviewing studies examining what decision makers do as well as the quality of their decision-making, he concludes that the significance of the findings is unclear and that the tools available to investigate decision processes remain crude.219 In his view, explaining what decision makers do “must ultimately refer to their intentions, purposes, and particular circumstances.”220
215 Ibid., pp. 174-75. 216 Ibid., p. 175. 217 Ibid., pp. 176-77. 218 Ibid., p. 195. 219 Gaenslen, “Decision-Making Groups”, p. 181 and p. 185. 220 Ibid., p. 183.
57 Drawing on insights from social psychology, political science and public administration, Paul ’t Hart extends Janis’ original concept of groupthink in several ways.221 First, he suggests that a nuanced understanding of factors that contribute to groupthink is required. These include input factors of group cohesiveness, deindividuation222 and anticipatory compliance by individual group members.223 On the output side he cites risk taking and recklessness, and commitment and entrapment.224 ’t Hart’s second refinement is to posit that both cohesiveness and conflict within a government may promote groupthink,225 so that neither is mutually exclusive. In contrast, Janis focused only on the role of the former. Finally, ’t Hart identifies two different types of groupthink: collective avoidance and collective over- optimism.226 The former corresponds to Janis’ original idea whereas the latter is new. Collective over-optimism refers to perceptions by group members that personal or professional gains will result from resolving an issue.227 The drawback is that the lure of potential rewards may affect negatively the quality of the policy and diligent assessment of risks and weaknesses.228
Multiple Autonomous Actors
Under this decision unit type, individuals, groups or coalitions can act for the government only if some or all of the actors agree. Each individually lacks the authority to decide and to assure compliance by the others.229 An actor can neutralise the actions of another by invoking a formal veto power, by threatening to withdraw from a coalition, by withholding resources necessary for action or denying approval for their use or by launching response measures that can damage the other actors or
221 ’t Hart, Groupthink in Government, chapters 8 and 10. 222 ’t Hart adopts Diener’s definition of this term: “A de-individuated person is prevented by situational factors present in a group from becoming self-aware. De-individuated persons are blocked from awareness of themselves as separate individuals and from monitoring their own behaviour.” E. Diener, “Deindividuation: The absence of self-awareness and self-regulation in group members” in P.B. Paulus (ed.), Psychology of Group Influence, Erlbaum Associates, Hillsdale, 1980, p. 210 cited in ibid., p. 66. 223 Ibid., pp. 115-18. 224 Ibid., pp. 118-20. 225 Ibid., chapter 10. 226 Ibid., pp. 201-03. 227 Ibid., p. 202. 228 Ibid. 229 Hermann and Hermann, “Who Makes Foreign Policy Decisions and How”, p. 364.
58 their objectives.230 In order for multiple autonomous actors to be labeled the decision unit, no other group or individual can independently resolve disputes among the members or reverse a decision reached collectively.231 Examples of this form of decision unit exist in parliamentary, presidential and authoritarian regimes232. As noted earlier, all three types of political system are represented in this study.
Foreign policy behaviour is the outcome of agreement among the actors.233 Where agreement is unattainable deadlock occurs and its resolution depends on whether the political relationship among the actors is zero-sum or non-zero-sum.234 Where the actors recognise the legitimacy of each other to “seek and share power” a procedure to facilitate negotiation and agreement may develop.235 In this situation:
[s]uch entities, in effect, have a non-zero-sum relationship. Because they do not regard negotiation and compromise as defeats or as concessions to an illegal entity, they have a better chance of making a decision than those actors who deny each other’s legitimacy and recognize no limits on practices that keep the others from participating politically.236
In addition, these actors are open to external influences in shaping their action.237 These influences may originate from other constituents of this type of decision unit as well as from the broader environment.238
The converse situation is multiple autonomous actors engaged in a zero-sum relationship.239 They use whatever means are necessary to deny power to others and perceptions are framed in terms of winners and losers.240 In addition, the actors are largely ineffectual in foreign policy because “[t]hey become a self-contained
230 Ibid., p. 368. 231 Ibid. 232 Ibid. 233 Ibid. 234 Ibid., pp. 368-69. 235 Ibid., p. 369. 236 Ibid. 237 Ibid. 238 Ibid. 239 Ibid. 240 Ibid.
59 decision unit fighting among themselves for power and authority, and they are open to little outside influence.”241
2.5 Identifying the Decision Unit
In moving from theory to application the first step is the identification of which of the three decision unit types -- predominant leader, single group, multiple autonomous actors -- occurs in China, Malaysia and the Philippines in relation to foreign policy decision-making on the Spratlys dispute.242 Hermann and Hermann outline a methodology for determining this, as described below.
Figure 1 presents a schema for identifying the decision unit in a particular foreign policy issue. Using a series of questions and decision points, determination of the decision unit type begins with the predominant leader and, as appropriate, moves successively to the single group and multiple autonomous actors categories. Hermann and Hermann give no justification for this sequencing.
The process identified by Hermann and Hermann is as follows.243 Once the foreign policy problem has been recognised the first step is to assess whether the regime leader is the predominant leader. Even if this is affirmative it still needs to be confirmed that this person has authority over and is personally handling the matter. To determine this a series of questions is posed. They cover the interest and active involvement of the leader in foreign and defence issues, the leader’s perception of the importance of the problem to the regime’s or state’s welfare, the personal interest or concern of the leader in the problem, evidence of the on-going participation of the leader in the decision-making process and the extent to which the leader shares decision-making responsibility with others, including the power of veto over a
241 Ibid. 242 The methodology follows that described in general terms in ibid., pp. 369-72. 243 The following three paragraphs derive from ibid., p. 372.
60
Figure 1: Identifying the Decision Unit for a Foreign Policy Issue
Source: Margaret G. Hermann and Charles F. Hermann, “Who Makes Foreign Policy Decisions and How: An Empirical Inquiry”, International Studies Quarterly 33(4), 1989, pp. 370-71.
61 decision. If a predominant leader does not exercise his authority the next possible decision unit examined is a single group.
Questions here include whether a single group has decision-making authority because it has been given responsibility for all problems like the present one (for example, a task force); or the matter relates to an issue critical to the wellbeing of the political regime or state; or because within a hierarchy of policy groups, one has the authority to make decisions that commit or withhold the nation’s resources. Membership of the single group decision unit must include everyone within the regime whose support is essential to commit or withhold state resources for dealing with the foreign policy problem. This condition may also encompass foreign governments or other international entities if the problem is part of a broader issue area.
If the foregoing examinations show that the decision unit is neither a predominant leader nor a single group then it is the multiple autonomous actors category.
Hermann and Hermann recognise, however, that in reality the question of who made the decision in handling a specific foreign policy issue is often unanswerable.244 To address this problem, a proxy approach is used. This requires the analyst to draw on a range of information sources as inputs into the evaluative process described above to estimate the likely decision unit type involved in a foreign policy issue in a given regime.245 This approach is adopted here.
2.6 The Decision Unit and Foreign Policy Behaviour
Identifying the decision unit in China, Malaysia and the Philippines for a particular issue concerning the Spratlys dispute is only half the story. We also need to understand how the decision unit influenced foreign policy behaviour. A clue is the particular characteristic of each decision unit. In the case of a predominant leader
244 Ibid. 245 Ibid.
62 the clue, or “control variable”246, is his/her sensitivity to information from the political environment. For the single group it is the promptness with which consensus is reached and for multiple autonomous actors it is the relationship among the actors. This clue informs us whether the decision unit is “self-contained” or “externally influenceable”.247 The distinction has implications for the decision-making process and a government’s foreign policy behaviour.248
“Self-contained” refers to the situation where the “primary source of explanation for foreign policy resides in the nature of the decision unit itself – the internal dynamics of the unit shape the decision.”249 This grouping includes the insensitive predominant leader, the single group that reaches prompt consensus and multiple autonomous actors with a zero-sum relationship.250 (See Table 1.) On the other hand, “externally influenceable” decision units are vulnerable to outside influences.251 In this category are the sensitive predominant leader, the single group unable to reach agreement and multiple autonomous actors with a non-zero-sum relationship.252
Hermann and Hermann consider how the different decision units are likely to shape foreign policy behaviour.253 This is reflected in the following:
Macro-hypothesis: self-contained decision units are likely to be less constrained by the specific characteristics of a foreign policy problem compared to externally influenceable units.254
This is because they:
are likely to have strong predetermined beliefs about how to handle almost all international situations or to be so absorbed in dealing with the internal
246 Ibid., p. 364. 247 Ibid., pp. 364-65. 248 Ibid., p. 365. 249 Ibid., p. 364. 250 Ibid., p. 373. 251 Ibid., p. 365. 252 Ibid., p. 373. 253 Ibid., pp. 373-76. 254 Ibid., p. 373.
63 dynamics and politics within the decision unit that they ignore the particular features of any given problem or concerned outside interests. … the self- contained units are more likely to push their positions and are less likely to compromise or to take small, incremental steps toward their goals than are the externally influenceable units. They believe they know what should be done in response to the problems they face and are ready to do it. 255
Table 1: Categorising Self-Contained and Externally Influenceable Decision Units
Unit Control variable End points Status Predominant leader Contextual (A) Insensitive Self-contained sensitivity (B) Sensitive Externally influenceable Single group Concurrence (A) Agreement Self-contained
(B) Disagreement Externally influenceable Multiple Relationship among (A) Zero-sum Self-contained autonomous groups groups (B) Non-zero-sum Externally influenceable
Source: Margaret G. Hermann and Charles F. Hermann, “Who Makes Foreign Policy Decisions and How: An Empirical Inquiry”, International Studies Quarterly 33(4), 1989, p. 364.
Hermann and Hermann also advance four ‘micro-hypotheses’:
Micro-hypothesis 1: the insensitive predominant leader and the single group able to reach consensus promptly will engage in conflictual foreign policy behaviour, either strongly commit or withhold regime resources, use economic and military levers and/or diplomacy.256
255 Ibid. 256 Ibid.
64 Micro-hypothesis 2: multiple autonomous actors with a zero-sum relationship will engage in passive foreign policy behaviour, commit few regime resources and make extensive use of diplomacy.257
Micro-hypothesis 3: the sensitive predominant leader and the single group in continuing disagreement will engage in co-operative or neutral foreign policy behaviour, commit a moderate amount of regime resources and rely on diplomacy.258
Micro-hypothesis 4: multiple autonomous actors with a non-zero-sum relationship will engage in co-operative foreign policy behaviour, commit a moderate amount of regime resources and use a variety of instruments of statecraft.259
The empirical analysis presented in Chapters 4 to 7 tests the ‘fit’ between the hypothesised and actual behaviour of China, Malaysia and the Philippines in the Spratly Islands dispute. This case-specific testing of existing hypotheses represents a different but not invalid approach compared to the generation of new hypotheses. It provides a ‘reality check’ of the hypotheses to explain state behaviour in the settings of first, a maritime territorial dispute and second, a specific geographical region. This represents a new application of the decision units approach.
2.7 Bringing In Domestic Politics
The relationship between domestic and international politics in explaining states’ foreign policy behaviour has generated considerable debate among scholars. It has been suggested, for example, that the “distinction between international and domestic politics has become deeply embedded conceptually, pedagogically, and institutionally”.260 On this view international politics is distinct from domestic politics in scope and content as reflected in the statement that “the domestic structure
257 Ibid., p. 375. 258 Ibid., p. 376. 259 Ibid. 260 Wolfram Hanrieder, “International and Comparative Politics: Toward a Synthesis?”, World Politics XX(3), 1968, p. 482 cited in Helen V. Milner, “Rationalizing Politics: The Emerging Synthesis of International, American, and Comparative Politics”, International Organization 52(4), 1998, p. 759.
65 is taken as a given; foreign policy begins where domestic policy ends”.261 In this context, Classical Realists such as Hans Morgenthau argue that:
domestic politics should be ignored because it interferes with the pursuit of realist principles of foreign policy. For these Realists, domestic politics is part of the problem facing statesmen … For some Realists, then, domestic politics needs to be overlooked because it should not interfere with the statesman’s pursuit of the national interest. 262
Other commentators argue for a close, perhaps inseparable, relationship between domestic politics and foreign policy. Former US President Richard Nixon commented, for example, that domestic and foreign policy are like Siamese twins: “Separate them and they die”.263 This group also argues that growing economic interdependence and the emergence of global-scale issues that have significant local effects has blurred, if not erased, the boundary between domestic and international issues.264
This highlights a problem. Realism’s assumption that a ‘one-size-fits-all’ explanation of state interests rather than a ‘horses for courses’ approach risks obscuring the real motivations to a government’s behaviour in the international arena. Denny Roy highlights this in suggesting that Realism does not differentiate regime security from national security.265 Although Realists argue that national security is the pre-eminent policy priority of governments, it is not the case that this always over-rides domestic political considerations.266 Indeed, the main priority of national leaders may be something else again: survival of the regime.267 Where the
261 Henry A. Kissinger, “Domestic Structure and Foreign Policy” in Wolfram F. Hanrieder (ed.), Comparative Foreign Policy: Theoretical Essays, David McKay Company Inc., New York, 1971, p. 22. 262 Helen V. Milner, Interests, Institutions, and Information. Domestic Politics and International Relations, Princeton University Press, Princeton, 1997, p. 261. 263 Serge Schmemann, “Moscow Journal”, New York Times International, 19 February 1993, p. A4 cited in Joyotpaul Chaudhuri, “Federalism and the Siamese twins: diversity and entropy in India’s domestic and foreign policy”, International Journal XLVIII(3), 1993, p. 449. 264 See for example Caporaso, Hermann, Kegley, Jr., Rosenau and Zinnes, “The Comparative Study of Foreign Policy: Perspectives on the Future”, p. 33. 265 Denny Roy, “Realism and East Asia”, Journal of East Asian Affairs XIV(1), 2000, p. 164. 266 Ibid. 267 Ibid., p. 165.
66 interests of national security and regime security converge, there is no problem.268 When they diverge, however, “national security may well be subjugated to the demands of domestic politics, an outcome that violates one of Realism’s core assumptions.”269 To understand why and how this domestic politics ascendancy might occur and its influence on foreign policy behaviour, we need to look inside the state at the actors and processes involved in foreign policy decision-making. This is precisely the focus of foreign policy analysis, the conceptual framework underlying this thesis.
Bridging the conceptual divide between domestic and international politics remains a key challenge in international relations scholarship.270 In the view of Andrew Moravscik the issue is not whether to integrate domestic and international explanations but rather how to do so.271 Indeed, it has been suggested that it is a misjudgement to view as an ‘either-or’ choice whether it is the international system or the domestic environment that determines international politics. Rather, models integrating three levels of analysis -- society, political system and international environment -- are required.272 Such models should be sufficiently flexible to both incorporate and enable analysis of externally and internally driven behaviour.273
Despite these sentiments, a considerable gap exists between theory and practice. Most existing empirical work falls short in integrating levels of analysis and instead reverts to the conventional choice of the international environment or domestic politics as the frame of reference, with attendant loss of explanatory power.274 In discussing progress in integrating domestic and international politics
268 Ibid. 269 Ibid. 270 James A. Caporaso, “Across the Great Divide: Integrating Comparative and International Politics”, International Studies Quarterly 41(4), 1997, pp. 566-584; Charles F. Hermann, “Epilogue: Reflections on Foreign Policy Theory Building”, p. 254. 271 Andrew Moravscik, “Introduction. Integrating International and Domestic Theories of International Bargaining” in Peter B. Evans, Harold K. Jacobson, Robert D. Putnam (eds), Double-Edged Diplomacy. International Bargaining and Domestic Politics, University of California Press, Berkeley, Los Angeles and London, 1993, p. 9. 272 Harald Müller and Thomas Risse-Kappen, “From the Outside In and from the Inside Out. International Relations, Domestic Politics, and Foreign Policy” in David Skidmore and Valerie M. Hudson (eds), The Limits of State Autonomy. Societal Groups and Foreign Policy Formulation, Westview Press, Boulder, 1993, pp. 25-26. 273 Ibid., p. 31. 274 Ibid., pp. 47-48.
67 Moravscik notes that many theorists continue to accord priority to systemic theory and to include domestic politics as a secondary influence on policy.275 In his view this may reflect the priority accorded by international relations analysts to finding explanations at the systemic level and using theories of domestic politics only as needed to explain anomalies.276
Moravcsik suggests, however, that domestic politics can be considered an intervening process, a transmission belt or black box, through which international imperatives find expression in national policies. 277 On this view, Moravcsik notes, the causes that account for different international outcomes are located in the international environment even though the mechanisms by which those causes influence national policy are domestic.278 He further states that all sophisticated theories of international relations recognise the active participation of domestic actors in foreign policy making but their point of divergence is whether the observed domestic behaviour is better explained using international or domestic theory.279
Allison and Zelikow add their voice to those scholars advocating a nuanced analysis of states’ behaviour.280 They argue that rather than concentrating on single variable system-level analysis it is more productive to examine multiple determinants within the state and the interactions between these factors and specific aspects of the external environment. In their view:
[t]he challenge for serious students of domestic factors is to identify the most important internal causes, and delineate more precisely their interaction with external factors in causing important events in international affairs …”281
275 Moravscik, “Introduction”, pp. 9-15. 276 Ibid., p. 6. 277 Ibid., p. 7. 278 Ibid. 279 Ibid. 280 Allison and Zelikow, Essence of Decision. Explaining the Cuban Missile Crisis, p. 404. 281 Ibid.
68 A different but related approach to examining cross-level linkages is presented by Peter Gourevitch.282 In analysing international sources of domestic politics, he argues that:
The international system is not only a consequence of domestic politics and structures but a cause of them. Economic relations and military pressures constrain an entire range of domestic behaviors, from policy decision to political forms. International relations and domestic politics are therefore so interrelated that they should be analyzed simultaneously, as wholes.283
Helen Milner argues that assuming a country's behaviour is caused by international factors is likely to under-estimate the role of domestic factors.284 However:
[n]o political leader can afford to ignore domestic politics - at home or abroad - when contemplating foreign policy choices. What goes on within states cannot be neglected for it shapes all their behavior toward other states.285
In the same vein, Morton Halperin suggests that:
[c]onventional analyses of foreign policy usually assume that the actions of other nations are the major stimuli for foreign policy decisions …they are only one source of stimulation, and not even the more frequent source. Most decisions are responses to domestic pressures, and the actions of other nations often figure merely as devices for argument.286
In democracies several avenues exist for domestic political pressures to influence foreign policy decision-making. They include factions within the ruling party, opposition political parties, interest group lobbying, the media and public pressure. In the case of authoritarian regimes the assumption that foreign policy
282 Peter Gourevitch, “The second image reversed: the international sources of domestic politics”, International Organization 32(4), 1978, pp. 881-912. 283 Ibid., p. 911. 284 Helen V. Milner, Interests, Institutions, and Information, pp. 3-4. 285 Ibid., p. 261. 286 Halperin, Bureaucratic Politics and Foreign Policy, pp. 101-02.
69 making is unconstrained by domestic politics has come under increasing challenge, especially through opposition rooted in internal divisions.287
Domestic politics matters in foreign policy decision-making for several reasons.288 First, an understanding by policy makers of the domestic situation faced by their foreign counterparts aids assessment of other countries’ behaviour. In particular, the underlying reasons for apparently irrational behaviour may reside in the nature and outcome of domestic political and bureaucratic games, the political system and mode of decision-making, the preferences of key actors and the internal channels of information distribution. Second, domestic signals sent among actors within a country provide insight into internal deliberations on foreign policy preferences and the extent of commitment to certain courses of action. Efforts to read these signals can yield benefits to external policy analysts.
The third reason acknowledges that foreign policy decision-making is intrinsically political so decision makers have a stake in monitoring and taking account of relevant domestic political factors as an input to their deliberations.289 This recognises that to give effect to the national interest, however defined, a complex balancing of opportunities and constraints within the internal and external political environments is required to build support and commitment. The relationship between domestic politics and foreign policy is complicated, however, by a requirement for decision makers to play in two, not one, domestic political game. On the one hand, decision makers must build consensus among the multiple set of actors who formally or informally have the authority necessary for committing the nation’s resources to a specific foreign policy position and its implementation. This may include factions within a party, the bureaucracy, the legislature, a politicised military and/or non-governmental actors.290 On the other hand, decision makers’ desire to retain political power means they must balance foreign policy concerns with
287 Hagan, Political Opposition and Foreign Policy in Comparative Perspective, pp. 36-46; Joe D. Hagan, “Regimes, Political Oppositions, and the Comparative Analysis of Foreign Policy” in Charles F. Hermann, Charles W. Kegley, Jr. and James N. Rosenau (eds), New Directions in the Study of Foreign Policy, Allen and Unwin, Boston, 1987, p. 342.. 288 This paragraph draws heavily on Milner, Interests, Institutions, and Information, pp. 259-60 289 The following three paragraphs draw extensively on Hagan, Political Opposition and Foreign Policy in Comparative Perspective, pp. 3-8. 290 Ibid., p. 4.
70 maximisation of domestic support for the regime. In this context, when foreign policy positions are inconsistent with the regime’s domestic political situation, political leaders may have little choice but to adjust their foreign policy to make it accord with domestic realities.291 Robert Putnam characterises this dilemma as a “two-level” game. This refers to the game that national political leaders play as they negotiate simultaneously with each other and their domestic constituents. Political leaders, then, find themselves in a “Janus-faced” situation in which they have to balance concurrently international and domestic interests. Moreover, they must remain vigilant to deploy or counter moves that trigger realignments on either game board that could affect the outcome of the negotiations as well as justification of the results to domestic and international audiences.292
The fourth reason is that domestic politics has important effects on a government’s behaviour in the international arena.293 Political leaders respond to opposition in several ways that condition foreign policy. They include the effect of political opposition on the willingness and ability of the government to commit itself to a particular course of action in foreign affairs, the ameliorating influence of confrontation with and accommodation of opponents concerning the regime’s preferred course of action, and the influence of domestic politics on the level of assertiveness or passivity in diplomatic posturing. Although the influence of domestic politics on foreign policy is neither direct nor simple, the causal linkage between the two can take one of three forms: (i) bargaining and controversy avoidance, reflected in low risk behaviour in international affairs; (ii) legitimisation of the regime and its policies, in which leaders use foreign policy issues to strengthen their domestic position by, for example, appealing to nationalism or stressing external threats to deflect attention from domestic problems; or (iii) leaders act to
291 Ibid., pp. 3-5. 292 See Robert D. Putnam, “Diplomacy and domestic politics: the logic of two-level games”, International Organization 42(3), 1988, pp. 427-60. Jeffrey Knopf identifies limitations of the two- level games notion and proposes an alternative he labels a “three-and-three” approach” involving three levels of analysis and three forms of domestic-international interaction: see Jeffrey W. Knopf, “Beyond two-level games: domestic-international interaction in the intermediate-range nuclear forces negotiations”, International Organization 47(4), 1993, pp. 599-628. 293 Hagan, Political Opposition and Foreign Policy in Comparative Perspective, p. 5.
71 isolate foreign policy from domestic political pressures through ignoring the opposition’s position or suppressing or co-opting their members.294
A fifth reason is that political opposition occurs across nations with different political systems.295 This recognises that opposition may originate from within and outside the political regime.
2.8 Summary
This chapter introduced foreign policy analysis, the conceptual base of the study. From the outset it has focused on how foreign policy decisions are made. Three major approaches that have informed studies of the actors and processes involved in foreign policy decision-making were discussed and a common weakness identified: the absence of a means to distinguish core actors from peripheral ones.
The decision units approach advanced by Margaret Hermann, Charles Hermann and Joe Hagan focuses the analysis only on those actors at the core of foreign policy decision-making in a regime. This practical device restricts the number of actors and agencies to be examined. Three types of decision unit were identified -- the predominant leader, a single group or multiple autonomous actors -- with the power and authority to commit a state’s resources and to make an irreversible decision in respect of a particular foreign policy issue. Each type of decision unit shapes foreign policy behaviour in different ways depending on whether it is self-contained or externally influenceable.
Foreign policy decision-making and government behaviour towards the Spratly Islands dispute is examined here by reference to the decision units approach. Domestic politics is injected as a contextual factor. This combined approach has several advantages. It confines the analysis to core actors in the decision-making process. It permits a cross-national analysis. It is applicable to different political
294 Ibid., pp. 5-8. 295 Ibid., p. 3.
72 regimes. And it explicitly recognises that foreign policy decisions do not occur in a vacuum from domestic politics.
Before proceeding, a caveat is in order. Unlike Hermann and Hermann who outline quantitative methods for determining the control variables and measuring foreign policy behaviour respectively,296 in this study only a qualitative assessment is made. This is not to deny the value of quantitative analysis but rather reflects the study’s goal of using the decision units approach as a tool to illuminate the relationship among foreign policy decision-making, foreign policy behaviour and domestic politics.
To set the context for the empirical analysis, the next chapter provides background to the Spratly Islands dispute.
296 Hermann and Hermann, “Who Makes Foreign Policy Decisions and How”, pp. 377-84.
73 3.0 THE SPRATLY ISLANDS DISPUTE: AN OVERVIEW
Six governments claim all or part of the Spratly Islands. China, Taiwan and Vietnam claim sovereignty and jurisdiction over the Spratly Islands within the sweep of their broader claims to the South China Sea. The claims of Brunei, Malaysia and the Philippines are limited to parts of the Spratlys. The resulting overlap has created a volatile situation of contested claims and provocative actions and responses. Despite the launch of confidence-building measures through dialogue processes, resolution of the sovereignty issue that lies at the heart of the dispute remains elusive. As a result, “the area remains a scab over a festering sore ready to be picked for political leverage.”1
This chapter provides background to the Spratly Islands dispute. It begins by discussing the geography, natural resources and strategic significance of the area. The two latter aspects are commonly identified as the principal factors motivating the competing claims to sovereignty and jurisdiction in the area. Moving from the general to the specific, the territorial claim of each party and the bases they advance in support of it are then outlined.
3.1 The Spratly Islands
Geography
The Spratly Islands are situated in the southern part of the South China Sea, comprising one of the four main island groups present.2 A semi-enclosed sea, the South China Sea covers an area of 648,000 square nautical miles stretching lengthwise from Singapore in the southwest to Taiwan in the northeast, and breadthwise from Vietnam to Sabah3 (see Figure 2).
1 Mark J. Valencia, Jon M. van Dyke and Noel A. Ludwig, Sharing the Resources of the South China Sea, Martinus Nijhoff Publishers, The Hague, 1997, p. 130. 2 The other groups being Pratas Island, Paracel Islands and Macclesfield Bank. 3 J.R.V. Prescott, The Maritime Political Boundaries of the World, Methuen, London, 1985, pp. 209- 10
74 Figure 2: The South China Sea Islands
Source: “The South China Sea Islands”, <
75 A universally accepted definition of the Spratly Islands has yet to emerge. As Victor Prescott states, “[t]here is no single authoritative definition of the Spratly Islands”4 although in his view they “lie south of parallel 12° north and east of meridian 112° east, but exclude all islands within the archipelagic baselines of the Philippines and those which lie 40 nautical miles (nm) off the coast of Borneo.”5 Renate Haller-Trost specifies the co-ordinates “between latitude 6°to 12°and longitude 109°30’E to 117°50’E”6 while Dieter Heinzig suggests it is the area between 4°N and 11°30’N and 109°30’E and 117°50’E.7 David Hancox and Victor Prescott identify the “Spratly Islands region” as lying with one exception “south of 12°N and southwards of the 200 metres isobath off the continental and insular coasts that define the South China Sea. The exception is the Luconia Shoals that lie just landwards of that isobath …”.8 The area associated with the Spratly Islands is shown in Figure 3. An estimate of the total area concerned is 172,000 square nautical miles.9
The number of features located within the Spratlys varies depending on the source cited. Prescott states twenty-six islands or cays certainly exist, with a further seven sets of rocks above high water.10 Other commentators suggest 25 to 35 islets above water at low tide,11 over 100 islands, reefs and banks,12 300 to 400 features13 and a Chinese claim of 193 reefs, shoals, underwater reefs or hidden shoals.14 The features themselves are physically small in size. Itu Aba island is the largest at 1.4
4 Ibid., p. 218. 5 Ibid. 6 R. Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia. An International Law Perspective, Kluwer Law International, London, 1998, p. 295. 7 Dieter Heinzig, Disputed Islands in the South China Sea. Paracels-Spratlys-Pratas-Macclesfield Bank, Otto Harrassowitz and Institute of Asian Affairs in Hamburg, Wiesbaden, 1976, p. 17. 8 David Hancox and Victor Prescott, A Geographical Description of the Spratly Islands and an Account of Hydrographic Surveys Amongst Those Islands, Maritime Briefing 1(6), International Boundaries Research Unit, University of Durham, Durham, 1995, p. 2. 9 Victor Prescott, Limits of National Claims in the South China Sea, ASEAN Academic Press, London, 1999, p. 7. 10 Prescott, The Maritime Political Boundaries of the World, p. 218. 11 Valencia, van Dyke and Ludwig, Sharing the Resources of the South China Sea, p. 5. 12 Heinzig, Disputed Islands in the South China Sea, p. 18. 13 Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia, p. 295. 14 Xinhua, 14 February 1994 cited in Greg Austin, China’s Ocean Frontier: International Law, Military Force and National Development, Allen and Unwin, St. Leonards, 1998, p. 131.
76 Figure 3: The Spratly Islands Maritime Area
Source: Victor Prescott and Clive Schofield, Undelimited Maritime Boundaries of the Asian Rim in the Pacific Ocean, Maritime Briefing 3(1), International Boundaries Research Unit, University of Durham, Durham, 2001, p. 60.
77 kilometres (km) long and 400 metres (m) wide.15 Indeed, “[t]he total land area of the Spratlys above the highest astronomic tide has been estimated to be less than 8 km2 (3 sq. miles) yet they are scattered over an area of around 24,000 km2.”16 In 2000, Vietnam occupied at least 19 features, the Philippines eight, China seven, Malaysia five and Taiwan one.17 Brunei apparently claims Louisa Reef but has not occupied it.18 Figure 4 shows features occupied in the Spratly Islands.
The bottom topography of the Spratlys consists of benches, hills and shoals.19 Atop them sit the myriad reefs, banks and other features identified on navigational charts as the “Dangerous Ground” and over which the claimants in the Spratlys have competing sovereignty and jurisdictional claims. Mark Valencia describes the geology of the deep South China Sea as containing:
the 2-km (1.24-mi)-thick South China Basin, the shallow Spratly and Reed Bank basins, which rest on a microcontinental block, an unnamed and largely unknown basin parallel to the coast of central Vietnam, several thin subbasins in the Paracels, and an unnamed 2-km (1.24-mi)-thick basin in deep water in the northern part of the South China Basin.20
Areas lying partially or completely under 200-1,500 metres of water in the Spratlys include the Central Luconia Platform, the Baram Delta and the Brunei- Sabah, northwest Palawan and Reed Bank basins.21
15 Victor Prescott and Clive Schofield, Undelimited Maritime Boundaries of the Asian Rim in the Pacific Ocean, Maritime Briefing 3(1), International Boundaries Research Unit, University of Durham, Durham, 2001, p. 58. 16 Ibid. 17 Ibid. The figure for Malaysia appears incorrect: I calculate that Malaysia occupied eight features in 2000. See Footnote 185 on pg. 104 herein. 18 Ibid. 19 Joseph R. Morgan and Mark J. Valencia, “The Natural Environmental Setting” in Joseph R. Morgan and Mark J. Valencia (eds), Atlas for Marine Policy in Southeast Asian Seas, University of California Press, Berkeley, Los Angeles and London, 1983, pp. 6-8. See also Joseph R. Morgan and Donald W. Fryer, “The Marine Geography of Southeast Asia” in George Kent and Mark J. Valencia (eds), Marine Policy in Southeast Asia, University of California Press, Berkeley, Los Angeles and London, 1985, p. 13. 20 Mark J. Valencia, “Oil and Gas Potential, Overlapping Claims, and Political Relations” in George Kent and Mark J. Valencia (eds), Marine Policy in Southeast Asia, University of California Press, Berkeley, Los Angeles and London, 1985, p. 158. 21 Ibid.
78 Figure 4: Occupied Features in the Spratly Islands
Source: Victor Prescott and Clive Schofield, Undelimited Maritime Boundaries of the Asian Rim in the Pacific Ocean, Maritime Briefing 3(1), International Boundaries Research Unit, University of Durham, Durham, 2001, p. 59.
79 The South China Sea and its margins lie in a monsoon region.22 In January and February the north monsoon peaks, bringing strong northeasterly winds that can exceed wind-force 5 (39 kilometres per hour, km/hr).23 April and May are the transition months to the south monsoon. In July and August the south monsoon is strongest and wind forces in the open sea can reach wind-force 4 (20-29 km/hr). Between September and November the shift back to the north monsoon occurs.24 Surface currents in the Spratlys are affected by these weather patterns, with an anticlockwise northeasterly circulation pattern evident in the north monsoon season and a clockwise gyre present off the coast of Borneo in the opposite season.25 Annual rainfall in the southern part of the South China Sea exceeds 3000 millimetres, contrasting with about 1000 millimetres received in the northern sector.26
Natural Resources
(i) Hydrocarbons
The geology of the Spratlys is not well understood.27 One hypothesis is that the area from Luconia Shoals in the south to southwest Mindoro in the north separated from the continental margin of China in the Middle Eocene and moved southwards.28 The Baram Delta Province located offshore from Brunei “is a clastic depocenter east of the Central Luconia Province and separated from it by a major fault zone or hinge line – the Baram Line/Tinjar Fault Zone.”29 Oil production from a number of offshore fields in the area is well established.30 In the central Spratlys, the plateaus contain many shoals and banks on top of which lie coral reefs.31 Reed Bank
22 Prescott, The Maritime Political Boundaries of the World, p. 210. 23 Morgan and Fryer, “The Marine Geography of Southeast Asia”, p. 14. 24 Ibid. 25 Brian Morton and Graham Blackmore, “South China Sea”, Marine Pollution Bulletin 42(12), 2001, pp. 1238-39. 26 Prescott, The Maritime Political Boundaries of the World, p. 210. 27 Valencia, “Oil and Gas Potential, Overlapping Claims, and Political Relations”, p. 173. 28 Ibid. 29 Mark J. Valencia, South-East Asian Seas: Oil Under Troubled Waters. Hydrocarbon Potential, Jurisdictional Issues, and International Relations, Oxford University Press, Singapore, 1985, p. 75. 30 See list in ibid. 31 Ibid., p. 80.
80 is the largest continuous shoal area present32 and may have hydrocarbon potential.33 Within the overlapping claim area of Malaysia and the Philippines the presence of “elongated sediment pods several kilometers thick” has been revealed.34
Policymakers in the littoral states of the South China Sea, and Asia more broadly, confront a long-term rising demand for energy to power national economic development, the downturn caused by the 1997-1998 financial crisis notwithstanding.35 A number of countries in the region are established oil importers - - Japan, the Philippines, South Korea and Taiwan -- and by 2010-2025 they may be joined by Brunei, Indonesia, Malaysia and Vietnam.36 In this context, much has been made of the oil and gas potential of the South China Sea.37 Brunei, Indonesia, Malaysia and Vietnam are established producers of oil and/or gas from offshore fields in the Sea. In March 1976 the Philippines discovered a large quantity of oil offshore from Palawan in the South China Sea in the Nido Reef area. Commercial production from the field began in 1979.38 In October 2001 the Philippines began gas production from the Malampaya-Camago offshore field near Palawan Island and in December the same year discovered oil in a reservoir beneath the area.39 In April 2002 the Philippines indicated it would submit a claim for an extended continental shelf of 350 nm to the United Nations Commission on the Limits of the Continental
32 Ibid. 33 Ibid., p. 81; Valencia, “Oil and Gas Potential, Overlapping Claims, and Political Relations”, p. 173. 34 Ibid., p. 175. 35 See for example Robert A. Manning, The Asian Energy Factor. Myths and Dilemmas of Energy, Security and the Pacific Future, Palgrave, New York and Basingstoke, 2000, pp. 61-74; Kent E. Calder, Asia’s Deadly Triangle. How Arms, Energy and Growth Threaten to Destabilize Asia-Pacific, Nicholas Brealey Publishing, London, 1996. 36 Manning, The Asian Energy Factor, p. 73 and pp. 180-181; “Brunei opens new areas for oil and gas exploration”, Kyodo News, 11 November 2000; “Brunei changes economic tack as oil reserves shrink”, South China Morning Post, 4 August 2000. 37 Some in the media use, almost mantra-like, the descriptor “the oil-rich Spratlys”. One journalist unswayed by the hype is Barry Wain. See for example, Barry Wain, “The Myth of the ‘Oil-Rich’ Spratlys”, The Asian Wall Street Journal, 23 June 2000. 38 Diane C. Drigot, “Oil Interests and the Law of the Sea: The Case of the Philippines”, Ocean Development and International Law 12 (1-2), 1982, p. 24. 39 Donnabelle Gatdula, “Malampaya yields oil”, Philippine Star, 4 December 2001; Fil Sionil, “Papalawn natural gas production starts in October”, Manila Bulletin, 12 July 2001. See also Manning, The Asian Energy Factor, p. 174 and pp. 180-183; United States Department of Energy, Energy Information Administration, Country Analysis Briefs: Philippines, Washington D.C., 2002, <
81 Shelf by 2008 with the objective of gaining sovereign rights over prospective oil and gas reserves in the area.40
To date, hydrocarbon exploration has concentrated on the Reed Bank basin on the eastern margin of the Spratlys, the central Spratlys area and the Vanguard Bank area on the western side.41 Estimates of the potential oil and gas reserves in the South China Sea vary enormously. For example, a 1989 Chinese survey of the Spratlys concluded that “the sea floor contained 25 billion m3 of natural gas, 370,000 tons of phosphorous and 105 billion barrels of oil … The James Shoal area contained another large deposit basin with an estimated 91 billion barrels of oil.”42 Other estimates range from six billion barrels of oil equivalent in the Spratlys43 to 28 billion barrels.44 A lack of data about the geology of the area and ambiguity in the geographical coverage of the surveys makes corroboration difficult45 although analyses by independent institutions support the area’s hydrocarbon potential. A further uncertainty is whether any find would meet the engineering, economic, environmental and legal criteria that major oil companies apply as part of a pre- investment analysis.
Malaysia has proven oil reserves of 3 billion barrels and 74 trillion cubic feet of natural gas.46 It has increased its efforts to develop new oil and gas sources in the South China Sea,47 including changes to production sharing contracts and offshore
40 Christine Herrera, “RP hopes to tap 331 billion barrels of oil”, Philippine Daily Inquirer, 27 April 2002. 41 Mark J. Valencia, “Troubled Waters”, Bulletin of the Atomic Scientists 53, 1997, p. 52 42 Cited in John W. Garver, “China’s Push Through the South China Sea: The Interaction of Bureaucratic and National Interests”, The China Quarterly 132, 1992, p. 1015. 43 A 1995 estimate by Russia’s Research Institute of Geology of Foreign Countries cited in Valencia, van Dyke and Ludwig, Sharing the Resources of the South China Sea, p. 10. 44 A 1994 U.S Geological Survey estimate of reserves cited in International Energy Agency, China’s Worldwide Quest for Energy Security, OECD/IEA, Paris, 2000, p. 59. 45 For example, it is not clear whether a 1994 estimate by China’s Ministry of Geology and Mineral Resources of 225 billion barrels of oil equivalent refers to the Spratlys area only or to the entire South China Sea. Valencia, van Dyke and Ludwig, Sharing the Resources of the South China Sea, p. 9 commenting on an article by Bruce and Jean Blanche, “Oil and Regional Stability in the South China Sea”, Jane’s Intelligence Review, November 1995, pp. 511-14. 46 United States Department of Energy, Energy Information Administration, Country Analysis Briefs: Malaysia, Washington D.C., 2002, <
82 exploration policy in a bid to promote increased deep water exploration.48 In July 2002 Murphy Oil, a US exploration company, discovered oil approximately 150 km off the Sabah coast in about 1,340 m of water in the Sabah Trough, the first deepwater oil find in the area. The discovery, named Kikeh after a fish native to Malaysian waters, has recoverable reserves estimated at 400-700 million barrels of oil. This equates to 21 per cent of the country’s current oil reserves.49 Production may begin in 2006.50 The find is an area that both Malaysia and Brunei claim as part of their exclusive economic zone and to which each has let exploration concessions. Malaysia awarded its concession to a subsidiary of Petroliam Nasional Berhad (Petronas), the national oil company, and to Murphy Oil while Brunei selected a French-led consortium comprising Total, Fina and Elf. Another concession may be let to Royal Dutch/Shell.51 In May 2003 Malaysia proposed a joint development arrangement but Brunei has yet to respond formally.52 By the end of August 2003 both Brunei and Malaysia had sent naval vessels to block ships of their respective concessionaires, both Total and Murphy Oil had suspended their work and discussions between Malaysian Prime Minister Mahathir and the Sultan of Brunei, Hassanai Bolkiah, failed to resolve the matter.53
In 1993 China became a net oil importer. Supply countries now include Yeman, Oman, Saudi Arabia, Iran, Indonesia, Angola, Argentina the United States (US) and Russia.54 In 2000 China nearly doubled its crude oil import to 70 million
48 Business Times (Malaysia), June 1993 cited in Alice D. Ba, “China, Oil, and South China Sea: Prospects for Joint Development”, American Asian Review 12(4), 1994, p. 133. 49 S. Jayasankaran and John McBeth, “Oil and Water”, Far Eastern Economic Review, 3 July 2003, p. 17. 50 “Malaysia – Deepwater Sabah revives oil hopes”, Lloyd’s List, 15 April 2003; Noel Tomnay and Helen Munro, “New Southeast Asia discoveries, drilling suggest growth in deepwater exploration”, Offshore, 1 April 2003. 51 Jayasankaran and McBeth, “Oil and Water”, p. 17; “KL plan to end oilfield row with Brunei”, The Straits Times, 3 July 2003. 52 “Malaysia, Brunei fail to end offshore oil dispute”, Kyodo News, 23 August 2003; Jayasankaran and McBeth, “Oil and Water”, p. 17. 53 Ibid., “Talks between Brunei and Malaysia Inconclusive”, Rigzone, 25 August 2003; Jasbant Singh, “Sultan of Brunei, Mahathir to hold talks on oil dispute”, Associated Press, 22 August 2003; “Malaysia, Brunei fail to end offshore oil row”, Reuters, 22 August 2003; “Malaysia, Brunei discuss territorial dispute after oil exploration suspended”, The Straits Times, 21 June 2003; “Border dispute hinders Total’s work”, The Star, 17 June 2003. 54 Manning, The Asian Energy Factor, p. 115; International Energy Agency, China’s Worldwide Quest for Energy Security, pp. 50-53 and Table A-1 in the Appendix of that work.
83 tons.55 One projection suggests that by 2020 China’s oil demand could rise to more than eight million barrels per day to power its economic development, which would make it a major player in world oil markets.56 To assure the country’s energy security the Chinese government has launched a strategy that includes increasing domestic exploration and production, diversifying supply sources to central Africa, Latin America, southeast Asia and Russia, taking equity in oil fields and pipeline projects in central Asia, southeast Asia, the Middle East and Latin America and committing itself to build a strategic oil reserve of 44 million barrels (equivalent to one month’s supply) within the next five years.57 Greater use of natural gas in the domestic energy mix is also being encouraged. In August 2002 China awarded a contract to Australia’s North West Shelf Venture to supply 3 million tonnes/year of liquefied natural gas (LNG) to Guangdong province over the next 25 years, beginning in 2005. The contract is worth between A$700 million to A$1 billion annually. The fuel will be used in power generation.58 As part of the deal, the China National Offshore Oil Corporation (CNOOC) will acquire a 25 per cent stake in the China LNG Joint Venture established to operate the contract. In addition, CNOOC will pay US$348 million for about a 5.3 per cent interest in the upstream production and reserves of the North West Shelf Project.59 China extended its commitment to Australian LNG in October 2003 when CNOOC signed an agreement with the Gorgon Venture Participants (comprising Chevron Texaco, Shell and ExxonMobil)
55 United Nations Conference on Trade and Development, Review of Maritime Transport, 2001, United Nations, New York and Geneva, 2001, p. 7. 56 International Energy Agency, World Energy Outlook 1998 Edition, OECD/IEA, Paris, 1998, p. 293. 57 See Manning, The Asian Energy Factor, p. 86; International Energy Agency, China’s Worldwide Quest for Energy Security, p. 10; “Four sites chosen for strategic oil reserve”, Business Daily Update, 11 April 2003; Anne Hyland, “China buys into Asian oil fields”, Australian Financial Review, 14 March 2003; Hamish McDonald, “China’s oil future includes buying more foreign reserves”, Sydney Morning Herald, 19 September 2002; David Lague, “China. The Quest for Energy to Grow”, Far Eastern Economic Review, 20 June 2002, pp. 14-18; Amy Myers Jaffe and Steven W. Lewis, “Beijing’s Oil Diplomacy”, Survival 4(1), 2002, pp. 115-34; “China’s Oil: Taken hostage”, Economist, 14 July 2001, pp. 28-29; Erica Strecker Downs, China’s Quest for Energy Security, RAND, Santa Monica, 2000; John Wong, China’s New Oil Development Strategy Taking Shape, East Asian Institute Occasional Paper No. 7, World Scientific Publishing and Singapore University Press, Singapore, 1998. 58 “Australia Wins Contract to Supply Gas to China”, Joint Media Release, The Hon. Alexander Downer, MP, Minister for Foreign Affairs, Australia, 8 August 2002, <
84 to take a 12.5 per cent stake in the proposed development of the Gorgon gas field at Barrow Island off Western Australia’s north-west coast. CNOOC also signaled its intention to purchase up to 100 million tonnes of LNG from the Gorgon field over 25 years from 2008, valued at approximately A$30 billion.60
The argument that a desire to reduce its oil import dependence explains China’s assertive behaviour in the South China Sea is tempered by two considerations. First, the potential of South China Sea oil and gas has to be placed in the broader context of the concrete measures the Chinese government has implemented to assure the country’s energy security (see above).
Second, even if the considerable political, legal, technical and economic challenges of oil and gas development in the contested areas of the South China Sea were overcome the production volume might only be a modest offset against, rather than substitute for, imported sources. Robert Manning suggests, for example, that any production from a significant find in the South China Sea is only likely to be a marginal contribution to China’s oil import demand in 2020. At that time China’s projected total demand may be within the range of 6-9 million barrels per day. This compares with a highly optimistic production level of 500,000 barrels/day from a field in the Spratlys.61
For China and the other claimants, oil and gas production from fields in the deeper parts of the Spratlys is alluring as a means to offset current and projected oil import dependence. In practice, a number of caveats apply. They include uncertainty about estimates of the total oil and gas reserves present, the commercially viable volume, the opportunity cost of developing a new field compared to purchasing stocks in the international oil market, technical and environmental challenges of hydrocarbon development in deep water and the anticipated share of different fuels in the national energy structure.
60 “China’s CNOOC to buy stake in Australia LNG field - Source”, China Daily, 24 October 2003; Gorgon Venture Participants, “CNOOC and Gorgon Sign LNG Deal. Media Statement”, 24 October 2003, <
85 (ii) Fisheries
Fish provide an important source of protein to local communities in southeast Asia, with per capita fish consumption in all but Cambodia exceeding the world average.62 In China per capita fish consumption has increased rapidly over the last 20 years, highlighting the growing role of fish as food.63 In 1996, the Philippines ranked thirteenth among the world’s top 51 fish producing countries, with total production of 1.8 million tonnes (or 1.9 per cent of the world catch of 94.6 million tonnes that year).64 Production from Malaysia’s marine fishery in 1995 was just over 1.1 million tonnes, valued at 2.7 million ringgit.65 Revenue from fishing contributes 8 to 10 percent of Sabah’s annual gross domestic product and compared to other Malaysian states it is a fish exporter.66 Figures for total marine fish production, marine fish export value and fish consumption for several of the South China Sea littoral states are shown in Table 2.
The South China Sea is one of the world’s richest commercial fisheries, with pelagic species being the most important.67 Among the world’s fishing zones defined by the United Nations Food and Agriculture Organisation (FAO) the area encompassing the South China Sea (zone 71) ranks fourth in terms of total marine production.68 Citing estimates produced by others, John McManus notes that the annual catch from the waters of the Sabah-Palawan area of the Spratlys is about 10,000 tons, valued at approximately US$15 million.69 Target species in the South China Sea include scads, mackerels, tuna (skipjack and yellowfin), sardines,
62 See Kuan-Hsiung Wang, “Bridge over troubled waters: fisheries cooperation as a resolution to the South China Sea conflicts”, The Pacific Review 14(4), 2001, p. 535. 63 United Nations, Food and Agriculture Organisation, The State of World Fisheries and Aquaculture 2000, Food and Agriculture Organisation, Rome, 2000, <
86 anchovies and shrimps.70 Most of the fishery resources in the area are either shared stocks or highly migratory species.71 This makes adhesion by the littoral states to the 1995 Agreement for the Implementation of the Provisions of the United Nations Convention on the Law of the Sea of 10 December 1982 relating to the Conservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks (the Fish Stocks Agreement) highly relevant. As of 19 August 2003, China had made a declaration on the agreement while Indonesia and the Philippines had signed it.72
Table 2: Selected Fisheries Statistics
Country Total marine fish Value of total Per capita production, 1997 marine fish supply, 1999 (Mill. tonnes) exports, 1997 (kg/yr) (US$ mill.) Brunei 0.004 Not recorded 21.4 China (excludes 10.7 313.9 25.3 HK/Macau) Malaysia 0.9 12.5 51.7 Philippines 1.5 16.2 29.1 Singapore 0.7 31.4 Not recorded Thailand 2.2 27.3 32.2 Vietnam 0.7 12.8 17.2 World 72.5 3.7 billion 15.8
Source: Compiled from FAOSTAT Database, “Fishery data, Primary products”, <
Over time fishing pressures have intensified and fishermen are working farther offshore, increasing incidences of alleged poaching and illegal fishing in
70 Wang, “Bridge over troubled waters”, p. 536. 71 Ibid. 72 From data prepared by the United Nations, Division for Ocean Affairs and the Law of the Sea, Office of Legal Affairs, <
87 waters of neighbouring states.73 Malaysia, for example, loses approximately one billion ringgit of fish annually to foreign fishermen poaching in its territorial waters. In response, the government approved extra patrols in the South China Sea and the Straits of Malacca.74 To address unintentional incursions into foreign territorial waters Malaysia’s foreign minister mooted the installation of global positioning system (GPS) equipment on Malaysian trawlers.75 A Chinese survey indicated that fishing harvests north of the Spratlys have been declining and that the resource may be depleted within a decade because of illegal and over-fishing.76
In response to the problem of too many fishermen chasing too few fish some countries have introduced management measures. Malaysia reintroduced its vessel buyback scheme to reduce the fleet size.77 Annually since 1999 China has issued a moratorium prohibiting its fishermen from fishing in parts of the South China Sea, Bohai Sea, East China Sea and Yellow Sea between June and August.78 Thus unilateral action has been protested by other South China Sea claimants.79
Competition over the South China Sea’s natural resources does not preclude co-operation in addressing shared environmental threats relating to sustainable fisheries, protection of marine biodiversity and combating the threat of marine
73 See for example, “Philippine navy nabs 21 Vietnamese fishermen”, Associated Press, 26 May 2003; “Brunei holds 17 Vietnamese for alleged fisheries offences”, Borneo Bulletin, 13 May 2003. Reprinted in BBC Monitoring Asia Pacific, 13 May 2003; “Navy Says PRC, SRV Boats Intruded into Philippines-controlled Waters in Spratlys”, Philippine Daily Inquirer, 23 April 2001; Michael Dwyer, “Tensions Soar Over Disputed Spratly Isles”, Australian Financial Review, 8 February 2000; Geoffrey Till, “China, Its navy and the South China Sea”, Royal United Services Institute Journal 141(2), 1996, p. 47. 74 Farush Khan, “RM1b revenue loss sparks war on illegal fishing”, The Straits Times, 27 February 2002. 75 “FM wants M’sian trawlers to install GPS to avoid encroachment”, Bernama, 19 July 2001. 76 Chien Chung, “Economic Development of the Islets in the South China Sea”, Paper presented at the South China Sea Conference sponsored by the American Enterprise Institute, 7-9 September 1994, p. 21 cited in Coulter, “South China Sea Fisheries”, p. 378. 77 United Nations, Food and Agriculture Organisation, Review of the State of the World Fishery Resources: Marine Fisheries, Western Central Pacific, FAO Statistical Area 71, FAO Fisheries Circular No. 920, Rome, 1997,<
88 pollution. Illustrating the extent of these threats are recent findings that 82 per cent of the area’s reefs are degraded beyond healthy levels, almost 70 per cent of the original mangrove cover has been lost and pollution from land-based and marine sources is becoming serious.80 In response, in March 2001 the United Nations Environment Programme (UNEP) launched a regional environment project covering the South China Sea and the Gulf of Thailand. The five-year, US$32 million project is funded by the Global Environment Facility and the governments of Cambodia, China, Indonesia, Malaysia, the Philippines, Thailand and Vietnam. An action programme and the establishment of a regional environmental management framework are priority initiatives.81 Another co-operative environmental programme is the South China Sea Monsoon Experiment. This brings together scientists from the six governments with claims in the South China Sea and colleagues from Indonesia, Singapore and Thailand to examine the timing, duration and intensity of the summer monsoon in order to improve the accuracy of regional climate and weather models.82 Both of these initiatives are consistent with Article 123 of the 1982 United Nations Convention on the Law of the Sea (LOSC). This enjoins states bordering an enclosed or semi-enclosed sea to co-operate with each other directly or through an appropriate regional organisation in the management, conservation, exploration and exploitation of the living resources present and the protection and preservation of the marine environment, as well as co-ordinating their scientific research policies and, where appropriate, carrying out joint research programmes.
Strategic Significance
Lim Joo-Jock suggests that the South China Sea is the core of a geostrategic region.83 In his view the South China Sea serves three strategic functions. First, in
80 Barry Wain, “The Sea: Asia’s Depreciating Asset”, The Asian Wall Street Journal, 8 June 2001. See also David Rosenberg and Miranda Hillyard, “Coral Reef Pollution in the South China Sea”, <
89 geostrategic terms the Sea’s ingress and egress points enable access to a maritime region in which land and sea are closely linked as well as occupying about the same- sized area.84 Historically, the Sea has provided an entry point into a region perceived to be rich in resources and it has facilitated seaborne trade links between East Asia and Europe and military advantage in time of war.85 For example, during the Second World War Japan used Itu Aba as a submarine base from which to launch operations.86 During the Cold War the two superpowers found the South China Sea and its entry points provided useful, although not essential, transit for their forces in and between the Pacific and Indian Oceans.87 In transiting to bases in the far east, naval vessels of the Soviet Union used Macclesfield Bank as a mid-sea anchorage.88 On either side of the South China Sea each superpower maintained military bases: the US at Clark airfield and Subic Bay in the Philippines and the Soviets at Vietnam’s Cam Ranh Bay. The two rivals also regarded the Sea as a “route to succour allies and bring naval influence to bear on enemies and to discourage any hostile acts by potential foes.”89
Despite the demise of superpower rivalry, Lim’s identification of the value of transit passage through the Sea and the strategic advantages of control over it continues to hold. Freedom of navigation and of overflight in the South China Sea and the straits that adjoin it (Malacca, Sunda, Lombok and Ombar-Wetar) are a shared interest of regional and extra-regional states.90 Influence over or control of the area would enable a wide ‘footprint’ to be cast in terms of surveillance and interdiction activities as well as the possibility to threaten to or disrupt regional sea lines of communication (SLOCs). It has been suggested, for example, that China is
84 Ibid., p. 226. 85 Ibid., p. 227. 86 Valencia, van Dyke and Ludwig, Sharing the Resources of the South China Sea, p. 21. On hydrographic surveying in the South China Sea by Japan between 1936 and 1941 see David Hancox and Victor Prescott, Secret Hydrographic Surveys in the Spratly Islands, ASEAN Academic Press, London, 1999, pp. 113-131. 87 Lim, “The South China Sea: Changing Strategic Perspectives”, p. 228. See also Lee G. Cordner, “The Spratly Islands Dispute and the Law of the Sea”, Ocean Development and International Law 25(1), 1994, p. 61; Mark J. Valencia, “Asia, the Law of the Sea and international relations”, International Affairs 73(2), 1997, p. 275. 88 James A. Gregor, In the Shadow of Giants: The Major Powers and the Security of Southeast Asia, Hoover Institution Press, Stanford, 1989, p. 88 cited in Duk-Ki Kim, Naval Strategy in Northeast Asia. Geo-strategic Goals, Policies and Prospects, Frank Cass, London and Portland, 2000, p. 69. 89 Lim, “The South China Sea: Changing Strategic Perspectives”, p. 229. 90 Valencia, “Asia, the Law of the Sea and international relations”, p. 274.
90 likely to maintain its presence in the Spratlys to influence use of the international sea lanes when and if necessary.91
The second strategic function of the South China Sea relates to its location astride major regional SLOCs. By volume, over half of the world’s supertanker traffic and merchant shipping passes through the South China Sea region each year.92 It is an important ‘maritime bridge’ connecting Asia to markets and raw materials suppliers in Europe, South Asia, the Middle East, North America and Australasia as well as facilitating intra-Asian trade. Unhindered movement of oil shipments from the Middle East to northeast Asia is important from both an energy and economic security perspective. For example, Japan’s dependence on open SLOCs is high given that 75 to 80 per cent of its oil imports from the Middle East are transported across the South China Sea.93 About 70 per cent of Taiwan’s oil and raw materials imports are transported across the sealanes of the South China Sea.94 South Korea also has an interest in open SLOCS given that it imports most of its oil supply. More generally, “[f]ive of the top ten petroleum product routes in the world involve shipments to or within Asia.”95 The region also accounts for significant volumes of iron ore, coal and grain shipments.96
The Malacca, Sunda and Lombok straits are the main entry points for merchant ships transiting to and from Asia to the Middle East, Africa and Europe (see Figure 5). While closure of these shipping lanes would not be catastrophic because alternative routes exist, the extra sailing time involved has cost, convenience and fleet capacity implications.97 In this regard, “[t]he factor that converts a localized maritime concern (SLOC closure) to a global economic event (freight rate crisis cum
91 Daojiong Zha and Mark J. Valencia, “Mischief Reef: Geopolitics and Implications”, Journal of Contemporary Asia 31(1), 2001, p. 92. 92 United States Department of Energy, Energy Information Administration, South China Sea Region, Washington D.C., 2002, <
91 capacity shortfall) is the large volume of shipping and world trade transiting the South China Sea.”98 (emphasis in original.)
Figure 5: The Strategic Chokepoints of the Malacca, Sunda and Lombok Straits
Source: John H. Noer, Chokepoints: Maritime Economic Concerns in Southeast Asia, National Defense University Press, Washington D.C., 1996, p. 3.
98 Ibid., p. 33.
92 Within the South China Sea, established shipping routes lie to the east and west of the Spratlys, avoiding the middle area marked on navigation charts as the “Dangerous Ground”. From Singapore mariners are advised to follow one of two routes to Hong Kong, Shanghai and other northern ports. The eastern route parallels the Sarawak-Brunei-Sabah coast and then enters the Palawan Passage before heading to Manila and then across to Hong Kong. An alternative western route passes between Macclesfield Bank and the Paracel Islands.99
The Southeast Asian context of the South China Sea is the third strategic function identified by Lim.100 He suggests that the Sea can be considered a break between the land powers of the northern part of Southeast Asia and the south.101 Viewed in this context, the peninsular parts of Thailand and Malaysia form a strategic land ridge102 leading into the “heart of maritime Southeast Asia.”103
A further strategic function of the South China Sea concerns the possibility of using some of the features as basepoints for claiming extended maritime jurisdiction over the waters and resources pursuant to the LOSC.104 The convention distinguishes three types of seabed elevations: islands, low-tide elevations and elevations that are never above sea level.105 All three types are found in the Spratly Islands and the South China Sea more broadly.106 Under Article 121 of the convention an island can generate the full suite of maritime zones measured from coastal baselines, that is a territorial sea, a contiguous zone, an exclusive economic zone (EEZ) and continental shelf. By contrast, rocks that cannot sustain human habitation or economic life of their own cannot generate an EEZ or continental shelf, only a territorial sea and a
99 Hydrographer of the Navy, Ocean Passages for the World, Third Edition, United Kingdom Hydrographic Office, Taunton, 1973, p. 106. 100 Lim, “The South China Sea: Changing Strategic Perspectives”, p. 226 and pp. 229-30. 101 Ibid., p. 229. 102 Wu Yuan-Li, The Strategic Land Ridge, Hoover Institution Press, Stanford, 1975 cited in ibid. 103 Ibid., p. 230. 104 Gerardo M.C. Valero, “Spratly archipelago dispute. Is the question of sovereignty still relevant?”, Marine Policy 18(4), 1994, p. 316. 105 Alex G. Oude Elferink, “The Islands in the South China Sea: How Does Their Presence Limit the Extent of the High Seas and the Area and the Maritime Zones of the Mainland Coasts?”, Ocean Development and International Law 32(2), 2001, p. 177. 106 Ibid., pp. 177-78.
93 contiguous zone. The term “island” is defined in paragraph 1 of Article 121;107 the term “rock” is undefined in the convention. The island-rock definitional problem is well recognised,108 including in the case of the South China Sea.109
An EEZ and continental shelf attaches to some of the islands in the South China Sea,110 which may motivate the states involved in the dispute to retain or seek to acquire these features.111 Chapter 4 describes the different methods of territorial acquisition under international law.
3.2 Sovereignty Claims
This section describes the sovereignty claims of the six governments directly involved in the Spratly Islands dispute. For convenience, the claimants are considered in alphabetical order.
Brunei
In 1988 Brunei published a map showing a claim to a rectangular shaped area extending from its coast to Rifleman Bank,112 a feature occupied by Vietnam. Within this area lies Louisa Reef (see Figure 6). It is unclear whether Brunei claims sovereignty over this feature; some scholars argue in the affirmative,113 while others
107 “An island is a naturally formed area of land, surrounded by water, which is above water at high tide.” United Nations Convention on the Law of the Sea, Article 121, paragraph 1, <
94 Figure 6: Brunei’s Maritime Claim in the South China Sea
Source: R. Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia. An International Law Perspective, Kluwer Law International, London, 1998, p. 501.
95 disagree.114 There is consensus, however, that Malaysia also has a claim to the feature. The roots of Brunei’s eastern and western boundary delimitations with Malaysia lie in the North Borneo (Definition of Boundaries) Order in Council No. 1517 and the Sarawak (Definition of Boundaries) Order in Council No. 1518 of 11 September 1958.115 Brunei’s claim incorporating Rifleman Bank appears to be based on an extended continental shelf of 350 nm.116 If so then as a party to the LOSC Brunei must comply with the procedure set out in Article 76 concerning the definition of the continental shelf.117 This includes a requirement to submit information on an extended continental shelf claim to the Commission on the Limits of the Continental Shelf established under the convention. A complicating factor is that the Commission will not consider any submission unless all states involved in a continental shelf delimitation or territorial dispute consent.118 A further difficulty with Brunei’s apparent extended shelf claim is that “the East Palawan Trough terminates the natural prolongation of the continental shelf 60 to 100 miles off Brunei.”119
Haller-Trost suggests Louisa Reef is probably a rock rather than a low-tide elevation.120 It is unable to sustain human habitation or economic life on its own in its existing state.121 Brunei has not allocated a territorial sea to the reef in its maps.122
114 Citing a 27 January 1992 report in the Borneo Bulletin that was in turn cited by a confidential US report, Greg Austin writes “In 1992, Brunei made plain that it had no territorial sovereignty claim over Louisa Reef, the one land feature lying in areas it claims as resource zones which are disputed with other states.” Yann-huei Song writes that “Brunei does not claim territorial sovereignty over any of the islands in the area [South China Sea]” although in 1984 it “declared an EEZ that includes Louisa Reef”. See Austin, China’s Ocean Frontier, p. 212; Yann-Huei Song, United States and Territorial Disputes in the South China Sea: A Study of Ocean Law and Politics, Maryland Series in Contemporary Asian Studies, Number 1-2002 (168), School of Law, University of Maryland, Baltimore, 2002, p. 72. 115 Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia, p. 45. See also the detailed discussion on pp. 44-66 and pp. 367-68 therein. 116 Cordner, “The Spratly Islands Dispute and the Law of the Sea”, p. 68. 117 Brunei ratified the LOSC on 5 November 1996. Previously in 1982 it had claimed a 200 nm fishing zone and in 1984 a 200nm EEZ. 118 United Nations, Rules of Procedure of the Commission on the Limits of the Continental Shelf, UN Doc. CLCS/3/Rev3, Annex I, paragraph 5(a), 6 February 2001, <
96 China
China claims “indisputable” sovereignty over the Paracel and Spratly Islands because it was the first to discover, name, exercise jurisdiction over, develop and undertake economic activities there.123 In the Spratlys its claim covers all the features present as a single entity.124
In support of its claim to both island groups, China cites historical evidence beginning with voyages by its ships across the South China Sea 2,000 years ago in the Han dynasty (206-220 A.D.) and continuing during the T’ang (618-960 A.D.) and Ming dynasties (1368-1644).125 Citing a number of sources, Valencia, van Dyke and Ludwig note that intermittent reference to, and maps of, the islands and other features appear in Chinese records from the 12th to 17th centuries.126 As Samuels points out, however, these references are likely to relate to the Paracel Islands and Macclesfield Bank rather than the Spratlys.127 In particular, the traditional shipping route from China’s southernmost tributary and trading partners was along the western and southwestern edge of the South China Sea linking the Hainan-Paracels corridor with the Vietnamese coast and thence to Singapore or Sumatra.128 “In effect, the traditional route avoided or, at least, skirted, the Spratly Islands on the west.”129 A 1730 text written by Ch’en Lun-Chiung, the Hai-kuo wen-chien lu (Sights and Sounds of the Maritime Countries), included a description of an area called Ch’i- chou Yang (Sea of Seven Islands) to the east of which is found the Ch’ien-li shih-
123 Ministry of Foreign Affairs of the People’s Republic of China, Historical Evidence to Support China’s Sovereignty over Nansha Islands, <
97 t’ang (Thousand li Bank).130 The latter, in Samuels’ view, can be interpreted as the first Chinese reference to the Spratly Islands.131 Evidence of a Chinese presence in the Spratlys from the 19th Century includes trade with fishermen conducted by persons from Hainan Island and the unearthing of burial markers and personal effects. 132
Samuels suggests that an implicit claim to the Spratlys by China might date from 1883 when the government officially protested a German expedition, even though it did not represent a clear statement of Chinese sovereignty.133 He goes on to note that the earliest official Chinese claim to and international agreement on the South China Sea islands was the Convention on the Delimitation of the Frontier between China and Tonkin signed between France and China on 26 June 1887.134 Chinese officials have argued that the inference of the delimitation set out in the convention is that the Paracel and Spratly Islands were part of China and recognised as such by France.135 Monique Chemillier-Gendreau counters this, suggesting the convention relates to the land territories,136 the attribution of the coastal islands of the two states was a supplemental purpose and also at that time claims to maritime space were conventionally limited to a territorial sea while concepts of a contiguous zone, fisheries zone and continental shelf date only from post-World War II,137 the frontier delimited was between China and that distinct area referred to by France as Tonkin138 and the meridian line has no terminal point specified in the convention because its length relates to the existence of the coastal islands.139 Furthermore she notes that neither side brought up the issue of the Paracels and Spratlys during the
130 Ibid., p. 34. 131 Ibid., p. 36. 132 Valencia, van Dyke and Ludwig, Sharing the Resources of the South China Sea, p. 21. 133 Samuels, Contest for the South China Sea, p. 52. See also Teh-Kuang Chang, “China’s Claim of Sovereignty over Spratly and Paracel Islands: A Historical and Legal Perspective”, Case Western Reserve Journal of International Law 23(3), 1991, p. 405, p. 411 and p. 413. 134 Samuels, Contest for the South China Sea, p. 52. 135 Ibid., p. 53. 136 Monique Chemillier-Gendreau, Sovereignty over the Paracel and Spratly Islands, Kluwer Law International, The Hague, 2000, p. 83. This is the English translation of her book originally published in French as La souveraineté sur les archipels paracels et spratleys, Editions L’Harmattan, Paris, 1996. 137 Ibid., p. 84. 138 Ibid. 139 Ibid.
98 negotiations.140 She concludes that the 1887 convention “does not deal with the archipelagos and could therefore have no legal consequences for their status, even indirectly.”141 Indeed, her view is that in the 1880s “Vietnamese title was real and effective. It was not challenged by China either on the ground or at the diplomatic level.”142
After the convention was concluded neither France nor China exhibited interest in the Paracels or Spratlys.143 Neither an 1894 Chinese map of the unified empire nor a 1906 Chinese geography textbook show the Spratlys as belonging to China.144 Chemillier-Gendreau concludes that by the late 19th Century China had “voiced no clear claim to either [the Paracels or Spratlys] archipelago”145 and even at the beginning of the 20th Century it did not demonstrate an interest in the islands.146 In the 1920s both France and Japan were active in the Paracels and by 1927 their competition extended to the Spratlys, much to China’s concern.147 On 23 September 1930 France issued a communiqué that it claimed ownership of Spratly Island and Amboyna Cay148 and proceeded to survey them and other features.149 On 26 July 1933 a notice in France’s Journal Officiel identified the islets claimed150 asserting they were terra nullius.151 The claimed features were Spratly Island, Amboyna Cay, Itu Aba, Loai Ta, Thitu and Northeast Cay and Southwest Cay (the latter two are located in the same feature).152 Japan was the only country to lodge a protest.153
On 30 March 1939 Japan occupied the Spratly Islands and on 9 April the same year Tokyo announced its complete occupation of Pratas Island, the Paracels
140 Ibid., p. 85. 141 Ibid., p. 95. 142 Ibid. 143 Ibid., p. 85. 144 Ibid., p. 75. 145 Ibid. 146 Ibid., pp. 97-98. 147 Samuels, Contest for the South China Sea, pp. 53-63. 148 Hancox and Prescott, Secret Hydrographic Surveys in the Spratly Islands, p. 84; Chemillier- Gendreau, Sovereignty over the Paracel and Spratly Islands, p. 111. 149 Hancox and Prescott, Secret Hydrographic Surveys in the Spratly Islands, pp. 85-87. 150 Chemillier-Gendreau, Sovereignty over the Paracel and Spratly Islands, p. 111; Samuels, Contest for the South China Sea, p. 64. 151 Chemillier-Gendreau, Sovereignty over the Paracel and Spratly Islands, p. 111. 152 Austin, China’s Ocean Frontier, p. 134. 153 Chemillier-Gendreau, Sovereignty over the Paracel and Spratly Islands, p. 111.
99 and the Spratlys.154 France protested the Japanese action in the Spratlys but inexplicably not the Paracels.155 At the end of the Second World War the status of the South China Sea islands was confused. While the February 1946 Treaty of Chung-King authorised the Republic of China’s Chiang Kai-shek to occupy the Paracels he unilaterally extended this to include the Spratlys.156 In October 1946 a French warship, the Chevreud, reportedly landed crew on Spratly Island and Itu Aba Island, placing a stone marker on the latter to denote Paris’ ownership.157 The Chinese government responded by sending a four-boat force to take possession of both the Paracels and Spratlys and in December 1947 it formally incorporated the four island groups (Paracels, Spratlys, Pratas Island, Macclesfield Bank) into Kuangtung Province.158 France did not protest this action.159
In 1947 the Chinese government published a map showing a U-shaped line that stretches from offshore Vietnam south to near the Natuna Islands before turning back to parallel the coast offshore from Sarawak, Brunei and Sabah, Palawan Island, Luzon and finally through the Bashi Channel between Taiwan and the Philippines160 (see Figure 7). It is unclear whether the line denotes a claim to the waters and resources enclosed therein; Beijing has never given an official explanation of the line, creating ambiguity about its meaning and co-ordinates.161
Chi-kin Lo suggests the first public sign of the PRC’s claim to sovereignty over the Paracel and Spratly Islands dates from a May 1950 article in the People’s Daily criticising Philippines President Elpidio Quirino for implying the Spratlys belonged to his country.162 The government subsequently announced its official
154 Samuels, Contest for the South China Sea, p. 64. 155 Ibid., p. 65. 156 Chemillier-Gendreau, Sovereignty over the Paracel and Spratly Islands, pp. 115-16. 157 Samuels, Contest for the South China Sea, pp. 75-76. 158 Ibid., p. 76. 159 Ibid., p. 77. 160 Zou Keyuan, “The Chinese Traditional Maritime Boundary Line in the South China Sea”, The International Journal of Marine and Coastal Law 14(1), 1999, pp. 30-34. 161 Ibid., p. 36 and p. 51; Valencia, van Dyke and Ludwig, Sharing the Resources of the South China Sea, pp. 24-28; Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia, pp. 329-32; Barry Wain, “Beijing Should Erase the ‘U-shaped Line’”, The Asian Wall Street Journal, 26 May 2000. 162 Chi-kin Lo, China’s Policy Towards Territorial Disputes. The Case of the South China Sea Islands, Routledge, London and New York, 1989, p. 27.
100 Figure 7: China’s 1947 U-shaped Boundary Line Map
Source: Zou Keyuan, “The Chinese Traditional Maritime Boundary Line in the South China Sea”, The International Journal of Marine and Coastal Law 14(1), 1999, p. 29.
101 position in the context of multilateral and bilateral peace treaties with Japan.163 Article 2 of the 1951 San Francisco Treaty stripped Japan of all her rights, title and claim to the Spratlys and the Paracels. The treaty did not specify to whom they would be given, however.164 Neither the Republic of China nor the People’s Republic of China (PRC) was represented in the conference but Foreign Minister Zhou Enlai of the PRC had already voiced a claim by Peking over the four island groups in August 1951.165 The ambiguity re-surfaced in the Sino-Japan Peace Treaty concluded a year later, which was silent on the matter.166 Austin argues that between 1946 and 1971, the date when the Philippines occupied three islands, Chinese sovereignty over the Spratlys was unchallenged by any other claimant state.167 This is at odds with a report prepared by Vietnam’s Ministry of Foreign Affairs noting that on 7 September 1951 during the seventh Plenary Session in the San Francisco Peace Conference, Prime Minister Tran Van Huu of the Republic of Vietnam released a statement affirming his country’s right to the Spratly and Paracel Islands, “which have always belonged to Vietnam.”168
Throughout the 1950s and into the 1960s China issued numerous statements asserting its sovereignty over the Spratly and Paracel Islands.169 Peking was especially critical of the perceived role of the US behind the claims and actions of the Philippines and South Vietnam in the Spratlys, which were viewed as part of a broader strategy to contain China and threaten its security.170 During the 1970s and early 1980s China amplified its claim to the Spratlys but moderated its anti-US remarks.171 The 1970s also saw a greater emphasis of China’s claim to maritime space in the South China Sea.172 This co-incided with the negotiation of a new law of
163 Ibid., pp. 27-28 164 Samuels, Contest for the South China Sea, p. 77; Chemillier-Gendreau, Sovereignty over the Paracel and Spratly Islands, p. 120. 165 Samuels, Contest for the South China Sea, pp. 78-79 166 Chemillier-Gendreau, Sovereignty over the Paracel and Spratly Islands, p. 121. Samuels suggests that Japan gave tacit recognition of the Chinese claim to the Spratlys and Paracels, however. See Samuels, Contest for the South China Sea, p. 80. 167 Austin, China’s Ocean Frontier, p. 149 and p. 160. 168 Republic of Vietnam, Ministry of Foreign Affairs, White Paper on the Hoang Sa (Paracel) and Truong Sa (Spratly) Islands, Ministry of Foreign Affairs, Saigon, 1975, p. 86. 169 Lo, China’s Policy Towards Territorial Disputes, p. 30. 170 Ibid., pp. 32-33. 171 Ibid., pp. 34-37. 172 Ibid., p. 49.
102 the sea and its focus on establishing rights and responsibilities for extended national maritime jurisdiction, a process in which China participated fully.
In 1988 China seized Fiery Cross Reef from Vietnam and throughout the 1990s re-affirmed its claim to sovereignty in the Spratlys through a number of means. They included the erection of boundary markers, letting of oil exploration concessions, lodgement of diplomatic protests against the actions of other claimants and occupation of and construction on features.
Several considerations undermine China’s assertion of “indisputable sovereignty” over the Spratlys. They include inaction on the United Kingdom’s 1877 authorisation of commercial guano collection on Spratly Island and Amboyna Cay173 and a similar initiative by Japan during the late 1920s and early 1930s concerning phosphate mining,174 as well as the apparent failure to protest France’s 1933 Journal Officiel notice.175 The non-acquiescence of other nations is another consideration.176 Currently five other governments claim all or part of the Spratlys, while France’s position remains unclear.177 In addition, Chemillier-Gendreau argues that until 1988 China’s claim was “devoid of any trace of effective occupation” and only from then was the beginning of partial occupation present.178
173 M.F. Lindley, The Acquisition and Government of Backward Territory in International Law, Negro University Press, New York, 1926, pp. 6-7 cited in Austin, China’s Ocean Frontier, p. 133. According to Austin the United Kingdom appears to have abandoned its claim in the Spratlys: see ibid., p. 160. This is not the view of Haller-Trost, who states that while the British Government has not formally renounced its claim it has also not pursued it because it appreciates that its case would not be strong. Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia, pp. 304- 05. In particular Footnote 64 on these pages. See also Geoffrey Marston, “Abandonment of Territorial Claims: The Cases of Bouvet and Spratly Islands” in The British Yearbook of International Law 1986, Clarendon Press, Oxford, 1987, pp. 344-56. 174 Samuels, Contest for the South China Sea, p. 63. 175 Ibid., p. 64; Chemillier-Gendreau, Sovereignty over the Paracel and Spratly Islands, p. 111; Austin, China’s Ocean Frontier, p. 138. 176 See Valencia, van Dyke and Ludwig, Sharing the Resources of the South China Sea, p. 24. 177 Chemillier-Gendreau, Sovereignty over the Paracel and Spratly Islands, p. 138. She notes that in 1956 France still claimed the Spratlys even though it did not maintain an effective presence. In contrast, Haller-Trost writes that five years earlier at the San Francisco Peace Conference France did not renew its claim or lodge any reservation when it signed the resulting treaty. Through this non- action, in Haller-Trost’s view, the international law principle of estoppel means that France lost any claim it might still have had. Compare Chemillier-Gendreau, Sovereignty over the Paracel and Spratly Islands, p. 124 to Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia, p. 309 and pp. 320-21. 178 Chemillier-Gendreau, Sovereignty over the Paracel and Spratly Islands, p. 137. See also Valencia, van Dyke and Ludwig, Sharing the Resources of the South China Sea, pp. 22-24; Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia, p. 309.
103 Despite these problems, Michael Bennett suggests that China has adopted a pragmatic, instrumental approach to international law to support its claim in the Spratlys.179 It has “combined a history of acts committed by the Guomindang [China’s Nationalist government, replaced by the Communists in 1949], earlier imperial Chinese Governments, and, in the case of the San Francisco Treaty, Western states, to support its claim to the islands.”180 This, in Bennett’s view, reflects China’s perspective that international law is an instrument of a state’s foreign policy.181 Chapter 5 discusses this issue further in the context of China.
Malaysia
Malaysia’s claim traces to 1979 when it published a map (the Peta Baru, or New Map) showing the boundary of its claimed continental shelf,182 arguing that it has title to features within the enclosed area.183 Figure 8 shows Malaysia’s maritime claims in the southern part of the Spratlys. In addition to extension of its continental shelf, Malaysia cites discovery and occupation as the basis of its claim.184 In total, Kuala Lumpur claims 12 islands and features in the southern part of the Spratlys.185 Of this number, eight features were occupied in 2003: Ardasier Reef, Dallas Reef, Erica Reef, Investigator Shoal, Louisa Reef, Marivales Reef, Royal Charlotte Reef and Swallow Reef.186 Of the remaining features claimed by Kuala Lumpur, Commodore Reef is occupied by the Philippines, Amboyna Cay and Barque Canada Reef are occupied by Vietnam and Luconia Reef is unoccupied.187
The continental shelf extension argument is difficult to sustain. First, under the LOSC a coastal state has sovereign rights not sovereignty over the seabed.188
179 Michael Bennett, “The People’s Republic of China and the Use of International Law in the Spratly Islands Dispute”, Stanford Journal of International Law 28(2), 1992, pp. 446-448. 180 Ibid., p. 448. 181 Ibid., pp. 448-49. 182 Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia, p. 323; Austin, China’s Ocean Frontier, p. 155. 183 Ibid., p. 225. 184 Valencia, van Dyke and Ludwig, Sharing the Resources of the South China Sea, p. 36. 185 Ibid. 186 Compiled from ibid and Rigoberto Tiglao, “Seaside Boom”, Far Eastern Economic Review, 8 July 1999, p. 14 concerning the 1999 occupation of Investigator Shoal and Erica Reef. 187 Valencia, van Dyke and Ludwig, Sharing the Resources of the South China Sea, p. 36. 188 Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia, p. 324.
104 Second, neither the LOSC nor Malaysia’s 1966 Continental Shelf Act indicate that the continental shelf refers to features that rise above sea level.189 Third, conventionally under international law title to land generates the right to maritime zones, not vice-versa.190 Fourth, some of the claimed features, such as Amboyna Cay, lie beyond 200nm from the inferred baselines of Malaysia’s 1979 map.191 While the LOSC permits a continental shelf claim up to 350nm from coastal baselines, certain criteria have to be met.
Recognising the problems with the continental shelf extension argument, Malaysia has tended to now emphasise the discovery and occupation rationale.192 This is also problematic. Precedents established under international law imply that in itself discovery of unoccupied land is insufficient to establish title. Evidence of occupation also needs to be demonstrated and other criteria may be applied, such as effective exercise of authority and acquiescence by other nations.193 In the case of Malaysia, its occupation of features is relatively recent (dating from 1983), its claim is contested by other states and it controls only some of the claimed features.194
189 Valencia, van Dyke and Ludwig, Sharing the Resources of the South China Sea, p. 37. 190 Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia, p. 324. 191 Ibid., p. 325. 192 Valencia, van Dyke and Ludwig, Sharing the Resources of the South China Sea, p. 37. 193 Ibid., pp. 17-20. 194 Ibid., p. 37.
105 Figure 8: Malaysia’s Maritime Claims in the Southern Part of the Spratlys
Source: R. Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia. An International Law Perspective, Kluwer Law International, London, 1998, p. 485.
106 Philippines
In May 1956 Filipino businessman Tomas Cloma proclaimed a new state, Kalayaan (Freedomland), covering a group of 33 features in the Spratlys that he had ‘discovered’ six years earlier and colonised by 1950.195 The PRC and the Republic of Vietnam protested Cloma’s claim while the Philippines government obfuscated its official position.196 Cloma’s claim failed but it galvanised a renewed interest in the South China Sea by countries, including the Philippines.197 On 4 December 1974 Cloma signed a “Deed of Assignment and Waiver of Rights” of his Kalayaan claim to the Philippines government.198
In 1971 the Philippines government declared that the 53 islands within Kalayaan were terra nullius and that Manila effectively occupied and controlled Thitu, Flat and Nanshan islands.199 A year later Kalayaan was incorporated within the administrative area of Palawan province.200 Presidential Decree 1596 of 11 June 1978 reaffirmed this. The decree also identified the co-ordinates of the Kalayaan Island Group and declared the area’s sea-bed, subsoil, continental margin and air space as part of Philippine territory.201 Spratly Island itself was not included.202 Figure 9 shows the Kalayaan claim and its overlap with Malaysia’s claimed continental shelf boundary.
Decree 1596 identified several justifications for the claim. The proximity of the Kalayaan Island Group was vital to the Philippines’ security and economic
195 Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia, p. 313; Austin, China’s Ocean Frontier, p. 152; Samuels, Contest for the South China Sea, pp. 81-82. 196 Ibid., pp. 82-84; Austin, China’s Ocean Frontier, p. 152; Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia, p. 313-15; Haydee B. Yorac, “The Philippine Claim to the Spratly Islands Group”, Philippines Law Journal 53(2), 1983, p. 45. 197 Samuels, Contest for the South China Sea, p. 86. 198 Gil S. Fernandez, “The Philippines’ South China Sea Claims” in Aileen San Pablo-Baviera (ed.), The South China Sea Disputes. Philippine Perspectives, Philippine-China Development Resource Center and Philippine Association for Chinese Studies, Quezon City, 1992, p. 20. 199 Austin, China’s Ocean Frontier, p. 153. 200 Ibid. 201 Presidential Decree No. 1596 Declaring Certain Areas Part of the Philippine Territory and Providing for their Government and Administration, Manila, 11 June 1978. Reprinted in Aileen San Pablo-Baviera (ed.), The South China Sea Disputes. Philippine Perspectives, Philippine-China Development Resource Center and Philippine Association for Chinese Studies, Quezon City, 1992, p. 55. 202 Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia, p. 319.
107 Figure 9: The Philippines’ Kalayaan Claim and its Overlap with Malaysia’s Claimed Continental Shelf Boundary
Source: R. Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia. An International Law Perspective, Kluwer Law International, London, 1998, p. 509. Note that since 1999 Malaysia has occupied both Erica Reef and Investigator Shoal.
108 survival; much of the area formed part of the continental margin of the Philippine archipelago; the area did not legally belong to any state but because of history, indispensable need and effective occupation and control it now belonged to the Philippines; and other countries’ claims to some of the area had lapsed through abandonment and could not prevail over the Philippines on legal, historical and equitable grounds.203 Of these justifications, Yorac argues that the Philippines has a persuasive argument for title based on abandonment, terra nullius and effective occupation.204
The oil factor is considered to have played a part in the timing of the presidential decree.205 The oil crises of the early 1970s highlighted the Philippines’ dependence on Middle Eastern sources and the political, economic and security implications of this.206 In addition, three years after its discovery the Nido Reef field offshore from Palawan was almost entering production (see section earlier on Natural Resources). And exploratory drilling in the Reed Bank area had commenced in 1976.207
Several weaknesses are apparent in the Philippines’ arguments. First, Cloma’s claim carries no weight in international law since it was the action of an individual and not a government or its representative agent.208 Second, under international law proximity is not a criterion to establish title.209 Third, the non- acquiescence of the other claimants undercuts Manila’s assertions of effective occupation and abandonment.210 Fourth, the Palawan Trough separates the Spratly Islands from the Philippine archipelago so that there is no natural prolongation of
203 “Presidential Decree No. 1596 Declaring Certain Areas Part of the Philippine Territory and Providing for their Government and Administration”. 204 Yorac, “The Philippine Claim to the Spratly Islands Group”, p. 61. 205 Drigot, “Oil Interests and the Law of the Sea”, pp. 40-41. 206 Ibid., pp. 24-25. As Drigot notes there, the political dimension had a domestic element: “the continued dependence of this predominantly Catholic country on imported oil from the Islamic nations makes her extremely vulnerable to external political pressures on behalf of the Muslim secessionist movement in the southern part of the archipelago.” 207 Ibid., p. 25 and p. 41. 208 Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia, p. 322. 209 Ibid. 210 Ibid., p. 323; Valencia, van Dyke and Ludwig, Sharing the Resources of the South China Sea, p. 35.
109 the continental shelf.211 This rebuts the argument that much of the claimed area is part of the Philippines’ continental shelf.212
Taiwan
In area, Taiwan’s claim in the South China Sea parallels that of the People’s Republic of China. History, geography, international law and facts underlie Taiwan’s sovereignty claim to the Spratly Islands, the Paracel Islands, Macclesfield Bank and the Pratas Islands according to the 10 March 1993 Policy Guidelines for the South China Sea adopted by Taipei.213 The guidelines also state that “[t]he South China Sea area within the historic water limit is the maritime area under the jurisdiction of the Republic of China, in which the Republic of China possesses all rights and interests.”214 This latter claim is based on the U- shaped line published on a 1947 map issued by the then Nationalist government of China.
Taiwan claimed the Spratly Islands group in 1946.215 Between that year and 1950 it occupied Itu Aba but was then absent until 1956.216 In response to the 1956 Kalayaan claim made by the Filipino Tomas Cloma (see above), Taiwan re- occupied Itu Aba on 11 July that year217 and continues to do so. In the early 1960s Taipei strengthened its presence in the Spratlys through reinforcement of the garrison on Itu Aba, establishment of a regular patrol system among the islands and erection of boundary markers on several features.218 In addition, it was announced that a mail service would operate between Kao-hsiung and Itu Aba.219 Following an announcement in November 1999 that Taipei would replace its marines with coastguard personnel on Itu Aba (and Pratas Island),220
211 Ibid. 212 Ibid. 213 Kuan-Ming Sun, “Policy of the Republic of China towards the South China Sea. Recent developments”, Marine Policy 19(5), 1995, pp. 402-03, p. 406 and p. 408. 214 Ibid., p. 403 and p. 408. 215 Austin, China’s Ocean Frontier, p. 147. 216 Ibid.; Samuels, Contest for the South China Sea, p. 77. 217 Ibid., p. 85. 218 Ibid., p. 89. 219 Foreign Broadcast Information Service, 12 August 1974, B2 cited in ibid. 220 “Taiwan can’t defend Spratlys, says Tang”, Taiwan News, 19 November 1999; “Taiwan to withdraw marines from Spratly islands”, Japan Economic Newswire, 19 November 1999.
110 implementation of the plan began in early 2000. The effect was to shift responsibility from the Ministry of National Defense to a newly formed Coast Guard Administration.221 Following the signing in November 2002 of the ASEAN-China Declaration on the Conduct of Parties in the South China Sea, Taiwan reiterated its sovereignty over the four main island groups located therein.222
Taipei’s assertion of sovereignty over the Spratlys as a whole, as opposed to the one feature of Itu Aba, based on continuous occupation and effective control is difficult to sustain.223 And while Article 2 of the 1952 Sino-Japan Peace Treaty stated that Tokyo renounced to China all right, title and claim to the Spratly Islands, inter alia, it remains unclear whether this means the People’s Republic of China or the Republic of China.224 Despite this conundrum, neither Taipei nor Beijing has challenged the other’s claim in the South China Sea nor engaged each other in any military conflict there.225 Finally, Taipei’s historic waters claim in the South China Sea is problematic.226 Like Beijing, Taipei has yet to explain the meaning and co-ordinates of the area enclosed by a U-shaped line depicted on a 1947 map issued by the Chinese government.
Vietnam
Vietnam’s sovereignty claim in the Spratly Islands, an area it refers to as Truong Sa, is based on history.227 Various dates have been suggested from which Vietnam considered it held title, including between 1460 and 1497 during the reign of King Le Thanh Tong,228 and 1650 to 1653.229 Neither Vietnam nor China
221 Barry Wain, “Taiwan’s South China Sea Dilemma”, The Asian Wall Street Journal, 4 May 2001. 222 Huang Kwang-chun, “ROC Reiterates Sovereignty over 4 Island Groups in South China Sea”, Central News Agency, 5 November 2002. 223 See Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia, p. 322. 224 Samuels, Contest for the South China Sea, pp. 79-81. 225 Lin, “Taiwan’s South China Sea Policy”, p. 334. 226 See Sun, “Policy of the Republic of China towards the South China Sea”, pp. 403-06; Kuan- Ming Sun, “The Republic of China’s Policy Toward the South China Sea: A Review”, Issues and Studies 32(3), 1996, pp. 44-49. 227 Valencia, van Dyke and Ludwig, Sharing the Resources of the South China Sea, p. 30; Cordner, “The Spratly Islands Dispute and the Law of the Sea”, p. 65. 228 Valencia, van Dyke and Ludwig, Sharing the Resources of the South China Sea, p. 30. 229 Cordner, “The Spratly Islands Dispute and the Law of the Sea”, p. 65.
111 has yet produced documentation that equivocally demonstrates possession before the 18th Century, however.230 An 1838 map, the “Dai Nam Nhât Thông Toàn Dô”, identifies the Spratlys under the name Van Ly Truong Sa and shows it as part of Vietnamese territory even though the location of the area is incorrectly identified.231 In 1852 the French “occupation” of Cochin China began and in the following decades the Empire of Vietnam lost interest in the offshore islands.232 Austin suggests that the “earliest specific official act” that Vietnam can cite in a title claim over the Spratlys is France’s occupation of one of the islands in 1930.233 Subsequently, and as noted earlier, in July 1933 France issued a notice in its Journal Officiel identifying seven features it had annexed. Vietnam claims this action was made on its behalf, a doubtful proposition in Austin’s view.234 He argues, moreover, that “[t]here is no evidence that France specifically passed on its rights in the Spratly Islands to the RVN [Republic of Vietnam] when the latter was granted independence on 4 June 1954.”235 Even if this successor state assertion were sustainable, Haller-Trost identifies a problem of internal logic in Vietnam’s argument: France’s 1933 annexation notice referred to only seven of the more than 300 features in the Spratlys whereas Vietnam claims all of them.236
In the September 1951 San Francisco Peace Treaty negotiations, Vietnam reaffirmed its claim to sovereignty over the Paracels, Spratlys, Pratas Island and Macclesfield Bank.237 Samuels suggests this was a protest against an identical claim made in August 1951 by Communist China’s Foreign Minister Zhou Enlai.238 On 1 June 1956 the South Vietnamese government released a communiqué reiterating sovereignty over the Paracel and Spratlys Islands and
230 Chemillier-Gendreau, Sovereignty over the Paracel and Spratly Islands, p. 57 and p. 66. 231 Republic of Vietnam, Ministry of Foreign Affairs, White Paper on the Hoang Sa (Paracel) and Truong Sa (Spratly) Islands, p. 69. 232 Ibid., p. 70; Cordner, “The Spratly Islands Dispute and the Law of the Sea”, p. 65; Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia, p. 304. 233 Austin, China’s Ocean Frontier, p. 139. 234 Ibid., pp. 139-40. 235 Ibid., p. 140. See also Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia, p. 321. 236 Ibid. 237 Republic of Vietnam, Ministry of Foreign Affairs, White Paper on the Hoang Sa (Paracel) and Truong Sa (Spratly) Islands, p. 86. 238 Samuels, Contest for the South China Sea, p. 79.
112 referred also to its statement in the 1951 San Francisco treaty negotiations.239 More troubling in trying to sustain a case of Vietnamese title in the Spratlys were statements by North Vietnam in 1956 and 1958 conceding sovereignty over the area to the People’s Republic of China.240 In 1971 and 1973 Hanoi sought to go back on these statements by claiming the Spratlys as Vietnamese territory.241 South Vietnam was also active, incorporating ten of the islands into Phuc Tuy province on 6 September 1973 and letting oil concessions.242 In the immediate aftermath of the collapse of the South Vietnamese regime in April 1975, Hanoi quickly occupied the six features in the Spratlys previously held by Saigon to deny them to China.243
Following reunification in 1976 the Socialist Republic of Vietnam replaced the Republic of Vietnam and Democratic Republic of Vietnam, the appellations of the former southern and northern governments respectively. In 1976 the new government issued a map of a unified Vietnam showing the Paracels and Spratlys as Vietnamese territory, to China’s concern.244
The government of the Socialist Republic of Vietnam now argues that the 1956 and 1958 statements were a practical necessity of the times.245 As Haller- Trost notes, however, “any statements issued in relation to territorial matters by the former North Vietnam Government are still binding.”246 An attempt by a government to go back on a previously stated position invokes the legal principle of estoppel. The aim of estoppel is “to preclude a party from benefiting by his own inconsistency to the detriment of another party who has in good faith relied upon a representation of fact made by the former party.”247 As Bowett remarks,
239 B.A. Hamzah, The Spratlies. What Can be Done to Enhance Confidence, Institute for Strategic and International Studies (ISIS) Research Note, Institute of Strategic and International Studies Malaysia, Kuala Lumpur, 1990, p. 5. 240 See Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia, p. 321; Chemillier-Gendreau, Sovereignty over the Paracel and Spratly Islands, p. 77. 241 Dzurek, The Spratly Islands Dispute: Who’s On First?, p. 20. 242 Ibid. 243 Samuels, Contest for the South China Sea, p. 107. In 1988 China seized Fiery Cross Reef from Vietnam in a short but bloody engagement. 244 Ibid., p. 108. 245 Valencia, van Dyke and Ludwig, Sharing the Resources of the South China Sea, p. 33. 246 Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia, p. 321. 247 D.W. Bowett, “Estoppel Before International Tribunals And Its Relation To Acquiescence” in The British Yearbook of International Law 1957, Oxford University Press, London, 1958, p. 177.
113 “the principle of good faith lies at the very root of the doctrine of estoppel.”248 This “requires that a party adhere to its statement whether it be true or not.”249 Bowett goes on to identify three essential conditions of estoppel: a clear and unambiguous statement of fact; the statement is made voluntarily, unconditionally and is authorised; and there must be reliance in good faith upon the statement either to the detriment of the party relying on it or to the advantage of the party making it.250 Even where the conditions of estoppel are unmet, an admission by a party may be used as evidence to show a lack of consistency or weakness in its position.251
In the early 1990s both Vietnam and China used American oil companies as surrogates for their respective territorial claims in the Spratlys.252 This involved the granting of oil exploration concessions by China to Crestone Energy Corporation and by Vietnam to Mobil in adjacent, contested areas.253 In 1992 Hanoi distinguished its continental shelf claim in two parts: a mainland shelf that includes Vanguard Bank and Prince of Wales Bank, and the Spratly Islands.254 It maintains, however, its claim to the entire Spratlys “whether by reason of sovereignty … or by right of mainland continental shelf jurisdiction.”255
248 Ibid., p. 193. 249 Ibid., p. 184. 250 Ibid., p. 202. 251 Ibid., pp. 195-97. 252 Dzurek, The Spratly Islands Dispute: Who’s On First?, pp. 29-33; Adam Schwarz with Matt Forney, “Oil on Troubled Waters. Vietnam’s Conoco deal draws fire from China”, Far Eastern Economic Review, 25 April 1996, p. 65. 253 Valencia, van Dyke and Ludwig, Sharing the Resources of the South China Sea, p. 27 and pp. 130-31. 254 Dzurek, The Spratly Islands Dispute: Who’s On First?, p. 50. 255 Ibid.
114 4.0 BOLSTERING SOVEREIGNTY CLAIMS: THE APPROACHES OF MALAYSIA AND THE PHILIPPINES
While all the sovereignty claims of the parties to the Spratlys dispute are weak under international law, this has not constrained efforts to bolster them using a variety of means.1 This chapter focuses on two different approaches taken by Malaysia and the Philippines during the 1990s. Several reasons lie behind the selection of the approaches. First, they are distinguishable from chronic, lower-level measures such as the detention of fishermen allegedly poaching in waters claimed by another party to
1 Maritime jurisdiction is a related but separate topic not examined here. Both Malaysia and the Philippines have adopted a range of maritime jurisdiction measures. In 1960 Malaysia acceded to the four Geneva conventions resulting from the first United Nations Conference on the Law of the Sea in 1958. The conventions covered the territorial sea and contiguous zone; the continental shelf; fishing and conservation of the living resources of the high seas; and the high seas. In 1966 Malaysia adopted its Continental Shelf Act, in 1969 it declared a 12 nautical mile territorial sea, in 1979 it published the Peta Menunjukkan Sempadan Perairan dan Pelantar Benua Malaysia Baru (otherwise known as the Peta Baru, “New Map”) showing the boundaries of its claimed territorial waters and continental shelf, in 1980 it proclaimed an exclusive economic zone (EEZ) and in 1984 enacted the Exclusive Economic Zone Act. Bilateral agreements with Indonesia and Thailand on the delimitation of territorial waters and continental shelves, and with Singapore on the territorial waters boundary in the Strait of Johor have also been concluded. The Philippines has also established several relevant measures. The maritime treaty limits of the Philippines are set out in three instruments: the 1898 Treaty of Peace between the United States (US) and Spain (Treaty of Paris), a subsequent treaty of 1900 between the same two countries for the cession to the US of any and all islands of the archipelago outside the lines described in Article III of the Treaty of Paris and a 1930 treaty between Great Britain and the US. Other relevant measures include Republic Act No. 3046 of 17 June 1961 as amended by Republic Act No. 5446 of 18 September 1968 concerning the baselines of the territorial sea, Proclamation No. 370 of 20 March 1968 declaring as subject to the jurisdiction and control of the Philippines all mineral and other natural resources in the country’s continental shelf and Presidential Decree No. 1599 of 11 June 1978 establishing an EEZ and for other purposes. On Malaysia’s maritime jurisdiction measures, and the implications thereof, see R. Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia. An International Law Perspective, Kluwer Law International, London, 1998; R. Haller-Trost, “Some Comments on the Territorial Sea and Continental Shelf Map of Malaysia” in Elisabeth Mann Borgese, Norton Ginsburg and Joseph R. Morgan (eds), Ocean Yearbook 12, The University of Chicago Press, Chicago and London, 1996, pp. 316-33; Mark J. Valencia, Malaysia and the Law of the Sea: The foreign policy issues, the options and their implications, Institute of Strategic and International Studies, Kuala Lumpur, 1991; Hamzah, Bin Ahmad, Malaysia’s Exclusive Economic Zone. A Study in Legal Aspects, Pelanduk Publications, Petaling Jaya, 1988; Mark J. Valencia and Abu Bakar Jaafar, “Malaysia and Extended Maritime Jurisdiction: The Foreign Policy Issues”, Malaysian Journal of Tropical Geography 10, 1984, pp. 56- 64; Hamzah, Bin Ahmad, Malaysia and the United Nations Conference on the Law of the Sea: Selected Documents, Hang Lee Stationery and Printing, Kuala Lumpur, 1983. Discussion of, and documents relating to, the Philippines’ maritime jurisdiction measures include Rodolfo A. Arizala, “Shall We Implement the United Nations Convention on the Law of the Sea (UNCLOS)?”, Foreign Relations Journal XI(2), 1996, pp. 51-57; Jorge R. Coquia, “Issues and Prospects in the Philippine Implementation of the UN Convention on the Law of the Sea”, Foreign Relations Journal X(1), 1995, pp. 57-73; Pacifico A. Castro (ed.), The Philippines and the Law of the Sea, Foreign Service Institute, Manila, 1983; Hermogenes C. Fernandez, The Philippine 200-mile Economic Zone. Sources of Possible Cooperation or Conflict with Other Countries, Series One, Monograph No. 3, Development Academy of the Philippines Press, Manila, 1982.
115 the dispute,2 the placement or destruction of territorial markers on contested features, the unearthing of ‘evidence’ in support of a claim3 or the issuance of diplomatic protests. Second, the examples illustrate that while the claimants may have an identical end, to bolster their sovereignty claim, the means they use to promote it differ. While Malaysia’s approach emphasised occupation of contested features, the Philippines concentrated on diplomacy to internationalise its position. Consistent with the objective of the thesis, the chapter looks behind each action to understand better who made decisions about its deployment and how external behaviour was shaped by the decision-making process. The influence of domestic politics is also considered.
The chapter begins by summarising the international law principles against which a claim to territorial sovereignty is assessed. Malaysia’s occupation of, and construction on, Investigator Shoal and Erica Reef is then reviewed.4 This was the first time that one member of the Association of Southeast Asian Nations (ASEAN) had moved against the claims of co-members the Philippines and Vietnam in the South China Sea. Following this, the Philippines’ initiatives to internationalise its claim in the Spratlys is summarised. A weak economy and low military capability to handle external threats severely constrained Manila’s options to defend its claim. Diplomacy at bilateral and multilateral levels was the only realistic instrument of statecraft available to shore up its claim. The next part of the chapter applies the decision units approach outlined in Chapter 2 to illuminate which actor group made decisions about the respective approaches, how the decision unit shaped foreign policy behaviour and the contextual role of domestic politics. Finally, a summary of the chapter’s key points is presented.
2 For example, between 1995 and June 2001 the Philippine authorities arrested 695 foreigners and seized 45 foreign vessels for alleged poaching activities near Palawan. Most of the fishermen came from China (484 persons) and Malaysia (132) with the remainder Vietnamese, Taiwanese and Indonesians. “Perez seeks expulsion of Chinese Ambassador”, Agence France-Presse, 20 September 2002. 3 For example, China asserts that a 10-year, 21 expedition long investigation in the Spratlys proved its claim of original habitation and development. “Nansha Archipelago Study Proves China’s Claim”, Beijing Review, 13-19 March 1995, p. 31. 4 Investigator Shoal is referred to by Malaysia as Terumbu Peninjau, by the Philippines as Pawikan and by China as Yuya Shoal. Erica Reef is called Terumbu Siput by Malaysia, Gabriela Silang Reef by the Philippines and Boji Reef by China.
116 4.1 Acquisition of Territory under International Law
Under international law five principles guide assessment of a claim of territorial sovereignty, or title. First, discovery and occupation exhibiting effective control.5 This conjunction is critical; discovery by itself is insufficient to establish title.6 The emphasis on physical presence as proof of occupation began to shift in the twentieth century towards “actual, continuous and peaceful display of state authority over the territory.”7 Particularly relevant are decisions in the sovereignty disputes concerning Clipperton Island, the Island of Palmas, the Minquiers and Ecrehos islets and a number of islands in the Gulf of Fonseca.8 They reflected a view that “[s]overeignty is required over activities in the land rather than merely acquisition of the land itself as property.”9 (emphasis added.) This consideration has not been lost on some of the Spratlys claimants. For example, both China and the Philippines have incorporated claimed areas within the administrative responsibility of nearby provincial governments10 and Malaysia operates a tourist facility on Swallow Reef.
The second principle is prescription. This refers to the situation in which a state demonstrates “peaceful, unopposed and continuous governance” of territory when it actually belonged to another.11 Territorial acquisition by this method requires that “the possession must be a state act, an act à titre de souverain; the possession
5 Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia, p. 306. 6 Ibid. 7 Greg Austin, China’s Ocean Frontier. International Law, Military Force and National Development, Allen and Unwin, St. Leonards, 1998, p. 342. 8 See discussion in Mark J. Valencia, Jon M. van Dyke and Noel A. Ludwig, Sharing the Resources of the South China Sea, Martinus Nijhoff Publishers, The Hague, 1997, pp. 17-19. The decisions themselves are reported in “Arbitral Award on the Subject of the Difference Relative to the Sovereignty over Clipperton Island, Decision rendered at Rome, 28 January, 1931 (France-Mexico)”, The American Journal of International Law 26(2), 1932, pp. 390-94; “Arbitral Award Rendered in Conformity with the Special Agreement Concluded on January 23, 1925 Between the United States of America and the Netherlands Relating to the Arbitration of Differences Respecting Sovereignty over the Island of Palmas (or Miangas), April 4, 1928”, The American Journal of International Law 22(4), 1928, pp. 867-912; Minquiers and Ecrehos Case, France/UK, Judgment of 17 November 1953, <
117 must be peaceful and uninterrupted; the possession must be public; and the possession must persist for a certain length of time.”12 Quantification of several of these terms is problematic, however.13
Conquest and annexation is the third principle. The international community no longer condones victory of one country over another as a means of acquiring territory.14 Fourth, cession. Here territory is transferred, willingly or not, from one state to another, usually by treaty.15
Finally, accretion and avulsion. In this case title is created where natural events increase the land area of a state.16 However, where new, naturally formed territory is located on the continental shelf or in the exclusive economic zone (EEZ) of a coastal state, title does not automatically appertain to it.17 This is determined by reference to international law.18
None of the Spratlys claimants demonstrates a strong legal case for title against any of the above principles.19 Indeed, several scholars suggest there appears no solution to the dispute in contemporary international law.20 No party to the dispute has yet submitted a case for adjudication by the International Court of Justice
12 D.H.N. Johnson, “Acquisitive Prescription in International Law”, British Yearbook of International Law 1950, Volume 27, Oxford University Press, London, 1951, pp. 344-48 cited in Austin, China’s Ocean Frontier, pp. 345-46. 13 Ibid., p. 346. 14 Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia, p. 308 and pp. 339- 40. Note, however, Greg Austin’s point that “a determination of the validity of a claim to territory acquired through use of force must depend in the first instance on a judgement of the legality of the use of force in the particular case.” Austin, China’s Ocean Frontier, p. 349. 15 Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia, p. 309. 16 Ibid., p. 340. 17 Austin, China’s Ocean Frontier, p. 350. 18 Ibid. 19 See analysis in Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia, pp. 306-341. See also Valencia, van Dyke and Ludwig, Sharing the Resources of the South China Sea, chapter 3. 20 Ibid., p. 40; R. Haller-Trost, The Spratly Islands. A Study on the Limitations of International Law, Centre of South-East Asian Studies Occasional Paper No. 14, University of Kent at Canterbury, 1990, p. 3 and pp. 77-78.
118 (ICJ).21 Haller-Trost suggests that in general states are reluctant to bring cases relating to sovereignty to the ICJ because of uncertainty about the result and the time and cost implications.22 In this context, she suggests Malaysia is unlikely to bring the Spratlys dispute to the ICJ.23 For the Philippines, too, there appear problems in bringing a case before the ICJ. Haller-Trost identifies a contradiction between the Philippines’ statement that it would be willing to bring the sovereignty issue concerning the Kalayaan Island Group before the ICJ or similar bodies and an exclusion contained in its declaration recognising as compulsory the jurisdiction of the court.24 In particular, in its declaration the Philippines excludes from the court’s jurisdiction matters relating to its territory, including its territorial sea and inland waters. However, in its note of understanding presented upon signature of the United Nations Convention on the Law of the Sea (LOSC) in December 1982 the Philippines defined its territory as including the Kalayaan Island Group.25
All the claimants except Taiwan, which as a non-state cannot do so, have now ratified the LOSC: the Philippines on 8 May 1984, Vietnam on 25 July 1994, China on 7 June 1996, Malaysia on 14 October 1996 and Brunei on 5 November 1996.26
21 This contrasts with two bilateral disputes involving Malaysia that have been submitted to the ICJ for adjudication. First, with Indonesia over Sipadan and Ligitan Islands. Second, with Singapore over Pedra Branca. On the former see the decision reported in International Court of Justice, Case Concerning Sovereignty over Pulau Ligitan and Pulau Sipadan (Indonesia/Malaysia), General List No. 102, 17 December 2002, <
119 Although each of the claimants in the Spratlys dispute refers to the LOSC to bolster their argument of sovereignty,27 the convention is inappropriate to guide its settlement.28 As Christopher Joyner observes, “[t]he essence of the Spratly dispute lies in questions of territorial sovereignty, not law-of-the-sea issues.”29 In this respect, Barry Buzan’s 1978 contention that “[t]he convention will not so much resolve some disputes as contain them. It will not create order out of chaos, but rather define the terms of disorder” has stood the test of time.30 In the Spratlys dispute disorder has been increased by the selective (mis)interpretation of provisions in the LOSC by parties.31 Notwithstanding this, resort to the LOSC is unlikely to be useful because the convention’s dispute settlement mechanism does not apply to sovereignty disputes.32 The convention’s contribution, in Haller-Trost’s view, is to provide a framework for reaching equitable solutions to maritime boundary delimitation after the sovereignty issue has been settled.33
4.2 Making Waves: Malaysia Moves on Investigator Shoal and Erica Reef
Malaysia’s occupation of Investigator Shoal and Erica Reef in mid-1999 was a continuation of a pre-emptive approach begun in the early 1980s with the seizure of Swallow Reef.34 Investigator Shoal lies in the south-eastern sector of the South China
27 Lee G. Cordner, “The Spratly Islands Dispute and the Law of the Sea”, Ocean Development and International Law 25(1), 1994, p. 68. 28 Ibid., p. 71; Haller-Trost, “Limitations of International Law: The Case of Malaysia’s Territorial Claims in the South China Sea”, p. 227; Xavier Furtado, “International Law and the Dispute over the Spratly Islands: Whither UNCLOS?”, Contemporary Southeast Asia 21(3), 1999, p. 387 and p. 393. 29 Christopher C. Joyner, “The Spratly Islands Dispute: Rethinking the Interplay of Law, Diplomacy, and Geo-politics in the South China Sea”, The International Journal of Marine and Coastal Law 13(2), 1998, p. 234. 30 Barry Buzan, A Sea of Troubles? Sources of Dispute in the New Ocean Regime, Adelphi Paper No. 143, The International Institute for Strategic Studies, London, 1978, p. 2. 31 Furtado, “International Law and the Dispute over the Spratly Islands”, pp. 397-401. 32 Park Hee Kwon, The Law of the Sea and Northeast Asia. A Challenge for Cooperation, Kluwer Law International, The Hague, 2000, p. 94. 33 Haller-Trost, “Limitations of International Law: The Case of Malaysia’s Territorial Claims in the South China Sea”, p. 227. 34 This followed Malaysia’s 1978 claim to Amboyna Cay, Mariveles Reef, Commodore Reef, Louisa Reef, Swallow Reef, Royal Charlotte Reef and Barque Canada Reef. All these features were shown as Malaysian territory in the Peta Baru. Khadijah Muhamed and Tunku Shamsul Bahrin, “Scramble for the South China Sea: The Malaysian Perspective” in R.D. Hill, Norman G. Owen and E.V. Roberts (eds), Fishing in Troubled Waters. Proceedings of an Academic Conference on Territorial Claims in the South China Sea, Centre of Asian Studies Occasional Papers and Monographs No. 97, Centre of Asian Studies, University of Hong Kong, Hong Kong, 1991, pp. 237-38.
120 Sea about 460 kilometres (km) from Palawan and approximately 250 km from Kota Kinabalu within an area claimed by China, Malaysia, the Philippines, Taiwan and Vietnam. Club-like in shape, the shoal has an area of 205 square kilometers (km2) and largely surrounds a lagoon of at least 45 metres (m) depth.35 Less than half the reef dries in patches, with the remainder submerged to depths between 5 m and 18 m.36
In March 1998 the Philippines military observed a basic platform-like structure on the feature and a frigate moored close by.37 Manila did not lodge a formal protest after receiving an assurance from Malaysia’s Foreign Minister Abdullah Badawi that Kuala Lumpur had not authorised the action.38 In June 1999 a two-storey concrete building, helipad, pier and radar antenna replaced the basic structure on the shoal.39 China and Vietnam protested Malaysia’s action in mild terms40 while Taiwan lodged a protest on 13 July against the occupation of both Investigator Shoal and Erica Reef.41 Kuala Lumpur ignored the protests. The Philippines felt deceived by Badawi’s assurance of a year earlier.42 On 24 June Manila lodged a diplomatic protest stating that not only was Investigator Shoal part of Philippine territory and within the country’s EEZ but also Kuala Lumpur had gone against the 1992 Manila Declaration and subsequent ASEAN agreements aimed at defusing tension in the South China Sea.43 Accordingly, Malaysia was requested to reconsider its action in the spirit of ASEAN solidarity and co-operation and in the interests of regional peace and stability.44
35 David Hancox and Victor Prescott, A Geographical Description of the Spratly Islands and an Account of Hydrographic Surveys Amongst Those Islands, Maritime Briefing 1(6), International Boundaries Research Unit, University of Durham, Durham, 1995, p. 18. 36 Ibid. 37 Rigoberto Tiglao, “Seaside Boom”, Far Eastern Economic Review, 8 July 1999, p. 14. 38 Ibid. 39 Ibid. 40 China lodged its protest on 18 May 1999. On China’s comments see for example, “Foreign Ministry News Briefings”, Beijing Review, 19 July 1999, p. 11 and “Spokeswoman Says Spratly Islands Sovereignty Indisputable” Xinhua, 29 June 1999. On Vietnam’s view see “Vietnam protests Malaysian move in disputed Spratlys”, Asian Political News, 5 July 1999. 41 Statement of the Ministry of Foreign Affairs, Republic of China – July 13, 1999, <
121
Defending Malaysia’s fait accompli, Prime Minister Mahathir stated on 27 June that “[w]e have built on [sic] our zone and not outside of the zone, for climatic research and marine-life studies, and also to prevent ship collisions.”45 His new foreign minister, Syed Hamid Albar, concurred: “Our message is very clear. We are doing nothing more than be present in the area that we consider as ours. So if the Philippines protests against the fact that we are in our own continental shelf, we’ll explain.”46
In a seemingly reciprocal response to Malaysia’s action, President Joseph Estrada announced that the Philippines would also build on features it claimed. As he put it, “If they [Malaysia] have been building structures, then we may as well put up our own structures. So we will have a similar solution to this [problem]. We will not allow ourselves to be taken advantage of.”47 This was a reflex remark. Internal differences of opinion on how to respond to Malaysia’s action had yet to be resolved. The protagonists were the secretaries of defence and of foreign affairs. While Estrada supported Secretary of Defence Orlando Mercado’s proposal that Manila build structures on its claimed features, Foreign Affairs Secretary Domingo Siazon opposed the idea.48 The latter argued that such a move would complicate an already sensitive issue and it would erode the Philippines’ moral high ground on the Spratlys dispute in the international arena.49 In the end Siazon’s view prevailed in the cabinet group on political and security affairs (the so-called Cluster E; see section 4.4) meeting in early July 1999.50 Secretaries Mercado and Siazon had earlier reached differing conclusions about whether China and Malaysia had colluded in the “construction boom” in the Spratlys.51 While Mercado doubted the possibility, Siazon suggested construction on Investigator Shoal began when Malaysian Foreign Minister Syed Hamid Albar visited Beijing in May 1998.52 Other foreign affairs officials observed that it was impossible China was unaware of or had not monitored
45 “Structure is on Malaysian Territory- Dr. Mahathir”, Bernama, 27 June 1999. 46 “Malaysia defends presence in Spratlys”. 47 “Building on Spratlys? So will we – Erap”, Manila Standard, 23 June 1999. 48 “Manila drops plan to build structures in the Spratlys”, Asian Political News, 12 July 1999. 49 Ibid. 50 Ibid. 51 “RP sees China-KL collusion on Spratlys”, Manila Standard, 25 June 1999. 52 Ibid.
122 Malaysia’s action and noted Beijing’s mild protest to Kuala Lumpur. They also argued that building new structures would not strengthen the Philippines’ legal position.53
Manila’s concern deepened in July 1999 upon discovery that Kuala Lumpur had occupied and built a two-storey building and helipad on another contested feature, Erica Reef. The reef dries to enclose a shallow lagoon and some rocks on the eastern rim might remain above high water.54 The feature lies west of Investigator Shoal and about 525 km from the Philippine city of Puerto Princesa. The Philippines lodged a diplomatic protest on 20 August.55 Senate President Blas Ople called for a stronger protest by the Department of Foreign Affairs compared to that lodged against the occupation of Investigator Shoal, including a demand that the structures be dismantled and Malaysia leave the reef.56 Undermining the force of Ople’s remarks, however, was Philippines Defence Secretary Orlando Mercado’s August admission that Erica Reef lay outside the country’s claimed EEZ and within Malaysia’s.57 Mercado offered no evidence to support this conclusion. Expressing surprise that the structures had been discovered so late as their location had been disclosed two months earlier,58 the Malaysian Embassy in Manila robustly defended the occupation of both Investigator Shoal and Erica Reef. In particular, it referred to their location within the country’s continental shelf boundaries as shown in its 1979 map (the Peta Baru; see footnote 1) and its EEZ, as well as historic and legal bases in support of sovereignty. In addition, the Embassy asserted that no features within Malaysia’s maritime boundaries are part of the Spratlys.59 Manila rejected these assertions and threatened to take the matter to the United Nations.60
53 Ibid.; “Manila drops plan to build structures in the Spratlys”. 54 Hancox and Prescott, A Geographical Description of the Spratly Islands, p. 18. 55 “Philippines hands protest note to Malaysia”, Associated Press, 20 August 1999. 56 “Philippine Senate head wants Malaysia to tear down Spratlys structures”, Agence France-Presse, 20 August 1999. 57 “Stronger protest vs Malaysian moves in Spratlys needed, DFA told”, BusinessWorld (Philippines), 23 August 1999. 58 Ibid. 59 Malou Talosig, “Reefs within our territory – Malaysia”, Gulf News, 23 August 1999. 60 Yasmin Lee G. Arpon, Norman P. Aquino and Cathy Rose A. Garcia, “Manila to seek UN intervention in maritime tiff with Malaysia”, BusinessWorld (Philippines), 24 August 1999; “Philippines considers taking Spratlys row with Malaysia to United Nations”, Bernama, 23 August 1999; “RP mulls UN option”, Manila Standard, 23 August 1999.
123 Seeking to calm the situation, Malaysian Foreign Minister Syed Hamid Albar stated:
We will not take action that will raise tension nor do we have any intention to use the islands for purpose of aggression. The Philippines can take whatever action they want. Our position is clear. (The reef and shoal) are within Malaysian territory. We are there for peaceful purposes.61
The suggestion that Malaysia’s action in Investigator Shoal and Erica Reef was retaliation for President Estrada’s support for former Deputy Prime Minister Anwar Ibrahim was dismissed by Kuala Lumpur.62 Indeed, following advice from former president Ramos and Foreign Affairs Secretary Siazon about potential damage to Philippine interests in Malaysia and to ASEAN solidarity, Estrada sought to limit the fallout caused by his perceived interference in Malaysia’s internal affairs.63
In late October 1999 tension re-surfaced when two Malaysian Hawk fighters reportedly intercepted an equal number of Philippine Bronco planes near Investigator Shoal.64 Philippines Foreign Affairs Secretary Domingo Siazon and Defence Secretary Orlando Mercado as well as Malaysia’s Defence Minister, Abang Abu Bakar Abang Mustpha, played down reports of a standoff.65 The timing of the alleged standoff may have been an attempt to re-focus attention on the contested feature immediately prior to a two-day visit to Manila by Malaysian Foreign Minister Syed Hamid Albar. The incident did not halt bilateral co-operation on functional issues. In November, for example, naval vessels from the two countries conducted
61 “No cause for tension over Spratlys, Malaysia says”, Asian Political News, 30 August 1999. See also “Malaysia not contributing to tension in Spratlys: minister”, Agence France-Presse, 24 August 1999. 62 Tiglao, “Seaside Boom”, p. 14. 63 Emil P. Bolongaita, Jr., “The Philippines. Consolidating Democracy in Difficult Times”, Southeast Asian Affairs 1999, 1999, p. 250; “Philippines says Malaysia’s friendship matters”, Reuters, 16 October 1999; “Philippines moves to normalize ties with Malaysia”, Agence France-Presse, 21 October 1998. 64 Huw Watkin, “Tensions increase after air stand-off – Warplanes come close to firing over reef”, South China Morning Post, 1 November 1999. 65 Gilbert Felongco, “Siazon shrugs off standoff reports over Spratlys”, Gulf News, 4 November 1999; “No stand-off with RMAF warplanes”, The New Straits Times, 2 November 1999, “Philippines official denies encounter with Malaysian jets in Spratlys”, Philippine Star, 1 November 1999.
124 an eight-day live fire military exercise offshore from Palawan within the framework of their 1994 defence co-operation agreement.66
Malaysia’s occupation of Investigator Shoal and Erica Reef established its northeastern-most presence in the Spratlys. Arrayed behind them are features occupied previously by Malaysia: Ardasier Reef, Dallas Reef, Louisa Reef, Mariveles Reef, Royal Charlotte Reef and Swallow Reef67 (See Figure 8, Chapter 3). Investigator Shoal is only 80 km from Malaysia’s principal Spratlys outpost of Swallow Reef, making resupply straightforward.68
Several cues for Malaysia’s move on Investigator Shoal and Erica Reef can be suggested. First, China’s 1995 and 1998 actions in Mischief Reef demonstrated the benefits of pro-activity. In seizing a contested feature and building permanent structures, the reality of possession makes dislodgement by diplomatic, legal, military or moral pressure a difficult task. Prime Minister Mahathir appeared to recognise the value of pre-emption when he stated that Malaysia built on Investigator Shoal as it feared other countries would resort to such action as had occurred on several other reefs in the past.69
At the same time, China’s actions in Mischief Reef gave pause for reflection in Kuala Lumpur.70 A number of senior figures in the Malaysian military did not agree entirely with the view championed by Mahathir that China is unthreatening to
66 “Philippines, Malaysia end 8-day naval exercises”, Asian Political News, 22 November 1999. 67 These features are identified as occupied by Malaysia in Valencia, van Dyke and Ludwig, Sharing the Resources of the South China Sea, p. 36. 68 Tiglao, “Seaside Boom”, p. 14. Malaysia occupied Swallow Reef in May 1983. It is used as a tourist resort as well as the Royal Malaysian Navy’s forward base in the Spratlys. An extended runway and new control tower on the reef were to be completed in April 2003. See Sager Ahmad, “Island airstrip to get new control tower”, The New Straits Times, 14 May 2002; Lee Yong Leng, “The Malaysian-Philippine Maritime Dispute”, Contemporary Southeast Asia 11(1), 1989, p. 71. 69 “Structure is on Malaysian Territory – Dr. Mahathir. 70 Although as Amitav Acharya notes, Malaysia’s defence planners had already elevated the Spratly’s dispute to a high priority following the 1988 clash in the area between China and Vietnam. Amitav Acharya, “Containment, Engagement, or Counter-Dominance? Malaysia’s response to the rise of China” in Alastair Iain Johnston and Robert S. Ross (eds), Engaging China. The Management of an Emerging Power, Routledge, London and New York, 1999, p. 133.
125 Kuala Lumpur’s security interests.71 In November 1995, for example, Army chief General Datuk Che Md. Noor Mat Arshad stated that despite friendly overtures China’s long-term aim was dominance, although not necessarily aggression.72 Another sign of watchfulness was the August 1995 strengthening of capabilities in Naval Region Two covering east Malaysia and the Spratly Islands through the stationing of a second squadron of six patrol craft at Labuan Island naval base offshore from Sabah.73 The vessels were thought to be Jerong-class fast attack boats, newer, better armed and with longer endurance at sea than the pre-existing squadron.74 Subsequently, in January 1996 the defence minister signaled that 200 million ringgit would be spent to complete a new navy base at Tanjung Kiamsam on Labuan Island.75 These developments extended initiatives launched previously by the Malaysian air force on Labuan, including upgrading the runway and service facilities and an inaugural whole-of-operational force level exercise to evaluate readiness to counter hostilities in the Spratlys.76
Several Malaysian analysts also expressed concern about China’s intentions in the South China Sea/Spratlys. In Joon-Num Mak’s view “[n]o matter what twists and turns Sino-Malaysian relations may take, it can be argued that Malaysia has, and will in the foreseeable future, regard China as its greatest threat in one form or
71 Abdul Razak Baginda asserts for example that “Malaysia’s official perception has been very much influenced by the views of Prime Minister Mahathir, who has consistently refused to countenance the idea of a ‘China threat’, adopting a much more sanguine outlook towards the PRC. This was very clear when the prime minister publicly announced that China did not pose a threat to the country’s security.” Abdul Razak Baginda, “Malaysian Perceptions of China: From Hostility to Cordiality” in Herbert Yee and Ian Storey (eds), The China Threat: Perceptions, Myths and Reality, RoutledgeCurzon, London and New York, 2002, p. 242. A recent speech by Mahathir on relations between China and Southeast Asia is “China – A Challenge or an Opportunity for ASEAN”, Speech by the Prime Minister The Hon. Dato Seri Dr. Mathathir bin Mohamad at the 8th Nikkei Conference on the Future of Asia, Tokyo, Japan, 21 May 2002, <
126 another.”77 Mak argues that Malaysia’s view of the China threat has shifted from the internal to the external sphere, centred on the South China Sea and the Spratly Islands in particular.78 B.A. Hamzah, formerly Director-General of the Maritime Institute of Malaysia, also worries about China’s objectives in the South China Sea, suggesting its goal is to dominate the area consonant with Beijing’s view of it as its own lake.79 At the same time, Hamzah asserts that China has sought to de-couple its sovereignty claim to the South China Sea from other regional strategic interests such as economic relations and technology transfer.80 Abdul Razak Baginda suggests the Spratlys dispute and a potential China threat played a contributory role in decisions about modernisation of the Malaysian armed forces.81
A second cue was the development of a code of conduct in the South China Sea (see Chapter 7). The November 1998 ASEAN Summit Meeting in Hanoi urged the development of such an instrument and in May 1999 the Philippines and Vietnam began to prepare a draft. The consultation process associated with the work provided Malaysia, and the other ASEAN claimants, the opportunity to consider the implications of the draft code’s provisions for its interests in the Spratlys. This included proposed provisions prohibiting occupation of presently unoccupied features and no construction of new structures. Pre-emption by Kuala Lumpur in occupying the two features would result in a fait accompli before the detailed negotiation of the code commenced. As shown by China in Mischief Reef, once a feature was in the possession of a claimant it was difficult to return to the status quo ante.
77 J.N. Mak, “The Chinese Navy and the South China Sea: A Malaysian Assessment”, The Pacific Review 4(2), 1991, p. 150. 78 Ibid., pp. 150-51. 79 B.A. Hamzah, “Possible Triggers of Conflict in the South China Sea”, Paper presented at the International Conference on Promoting Trust and Confidence in Southeast Asia: Cooperation and Conflict Avoidance, Manila, 16-19 October 1997, p. 4. See also B.A. Hamzah, “Cloud of gloom over Spratlys”, The New Straits Times, 11 January 1996; B.A. Hamzah, “China’s strategy”, Far Eastern Economic Review, 13 August 1992, p. 22. 80 Hamzah, “Possible Triggers of Conflict in the South China Sea”, p. 5. 81 Baginda, “Malaysian Perceptions of China”, p. 239 and pp. 241-42. He acknowledges that the Malaysian military may have ‘captured’ the Spratlys issue and a potential China threat to enhance its arguments justifying modernisation of the armed forces. Amitav Acharya makes a similar point: see Acharya, “Containment, Engagement, or Counter-Dominance?”, p. 134.
127 After Malaysia occupied the two features it kept a low profile. This was understandable given that Kuala Lumpur had clearly breached the 1992 ASEAN Declaration on the South China Sea, which Foreign Minister Badawi had signed on 22 July. In particular, Paragraph 2 of Declaration committing all parties to exercise restraint to promote a positive climate for resolving all disputes.82 After Investigator Shoal and Erica Reef Malaysia did not occupy any further features, contrary to media reports. Nor did not take a leadership role in discussions about the dispute in ASEAN, the ARF or the informal Workshop on Managing Potential Conflicts in the South China Sea. In 2002 Kuala Lumpur adopted a higher profile by brokering a non-binding declaration of conduct in the South China Sea. The declaration did not define the “South China Sea” -- whether inclusive or exclusive of the Paracels and the Spratlys -- and nor did it prohibit construction or expansion/reinforcement of structures on features already occupied (see Chapter 7). Malaysia had sought these omissions from the original draft code of conduct prepared by the Philippines in 1999.
Kuala Lumpur relies on several pillars in support of its claim in the Spratlys, namely extension of its continental shelf, and discovery and occupation.83 Weaknesses in the former argument have prompted Malaysia to place greater emphasis on the discovery and occupation pillar84 (see also Chapter 3). This is not without problems, however, because proof of effective control over time and acquiescence by other states is also required.85
Here it is relevant to consider the implications of the 17 December 2002 majority judgment by the ICJ concerning sovereignty over Sipadan and Ligitan Islands.86 In 1996 Malaysia and Indonesia agreed to bring their dispute over ownership of the islands to the ICJ. The case was heard from 3-12 June 2002. In the absence of unambiguous evidence by either party of treaty-based title, the court
82 ASEAN Declaration on the South China Sea (1992), Manila, Philippines, 22 July 1992, Paragraph 2, <
128 awarded sovereignty over the islands to Malaysia based on its stronger claims of effectivités87 demonstrating effective and continuous possession and administration.88 Relating this and previous ICJ decisions to the case of the Spratlys dispute, Mark Valencia notes that:
[i]n the absence of a clear allocation by a treaty, the decisions taken together all but ignore “discovery”, “historic” claims and contiguity in favour of specific evidence of continuous, effective occupation, administration or control over a considerable period of time and the absence of protest from others or their successful exclusion from the area. On this basis, all the claims to the Spratlys as an island group have significant weaknesses.89
An important point made by the ICJ in the Sipadan-Ligitan Islands case concerns the legal weight accorded to maps to support title claims (Paragraph 88 of the judgment). The judgment notes that:
maps merely constitute information which varies in accuracy from case to case; of themselves, and by virtue solely of their existence, they cannot constitute a territorial title, that is, a document endowed by international law with intrinsic legal force for the purpose of establishing territorial rights. Of course, in some cases maps may acquire such legal force, but where this is so the legal force does not arise solely from their intrinsic merits: it is because such maps fall into the category of physical expressions of the will of the State or States concerned. This is the case, for example, when maps are annexed to an official text of which they form an integral part. Except in this
87 Translated in English as effectivity, Charles De Visscher notes that the concept still lacks a clear explanation. He goes on to state that “[t]erritorial appropriations are the chosen domain of effectivity. Consolidated by the passage of time they create objective situations good against all States. Long merely an exercise of armed force leading to conquest, territorial appropriation, becoming peaceful, was gradually subjected to rules of positive law for which effectivity always provided the foundation. … Apart from the occupation of uninhabited and unappropriated land, the constitutive elements of effective possession underwent progressive legal formulation. Even the material side of possession figures in today’s case-law less as a mere physical taking of possession than as the regular and peaceful exercise of State functions with the corollary of international duties. Thus understood, effectivity is a legal construct, a guarantee of order and stability which confers a title to sovereignty valid erga omnes.” In addition, “[i]f both parties rely upon facts of possession, the judge will consider which of the facts cited show the higher degree of effectivity and therefore, failing absolute proof, constitute a “better title”. Effectivity may thus be only relative.” Charles De Visscher, Theory and Reality in Public International Law, Revised Edition, Translated from the French by P.E. Corbett, Princeton University Press, Princeton, 1968, p. 318, p. 320 and p. 330. The quotes are sourced from the two latter pages respectively. 88 International Court of Justice, Case Concerning Sovereignty over Pulau Ligitan and Pulau Sipadan, pp. 52-59, Paragraphs 126-149. 89 Mark J. Valencia, “The Spratlys Islands Dispute”, Far Eastern Economic Review, 9 January 2003, p. 21.
129 clearly defined sense, maps are only extrinsic evidence of varying reliability or unreliability which may be used, along with other evidence of a circumstantial kind, to establish or reconstitute the real facts.90
This has implications for the Spratlys dispute where several claimants refer to maps of varying age and provenance to support their sovereignty (and jurisdictional) claims.91 Malaysia appears to rely on its claimed maritime boundaries shown in the Peta Baru. As Haller-Trost notes, “Malaysia argues for ownership over certain islands and reefs in the southern part of the South China Sea on the basis that the insular features are situated within the (unilaterally declared) boundaries of its continental shelf”.92 She underlines her point by reference to remarks made in February 1988 by Malaysia’s then Deputy Foreign Minister Abdullah Fadzil Che Wan:
[t]he islands and atolls [claimed by Malaysia in the southern Spratlys] are under Malaysian sovereignty, and Malaysia has in the past reaffirmed its jurisdiction … They are within Malaysia’s continental shelf area and Malaysia’s sovereignty over them has been officially declared through the new Map of Malaysia, published on December 21st, 1979 … (emphasis added.)93
The inference from Paragraph 88 in the Sipadan-Ligitan judgment is that the Peta Baru in itself is not a strong pillar in support of a title claim. This is in addition to the problem identified by Haller-Trost: Malaysia’s argument is contrary to the
90 International Court of Justice, Case Concerning Sovereignty over Pulau Ligitan and Pulau Sipadan, pp. 42-43, Paragraph 88. This is similar to the view expressed in the court’s judgment concerning the Frontier Dispute between Burkina Faso and the Republic of Mali and the Beagle Channel Arbitration between Argentina and Chile. On the former see International Court of Justice, Case Summaries, Case Concerning the Frontier Dispute (Burkina Faso/Republic of Mali), Judgment of 22 December 1986, Part VII, Paragraph 2, <
130 usual understanding in international law that sovereignty generates the right to maritime zones, not vice versa.94
Paragraph 135 of the Sipadan-Ligitan judgment notes that acts occurring after the date on which the dispute between the parties crystallised cannot be taken into account “unless such acts are a normal continuation of prior acts and are not undertaken for the purpose of improving the legal position of the Party which relies on them”95 (emphasis added). This invokes the concept of critical date, meaning the definition of “a fixed date on which the sovereignty of the parties concerned can be established.”96 As Greg Austin observes, “[t]here cannot be more than one critical date in a territorial dispute.”97
The implication of Paragraph 135 is that after the critical date acts on which a party relies to bolster the legal basis of its sovereignty claim do not influence the determination of title. Malaysia asserted, however, “that a tribunal may always take into account post-critical date activity if the party submitting it shows that the activity in question started at a time prior to the critical date and simply continued thereafter.”98 (emphasis added.) The pivotal issue is determining the critical date. In the case of the Spratlys dispute the parties have yet to agree or even advance a critical date.99 Austin identifies six possible critical dates: 1939, when Japan seized the islands from France; 1946, when the dispute between China and France “crystallised”; 1951, when (South) Vietnam entered the fray; 1971, when China alone sustained a claim; 1978, when the Philippines joined the dispute; and 1979, when Malaysia’s claim emerged following publication of the Peta Baru showing its continental shelf boundaries.100 Following the argument of Paragraph 135 in the Sipadan-Ligitan judgment, if 1979 is accepted as the critical date then Malaysia’s
94 Ibid., pp. 225-26. 95 International Court of Justice, Case Concerning Sovereignty over Pulau Ligitan and Pulau Sipadan, p. 56, Paragraph 135. 96 Haller-Trost, The Contested Maritime and Territorial Boundaries of Malaysia, p. 120. On p. 121 of her book she restates the seven factors identified by Judge Fitzmaurice of the International Court of Justice concerning establishment of the critical date. 97 Austin, China’s Ocean Frontier, p. 40. 98 International Court of Justice, Case Concerning Sovereignty over Pulau Ligitan and Pulau Sipadan, p. 54, Paragraph 129. 99 Austin, China’s Ocean Frontier, p. 133. 100 Ibid. Austin goes on to present a detailed analysis of each possible critical date.
131 seizure of Investigator Shoal and Erica Reef in 1999, twenty years later, is unlikely to bolster its claim to the two features.
Factors motivating Malaysia’s claim in the southern part of the Spratlys include national security and the economic value of maritime resources.101 In relation to the former, Chief of Defence Forces General Hashim Mohamad Ali noted in 1989 that the South China Sea/Spratlys issue had now become a top priority for the military.102 His comment came not only in the wake China’s 1988 clash with Vietnam in the Spratlys but also reinforced the emphasis on the navy and airforce in Malaysia’s shift from an internal to an external threat deterrent focus.103 The contours of this strategic shift are outlined below.
Malaysia’s national security policy has six objectives.104 They are preservation of the Constitution, including recognition of the Sultans, Islam, the special rights of the Malays and the rights of the other races; preservation of national unity and harmony; economic development as an integral component of security; vigilance against internal threats to security; protection of sovereignty and territorial integrity; and promotion of a stable and peaceful local, regional and global environment.105 Several measures give effect to these objectives.106 First, the concept of comprehensive security. This views the combination of political, military, economic, social, cultural and psychological elements as integral to national security.107 It underscores the government’s “development as security” perspective. Second, promotion of national unity through adoption of the Rukunegara, or
101 Maritime Institute of Malaysia, MIMA Annual Report 1994, Kuala Lumpur, 1995 cited in Chandran Jeshurun, “Malaysia: the Delayed Birth of a Strategic Culture” in Ken Booth and Russell Trood (eds), Strategic Cultures in the Asia-Pacific Region, MacMillan Press Ltd and St. Martin’s Press, Inc., Basingstoke, London and New York, 1999, p. 227; Khadijah and Tunku, “Scramble for the South China Sea: The Malaysian Perspective”, p. 237. 102 “Malaysia: preparing for change”, The JDW Interview, Jane’s Defence Weekly, 29 July 1989, p. 159. Hashim Mohamad Ali is a brother-in-law of Prime Minister Mahathir. 103 On challenges associated with the shift in Malaysia’s defence strategy see Richard Stubbs, “Malaysian Defence Policy: Strategy versus Structure”, Contemporary Southeast Asia 13(1), 1991, pp. 44-56. 104 Andrew Tan, Malaysia’s Security Perspectives, Working Paper No. 367, Strategic and Defence Studies Centre, The Australian National University, Canberra, 2002, p. 26. 105 Ibid. 106 The following is a summary of ibid., pp. 26-30. 107 See also Mohamad Najib Abdul Razak, Defending Malaysia. Facing the 21st Century, ASEAN Academic Press, London, 2001, chapter 6, especially pp. 55-58.
132 guidelines for ethnic co-existence. Adopted on 31 August 1970, its elements are belief in God, loyalty to King and country, upholding the constitution and rule of law and good behaviour and morality. Third, endorsement and implementation of Prime Minister’s Mahathir’s Vision 2020 strategy to propel Malaysia to developed country status by the year 2020.108 Third, a pragmatic foreign policy. Fourth, a robust approach to maintaining internal security. And lastly, a focus on self-reliance, regional co-operation and external assistance to deter external threats.
For Malaysia, self-reliance means the capability to handle internal security problems and to protect territorial integrity and security interests in its immediate vicinity from low to medium level external threats.109 In this respect, defence modernisation, launched in 1979110 and deepened by the signing of a £1 billion procurement contract with the United Kingdom in 1988,111 plays an important role. The objective of the modernisation programme is to re-focus the Malaysian Armed Forces (MAF) from internal security towards a conventional military capability.112 The military’s organisational framework was restructured, joint service operations were emphasised and arms procurement stressed defence against potential external threats.113 Closely monitored and sometimes matched are weapons purchases by Indonesia and, in particular, Singapore.114
Malaysia has border or maritime disputes with all its neighbours.115 Since the early 1990s, however, the defence focus has been the maritime domain rather than land-based threats.116 As Mak Joon-Num notes, “[t]he new arena of regional tension was now the sea. … The disputes in the Spratlys, to which Malaysia is a party,
108 Mahathir’s speech to the Malaysian Business Council that launched the Vision is contained in a document entitled “Working Paper – The Way Forward”. Available on the Prime Minister’s web site at <
133 seemed to emphasize the need for maritime forces.”117 Malaysia’s vulnerability arises from a lengthy coastline and the maritime gap in the South China Sea that separates the peninsula from the states of Sabah and Sarawak located on Borneo.118 A further factor is the need to monitor and protect resources within the country’s claimed EEZ of 475,600 km2.119 The priority on the marine environment has been a mixed blessing for the navy.120 While extra funds for new equipment and their integration have become available, the extra responsibility of policing the country’s extensive EEZ has distracted the navy from its principle warfighting role.121 The end of the Cold War also posed a challenge to Malaysia’s defence planners, in particular the security implications of a reduced US maritime presence and the potential for the Chinese navy to increase its influence, including in the Spratlys.122
In the Sixth Malaysia Plan (1991-1995) six billion ringgit was allocated to the defence sub-sector,123 partly to fund improvements in “the capability and efficiency of the country to control and safeguard the Exclusive Economic Zone.”124 By the 1993 mid-term review of the plan the defence allocation had jumped to 8.4 billion ringgit,125 and it reached 9.2 billion ringgit by the end of the plan’s lifespan,126 a 53.3 per cent increase over the original allocation. Funding creep was evident also in the Seventh Malaysia Plan (1996-2000). Under this Plan seven billion ringgit was
117 Ibid., p. 38. 118 Jeshurun, “Malaysia: the Delayed Birth of a Strategic Culture”, p. 227. 119 Mak, “The Modernization of the Malaysian Armed Forces”, p. 35. Figure for area of Malaysia’s EEZ sourced from Abdul Hamid Saharuddin, “National ocean policy – new opportunities for Malaysian ocean development”, Marine Policy 25(6), 2001, p. 427. 120 J.N. Mak, “The maritime priorities of Malaysia” in Ross Babbage and Sam Bateman (eds), Maritime Change. Issues for Asia, Allen and Unwin, St. Leonards, 1993, p. 119. 121 Ibid. 122 Ibid., p. 120; Mak, “The Modernization of the Malaysian Armed Forces”, pp. 37-38. 123 Government of Malaysia, Economic Planning Unit, Prime Minister’s Department, Mid-term Review of the Sixth Malaysia Plan 1991-1995, Percetakan Nasional Malaysia Berhad, Kuala Lumpur, 1993, p. 32, Table 2-8. Note that in the Malaysia Plans defence is one of the two components of the broader Security sector, the other element being internal security. 124 Government of Malaysia, Ministry of Finance, Economic Report 1990/91, Kuala Lumpur, 1990, p. 28 cited in Desmond Ball, “Arms and Affluence. Military Acquisitions in the Asia-Pacific Region”, International Security 18(3), 1993, p. 90. 125 Government of Malaysia, Economic Planning Unit, Prime Minister’s Department, Mid-term Review of the Sixth Malaysia Plan 1991-1995, p. 32, Table 2-8. Clearly the money was not exclusively for maritime defence purposes. As the mid-term review notes, the expenditure was to replace outdated equipment, provide better training facilities for the armed forces and the police and to prepare armed forces personnel serving in UN peace-keeping operations: ibid., p. 33, Paragraph 2.22. 126 Government of Malaysia, Economic Planning Unit, Prime Minister’s Department, Seventh Malaysia Plan 1996-2000, Percetakan Nasional Malaysia Berhad, Kuala Lumpur, 1996, p. 177, Table 6-3.
134 allocated to defence127 but actual expenditure totalled 9.5 billion ringgit,128 a 35.7 per cent rise. The Eighth Malaysia Plan (2001-2005) earmarked 8.75 billion ringgit for defence.129 Defence Forces Chief Jen Tan Sri Datuk Seri Mohd. Zahidi Zainuddin signalled that a large part of the allocation would go to the army,130 rebalancing the air force’s and navy’s funding ascendancy in recent times and possibly a reflection of a more uncertain internal security situation in the context of the global war on terrorism.
Malaysia’s defence spending, as for other countries in the region, has largely shadowed domestic economic trends.131 Between 1990 and 1997 the country’s average annual growth in gross domestic product (GDP) was 8.7 per cent.132 In the same period, expenditure in the defence sector climbed from almost 4.9 billion ringgit to 8.9 billion ringgit.133 The quantity and quality of defence procurement rose appreciably. This included purchases of Hawk, F/A-18D Hornet, MiG 29 and C-130 aircraft, acquisition of a mid-air refuelling capability and procurement of two guided missile frigates and four guided missile corvettes.134 In 1998 GDP declined to -7.5 per cent135 and was mirrored by a drop in defence expenditure to 7.2 billion
127 Ibid. 128 Government of Malaysia, Economic Planning Unit, Prime Minister’s Department, Eighth Malaysia Plan 2001-2005, Percetakan Nasional Malaysia Berhad, Kuala Lumpur, 2001, p. 164, Table 6-3. 129 Ibid. 130 “MAF celebrates 67th birthday in era of digital warfare”, Daily Express, 15 September 2000. 131 See for example, Defence Intelligence Organisation, Department of Defence, Defence Economic Trends in the Asia-Pacific 2001, Commonwealth of Australia, Canberra, 2002, p. 5. In particular, graph thereon comparing growth in defence expenditure versus growth in GDP. Report available at <
135 ringgit.136 Some procurement was deferred or cancelled.137 For example, the purchase of helicopters and additional offshore patrol vessels was delayed and a submarine deal cancelled.138
As the economy rebounded so did procurement plans.139 In late 2001 Defence Minister Najib Tun Abdul Razak stated that Malaysia would spend between US$3 billion and US$4 billion on advanced weapons procurement between 2002 and 2005.140 All three services have ambitious purchasing plans.141 The focus here is on major air and naval purchases because of their role in maritime surveillance and defence. Combining these functions can pose difficulties. Mak Joon-Num asserts, for example, that balancing the dual roles of resource protection and warfighting has retarded the evolution of Malaysia’s navy.142 In this context, the in-principle agreement to establish a coast guard to handle fisheries enforcement, pollution control and similar types of constabulary duties should help.143
Following a lengthy period of evaluation, Kuala Lumpur confirmed that it expects to sign agreements in 2003 to purchase American F/A-18E/F Super Hornet strike aircraft and Russian Sukhoi Su-30MK fighters.144 A deal to purchase eighteen of the latter aircraft was concluded in August 2003 during President Putin’s visit to Malaysia; the planes will be delivered in two batches between 2006 and 2007.145 The
136 Asian Development Bank, Key Indicators 2002, p. 237. See category titled “Expenditure by Function, Central Gov’t” and then sub-sector titled “Defence”. 137 Tan, Malaysia’s Security Perspectives, p. 34 and p. 36. 138 Tow, Asia-Pacific Strategic Relations, p. 134. 139 Tan, Malaysia’s Security Perspectives, pp. 36-37. 140 S. Jayasankaran, “Malaysia. Call for Arms”, Far Eastern Economic Review, 16 May 2002, p. 20. 141 See discussion in Robert Karniol, “Balancing act. Country Briefing: Malaysia”, Jane’s Defence Weekly, 3 April 2002, pp. 23-27. 142 Cited in ibid., p. 26. See also Mak, “The Modernization of the Malaysian Armed Forces”, p. 46. Elsewhere Mak notes “it is clear that the RMN [Royal Malaysian Navy] cannot hope to provide both maritime security and prepare the fleet for hostilities in an increasingly uncertain world.” (emphasis in original.) Further on he suggests that “[a]gainst the PLAN [People’s Liberation Army Navy], it is doubtful that the RMN could even give the Chinese Navy a bloody nose.” The two latter quotes are from Mak, “The maritime priorities of Malaysia”, p. 121 and p. 122 respectively. 143 Dzirhan Mahadzir, “New equipment for Malaysia but manpower shortage looms”, Asia-Pacific Defence Reporter 28(2), 2002, p. 9. 144 Gordon Bendall, “Malaysia’s air power capabilities to soar with Su-30MK/Super Hornet purchases”, Asia-Pacific Defence Reporter 29(1), 2003, p. 26. 145 Dmitry Pieson, “Malaysia buys Sukhoi fighters, other Russian military equipment”, Aerospace Daily, 6 August 2003; “Putin praises contract on fighters’ supplies to Malaysia”, ITAR-TASS World Service, 6 August 2003; Viktoria Sokolova, “Russia, Malaysia sign contract for deliveries of Su-30 from 2006”, ITAR-TASS World Service, 5 August 2003.
136 mix of aircraft upgrades the existing fleet, with differing rationales advanced for the choice. On the one hand, Malaysian officials cited matching of aircraft already in operation with regional air forces. Others suggested the reasons were price, a desire to balance politically and economically between Russia and the US and the former’s willingness to supply “beyond visual range” medium range air-to-air missiles as part of the deal whereas the US was not.146
In 1999 a new generation, blue water-capable patrol boat, the 91 metre long MEKO 100, was ordered from the Blohm and Voss-led German Naval Group under a 5.35 billion ringgit (US$1.4 billion) contract that also includes a technology transfer component.147 Initially six vessels will be supplied, the first two to be delivered in June 2004 and the remaining four to be built in Malaysia.148 In all, 27 boats will be built over the next 15 years.149
Malaysia’s interest in submarines dates from the late 1980s.150 It was only on 6 June 2002, however, that this translated into a purchase following the signing of a US$972 million dollar contract with France’s Direction des Constructions Navales (DCN) International and Spain’s IZAR Construcciones Navales for supply of a refurbished Agosta 70 for training purposes and two new Scorpene (Scorpion) class conventional attack submarines.151 The latter has a diving depth of 300 metres, is able to stay at sea for 50 days and travel 6,400 nautical miles.152 To be based at Sepangar Bay near Kota Kinabalu in Sabah,153 the first Scorpene will be delivered in 2007 and the second a year later.154 More than half of the Scorpenes’ cost will be
146 Bendall, “Malaysia’s air power capabilities to soar with Su-30MK/Super Hornet purchases”, pp. 26-27. 147 Karniol, “Balancing act. Country Briefing: Malaysia”, p. 27. 148 Ibid. 149 M.G. Mahmud, “Exclusive Interview. Dato’ Sri Mohd. Najib Tun Abdul Razak, Minister of Defence, Malaysia”, Asian Defence Journal 4/2002, 2002, p. 18; Sengupta, “The MAF and Force Modernisation Challenges in the Post-Cold War Era”, p. 20. 150 John Dikkenberg, “The Malaysian Scorpion – a submarine with regional implications”, Asia- Pacific Defence Reporter 28(9), 2002-2003, p. 43. 151 Ibid., p. 42; Elmer Connolly, “Scorpenes to Patrol Malaysian Seas”, Asian Defence Journal 7 and 8, 2002, p. 32; Jalina Joheng, “RMN to buy two attack submarines for RM3.4b”, The New Straits Times, 6 June 2002. An engaging account of the contract preparations on the Malaysian side is S. Jayasankaran, “The Defence Industry. Wanna Buy a Sub?”, Far Eastern Economic Review, 15 August 2002, pp. 16-17. 152 Dikkenberg, “The Malaysian Scorpion”, p. 42. 153 Ibid; Joheng, “RMN to buy two attack submarines for RM3.4b”. 154 Dikkenberg, “The Malaysian Scorpion”, p. 42.
137 offset by payment in Malaysian commodities, including palm oil.155 (Part payment in palm oil for Malaysia’s arms purchases is now a condition of any deal according to Defence Minister Najib Tun Abdul Razak.)156 The defence minister and Navy Chief Admiral Abu Bakar Abdul Jamal argued that the submarines would strengthen the navy’s capability to patrol the country’s long maritime border, increase underwater defence possibilities and help protect marine resources.157 Separately, Abu Bakar highlighted the submarines’ deep-water forward defence and escort capabilities. “Of course, it’s true that submarines can be spotted in shallow waters off our coasts, but that is not the area where they will operate”, suggesting operations in the South China Sea and Indian Ocean are envisaged.158 On the escort role, Abu Bakar noted that “[w]e have to bear in mind that 95 per cent of our trade is conducted via shipping; we have to protect our vital assets.”159 While in itself Malaysia’s submarine purchase does not set a precedent, following those of China, Indonesia, Japan, Singapore, North Korea and South Korea,160 the capabilities of Kuala Lumpur’s choice poses questions to neighbours about response.161 More fundamentally, some commentators question whether the costs to develop ever better information technology and stealth capabilities will make submarines unaffordable for small and medium navies in the future.162
155 Ibid., p. 43. 156 In the Minister’s words, “[i]n short they must buy our palm oil if any arms deal is to be successfully negotiated.” See “KL to use palm oil as part payment for arms”, The Straits Times, 8 August 2002; Chong Chee Seong, “Palm oil for arms swap from now”, The New Straits Times, 6 August 2002. 157 Connolly, “Scorpenes to Patrol Malaysian Seas”, p. 32. 158 Quoted in Jasbir Singh, “Submarines meant for deeper waters”, The New Straits Times, 5 January 2002. 159 Ibid. 160 Connolly, “Scorpenes to Patrol Malaysian Seas”, p. 36. See also “S’pore Navy Launches its 4th Submarine”, The Straits Times, 24 May 2001; Michael Richardson, “East Asians Acquiring Submarines to Guard Sea-Lanes”, International Herald Tribune, 15 January 2001. Taiwan is searching for a supplier of eight diesel-electric submarines following President George W. Bush’s approval of their sale in 2001. The problem is that the US no longer builds this type of submarine and no possible supplier has yet offered to do so. See Nathan Nakivell, “Taiwan’s Quest for Diesel Electric Submarines”, Asia-Pacific Defence Reporter 29(2), 2003, pp. 42-44. 161 Dikkenberg, “The Malaysian Scorpion”, p. 43. 162 Graeme Dunk, “2015: will the submarine continue to be relevant?” in David Wilson (ed.), Maritime War in the 21st Century. The Medium and Small Navy Perspective, Papers in Australian Maritime Affairs No. 8, Royal Australian Navy Sea Power Centre, Defence Publishing Service, Department of Defence, Canberra, 2001, pp. 241-48.
138 Protecting Malaysia’s maritime interests is a contribution to the government’s vision of attaining developed country status by 2020.163 In 1990 the maritime sector contributed 33 billion ringgit, or 13 per cent of the country’s total output value.164 Shipping, oil and gas production, fishing and defence have traditionally dominated Malaysia’s use of the marine environment.165 New activities have emerged, including marine eco-tourism and education, sports and recreation and seafood processing.166 Malaysia is also seeking to position itself as a major maritime hub in the region.167 Shipping carries an estimated 90 per cent of the country’s external trade (by value)168 and accordingly freedom of navigation through the sea lines of communication (SLOCs) in the South China Sea, the Malacca Straits and the Sulu Sea is a high priority.169
Beginning in the 1970s, oil and gas production from fields offshore from peninsular Malaysia, Sabah and Sarawak has become an increasingly important revenue earner. By 1980 oil and gas replaced rubber as Malaysia’s major export.170 In 1995 the sector accounted for almost 33 per cent of the government’s total revenue,171 increasing to about 35 per cent in 1998 (or 5.2 per cent of GDP).172 Underlining the finite nature of the country’s oil reserves, however, was an 8 December 2000 report by the Ministry of Finance to Parliament. This noted that between 1995 and 2000 petroleum reserves had dropped from 4.1 billion barrels to
163 B.A. Hamzah and Jenny L.P. Wong, “Current Issues of Marine and Coastal Affairs in Malaysia”, The International Journal of Marine and Coastal Law 12(2), 1997, p. 226. 164 Abdul Aziz Abdul Rahman, Jamali Janib and Wong Hin Wei, The Maritime Economy of Malaysia, Pelanduk Publications, Petaling Jaya, 1997, p. 75. 165 Saharuddin, “National ocean policy – new opportunities for Malaysian ocean development”, p. 427. 166 Ibid. 167 Hamzah and Wong, “Current Issues of Marine and Coastal Affairs in Malaysia”, p. 229. 168 M.R. Othman, “On the road to making Malaysia a maritime nation”, Paper presented at the Third International Maritime Port and Shipping Asia: Challenges of the 21st Century, 21-22 May 1996, Kuala Lumpur cited in Saharuddin, “National ocean policy – new opportunities for Malaysian ocean development”, p. 428. 169 Asian Defence and Diplomacy Editorial Team, “RMN – Sailing on ahead to meet challenges”, Asian Defence and Diplomacy 10(2), 2003, p. 25. 170 B.A. Hamzah, “Malaysia and the Law of the Sea: Post-UNCLOS III Issues” in Choon-Ho Park and Jae Kyu Park (eds), The Law of the Sea: Problems from the East Asian Perspective, Proceedings of Two Workshops of the Law of the Sea Institute held in Seoul, Korea, 30 June-3 July 1981 and 3 July- 6 July 1984, The Law of the Sea Institute, University of Hawaii, Honolulu, 1987, p. 363. 171 Hamzah, Malaysia’s Exclusive Economic Zone, p. 4. 172 Saharuddin, “National ocean policy – new opportunities for Malaysian ocean development”, p. 428.
139 3.4 billion barrels. Moreover, the report indicated that unless new oil fields are brought on-stream self-sufficiency to meet domestic demand will end in 2008.173 This is consistent with analyses by other commentators.174 In this respect the July 2002 discovery of oil approximately 150 km off the Sabah coast in about 1,340 m of water in the Sabah Trough, the first deepwater oil find in the area,175 by the American company Murphy Oil could prove timely. The find, named Kikeh after a fish native to Malaysian waters, has recoverable reserves estimated at 400-700 million barrels of oil. As noted in Chapter 3, a complication is that both Malaysia and Brunei claim the area falls within their respective exclusive economic zones and discussions between Prime Minister Mahathir and the Sultan of Brunei in August 2003 did not resolve the matter. In 2002 Royal Dutch/Shell found a potentially significant oil field in depths of about 300m beneath its existing Kebabangan gas field offshore from Sabah. These discoveries may catalyse further deepwater drilling not only in the immediate area of the Baram delta basin but also further afield in the northwest Palawan basin offshore from the Philippines, China’s Pearl River mouth basin and the Kutei basin in East Kalimantan.176
Energy security concerns were evident in Deputy Prime Minister Abdullah Ahmad Badawi’s June 2002 suggestion that a review be undertaken of the ASEAN Petroleum Security Agreement177 and measures to manage depleting oil reserves in Asia.178 In his view, “[i]t is high time that Asia builds up its own system of energy security through more regional partnerships and cross-border trading
173 Patricia Martinez, “Malaysia in 2000. A Year of Contradictions”, Asian Survey XLI(1), 2001, p. 192. 174 For example, Robert Manning suggests that by 2010-2025 Malaysia could become a net oil importer. See Robert A. Manning, The Asian Energy Factor. Myths and Dilemmas of Energy, Security and the Pacific Future, Palgrave, New York and Basingstoke, 2000, p. 73. 175 Noel Tomnay and Helen Munro, “New Southeast Asia discoveries, drilling suggest growth in deepwater exploration”, Offshore, 1 April 2003; “Malaysia – Deepwater Sabah revives oil hopes”, Lloyd’s List, 15 April 2003. 176 Ibid. 177 Signed in Manila on 24 June 1986, the agreement commits Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand, the six original members of ASEAN, to establish a sharing scheme for crude oil and/or petroleum products in times of shortage and over-supply. For the full text of the agreement see ASEAN Petroleum Security Agreement, Manila, 24 June 1986, <
140 arrangements.”179
Turning to living marine resources, fisheries production provides direct and indirect benefits to Malaysia’s economy. In 1997 revenue from fishing contributed about 1.6 per cent of GDP.180 Indicative of the importance placed on fisheries protection in the EEZ was Agriculture Minister Datuk Mohd Effendi Norwawi’s statement on 28 February 2002 that the cabinet allocated 200 million ringgit (US$53.2 million) for this purpose.181
4.3 Reaching Out: The Philippines and Internationalisation of the Spratly Islands Dispute
“Our strongest weapon against a big nation like China is noise.”
Roilo Golez, National Security Adviser, the Philippines182
Manila cites a number of factors to support its sovereignty claim to what it calls the Kalayaan Island Group in the Spratlys.183 They are proximity to the mainland, significance to national security and economic survival, the area was res nullius after World War II, discovery and occupation and extension of the continental shelf.184 A variety of measures reinforce Manila’s sovereignty claim. They include the April 1982 announcement by the government that any offensive move against Kalayaan would be interpreted as an assault on the country’s sovereignty,185 the statement in its 10 December 1982 declaration on signing the LOSC that the action
179 Ibid. 180 Saharuddin, “National ocean policy – new opportunities for Malaysian ocean development”, p. 429. 181 Quoted in the New Straits Times and cited in Karniol, “Balancing act. Country Briefing: Malaysia”, p. 23. 182 On appealing to the international community as the most effective way to check Chinese moves in the Spratly Islands. Quoted in Far Eastern Economic Review, 15 March 2001, p. 78. 183 The co-ordinates of the group are defined in Presidential Decree No. 1596 Declaring Certain Areas Part of the Philippine Territory and Providing for their Government and Administration, Manila, 11 June 1978. Reprinted in Aileen San Pablo-Baviera (ed.), The South China Sea Disputes. Philippine Perspectives, Philippine-China Development Resource Center and Philippine Association for Chinese Studies, Quezon City, p. 55. 184 Valencia, Van Dyke and Ludwig, Sharing the Resources of the South China Sea, p. 33. 185 Valencia and Jaafar, “Malaysia and Extended Maritime Jurisdiction: The Foreign Policy Issues”, p. 67.
141 “shall not in any manner impair or prejudice the sovereignty of the Republic of the Philippines over any territory over which it exercises sovereign authority, such as the Kalayaan Islands, and the waters appurtenant thereto”,186 the placement of markers on claimed features and destruction of those of other parties and the arrest of foreign fishermen alleged to be fishing illegally in Philippine waters and confiscation of their catch and equipment. In 1999 the Department of Education approved the release to 40,000 government schools of a new atlas of the Philippines that includes the Spratly Islands and Scarborough Shoal.187
Between 1991 and 2002 Manila emphasised an internationalisation approach to broaden support for its Kalayaan claim. This was both rational and pragmatic. Internal weaknesses meant the Philippines had limited capability to exert political, economic or military pressure as tools of foreign policy. In addition, the 1992 eviction of the US military from its bases at Clark and Subic Bay, with the consequent loss of Washington’s de facto security umbrella, exposed the Philippines’ vulnerability to potential external threats. Developments in the international environment also created new challenges, including uncertainty about America’s continued role as guarantor of regional security following the end of the Cold War and the rise of a more assertive and economically powerful China.188 On the other hand, the emergence of new multilateral forums in the 1990s -- the ASEAN Regional Forum (ARF) and the Asia-Europe Meeting (ASEM) -- enlarged possibilities for inter-governmental dialogue on the Spratlys issue, on which Manila had sought to capitalise.
Four administrations span the period covered by this study: Corazon Aquino from 1986 to 1992; Fidel Ramos from 1992 to 1998; Joseph Estrada from 1998 until January 2001; and lastly Gloria Macapagal-Arroyo.189 It was only from the Ramos presidency, however, that the internationalisation approach gained momentum.
186 Declaration of the Republic of the Philippines, 10 December 1982, Paragraph 4. Reproduced in Castro, The Philippines and the Law of the Sea, p. 12A. 187 “Regional Briefing”, Far Eastern Economic Review, 24 June 1999, p. 18. 188 Aileen San Pablo Baviera, “Perceptions of a China Threat: A Philippine Perspective” in Herbert Yee and Ian Storey (eds), The China Threat: Perceptions, Myths and Reality, RoutledgeCurzon, London and New York, 2002, p. 257. 189 On 4 October 2003, Dr. Arroyo confirmed she would stand for re-election in the 2004 presidential election. “The Philippines. Surprise, surprise”, Economist, 11 October 2003, pp. 32-33.
142 Catalysing this were several ‘marker’ events: China’s May 1992 letting of an oil exploration contract to America’s Crestone Energy Corporation in an area claimed also by the Philippines, Taiwan and Vietnam; China’s 1995 occupation of Mischief Reef and subsequent consolidation thereon in 1998 (see Chapter 6); Vietnam’s 1995 letting of a drilling concession in its so-called Blue Dragon area to Mobil; and, as discussed in section 4.2, Malaysia’s 1999 occupation of Investigator Shoal and Erica Reef.
The internationalisation approach also reflected frustration at the lack of progress in bilateral dialogue. For example, despite the conclusion of a bilateral code of conduct with China following its 1995 occupation of Mischief Reef and the establishment in March 1996 of three joint working groups covering fisheries co- operation, marine environmental protection and confidence-building measures, Manila had little to show for its efforts. China consolidated its presence on Mischief Reef in 1998 and remains in firm control of it, the idea of joint use of the facilities on the reef has stalled and the Scarborough Shoal area has emerged as a new area of contention. An indicator of frustration with the bilateral approach was the comment by the chair of the Philippines Senate Foreign Relations Committee, Blas Ople,190 following Malaysia’s occupation of Erica Reef. In pushing for a stronger statement by the Department of Foreign Affairs, Ople noted: “If the diplomatic protest echoes an earlier one [concerning Investigator Shoal], which is to ask Malaysia to reconsider its action and ask for self-restraint, the Malaysians will simply laugh us off.”191 While not forgoing the bilateral track, its disappointing results prompted Manila to place greater emphasis on internationalisation in an attempt to broaden diplomatic support for its position and thereby increase moral pressure on the other claimants.
Manila’s internationalisation approach has two elements: the intra-regional and the extra-regional. Intra-regionally, meaning Southeast Asia, ASEAN has long
190 On 30 July 2002 Ople became Secretary of Foreign Affairs. 191 “Stronger protest vs Malaysian moves in Spratlys needed, DFA told”, BusinessWorld (Philippines), 23 August 1999.
143 held a central place in the Philippines’ foreign policy priorities.192 Not only is Manila a founding member of the organisation but also in the post-Marcos era successive presidents have continued to view ASEAN as the top foreign policy priority, making a point of visiting member countries expeditiously following their inauguration.193
As early as 1990 the Philippines highlighted the issue of regional security.194 In his opening address to the 25th ASEAN Ministerial Meeting, held in July 1992 in Manila, President Ramos reiterated the need for a solution to the overlapping claims in the South China Sea and for the United Nations to play a stronger role in conflict resolution.195 For Manila, a positive outcome of the meeting was the adoption by ASEAN foreign ministers of a Declaration on the South China Sea. This urged all parties to resolve peacefully all sovereignty and jurisdictional issues relating to the Sea and to exercise restraint to create a positive environment for the eventual resolution of all disputes.196 Subsequently, in March 1995 Manila successfully pushed for a statement by ASEAN foreign ministers in response to China’s occupation of and construction on Mischief Reef.197 While China was unnamed, it was clear to whom the statement was directed. ASEAN’s united stance was displayed again at the April 1995 meeting in Hangzhou between ASEAN vice foreign ministers and their Chinese counterpart.
ASEAN’s interest in the South China Sea/Spratlys dispute was lukewarm by the time of the second Mischief Reef episode in 1998. Unlike in 1995, the Philippines found it difficult to rally support in ASEAN. The organisation’s priority
192 For example, in August 1976 President Marcos reviewed Philippine foreign policy since 1966 and identified a list of priorities. Foremost was a deepening and broadening of the country’s relations with ASEAN. Estrella D. Solidum, “Regional Co-operation and ASEAN: The Philippine Experience”, Asian Journal of Political Science 5(1), 1997, p. 62. 193 For example, President Aquino visited Indonesia and Singapore, Ramos Brunei and Thailand, Estrada Singapore and Malaysia and Arroyo Malaysia and Brunei. In November 2001, President Arroyo reaffirmed the importance of ASEAN as one of three realities guiding the country’s foreign policy making (the other two were the trilateral relationship among Japan, China and the US; and the role of the Organization of Islamic Conference). Carlito Pablo, “Gloria names 3 realities guiding RP foreign policy”, Philippine Daily Inquirer, 1 November 2001 194 Evelyn Tan Cullamar, “The Philippines in ASEAN”, Philippines Studies 42, 1994, p. 316. 195 Joint Communique, 25th ASEAN Ministerial Meeting, Manila, Philippines, 21-22 July 1992, Paragraph 8, <
144 was the financial crisis then affecting the region and it did not wish to antagonise China, which had committed itself to not devalue its currency and trigger a potentially damaging spiral of regional devaluations (see also Chapter 6). While the Philippines was not immune from the effects of the financial crisis, it did not suffer to the same extent as several other regional economies.198 As a result Manila was less beholden to China for its stabilisation role. This allowed Manila to voice a stronger call for ASEAN censure of Beijing’s action than might otherwise have been the case.
By 1999, ASEAN unity on the Spratlys issue was fragile. As noted earlier, Malaysia opposed any discussion of its occupation of Investigator Shoal and Erica Reef at the 1999 meeting of ASEAN foreign ministers. Malaysian Foreign Minister Syed Hamid Albar’s preference was for “bilateral issues to be discussed bilaterally.”199 In contrast, Philippines Foreign Secretary Siazon stated “the Spratly issue, of course, will always be discussed here [the ASEAN foreign minister’s meeting]. It’s a main area of concern for many countries.”200 Thailand’s foreign minister Surin Pitsuwan concurred, suggesting that countries other than the claimants had reason to be concerned because any conflict in the South China Sea had implications for the security of international sea lanes. In his view, “[t]his is the [sic] problem for the region as a whole. Opposing claimants may claim that it is an internal issue to be resolved and addressed between us or among us, but the implications of such tension and conflict would be adverse to all of us.”201
The establishment of the ARF in 1994 provided a second avenue for Manila to broaden its outreach to the region. It was frustrated, however, by both Malaysia and China who argued that the ARF was not an appropriate venue for a substantive discussion of the South China Sea dispute.202 Their views have played to the forum’s consensus modus operandus. For Manila limited discussion of the South
198 Buffering factors included a lower level of expansion and lending because of pre-existing financial management controls and an “underweighted” ranking by international fund managers, a steady revenue base (supported by substantial remittances) and strong export performance that enabled the central bank to increase its reserves. Patricio N. Abinales, “Coalition Politics in the Philippines”, Current History 100(645), 2001, p. 159. 199 “ASEAN seeks progress on S. China Sea code of conduct”, Asian Political News, 26 July 1999. 200 Ibid. 201 Ibid. 202 See for example, Paul Jacob, “Manila presses Asean to adopt code of conduct”, The Straits Times, 22 July 1999.
145 China Sea dispute in the ARF was better than nothing: it kept the issue ‘alive’ in the forum. Balanced against this, however, the forum was unwilling to express anything more than general statements on the dispute.203 In this context, Leszek Buszynski notes Manila’s disappointment with the responses of both the ARF and ASEAN.204 Their members were unwilling to alienate China “over what was to most members the small and ambiguous issue of disputing sea claims.”205 Unwillingness by individual country’s to risk their political, economic, security and other interests by antagonising China was a further factor.206
Outside the region, Manila sought to garner support in multilateral forums, in the international media and with the US and Japan. Reflective of this, Jose Almonte, President Ramos’ national security adviser, invoked an inclusive perspective in suggesting that China’s move on Mischief Reef should be of concern to all powers with an interest in the stability of the South China Sea and its sealanes.207 In a similar vein, after the second Mischief Reef episode in 1998 President Estrada instructed the Department of Foreign Affairs to lobby Germany to include the issue on the agenda of the 29 March 1999 Asia-Europe Meeting in Berlin. The Germans were reluctant to do so, fearing a walkout by the Chinese delegation.208 Undeterred, Philippines Foreign Minister Siazon sought to emphasise the reciprocal nature of the dialogue: “the issue has to be discussed because it relates to political and security conditions in Asia, as we will also be discussing political and security conditions in Europe.”209 That same year the Philippines sought discussion of the reef dispute in the seventh
203 See relevant paragraph in the Chairman’s Statement from the second (1994) to ninth (2002) ARF meeting. Successive statements available at <
146 annual meeting of the Asia-Pacific Parliamentary Forum in Lima and the Interparliamentary Union meeting in Brussels, to China’s consternation.210
In March 1999 President Estrada met with United Nations Secretary-General Kofi Annan and sought his support in settling the Spratlys dispute.211 In particular, Estrada requested that the Secretary General intervene to allow the Philippines to seek United Nations Security Council arbitration on the matter. Predictably, China rejected the idea.212 Manila also considered bringing the Mischief Reef dispute to the ICJ213 and the International Tribunal on the Law of the Sea, the latter a body established under the framework of the LOSC.214 Neither option was pursued.
Correct relations between Manila and Washington after 1992 gradually warmed in the wake of the first Mischief Reef episode in 1995 (see Chapter 6). Giving impetus to reinvigorated military co-operation was the February 1998 signing of a new Visiting Forces Agreement (VFA), ratified by the Philippines Senate in May 1999. Some Filipino politicians considered the agreement and the 1951 Mutual Defense Treaty (MDT) mutually supportive,215 with the latter instrument viewed as a basis for American assistance if Philippines property came under attack in the South China Sea. This was contrary to statements made by senior Philippines government
210 Francisco S. Tatad, Guarding the Public Trust. The Making of Public Policy, Raya Books, Quezon City, 2000, pp. 150-57; “Chinese mischief at Reef to IPU”, Manila Standard, 16 April 1999; “Philippines to raise issue of disputed islands at international level”, Philippine Star, 12 April 1999. 211 “Erap asks UN to help settle row on Spratly Isles”, Philippine Daily Inquirer, 19 March 1999; “Philippines tells UN’s Annan of worries over China”, Reuters, 18 March 1999. 212 Daojiong Zha and Mark J. Valencia, “Mischief Reef: Geopolitics and Implications”, Journal of Contemporary Asia 31(1), 2001, p. 90; Ian Storey, “Manila looks to USA for help over Spratlys”, Jane’s Intelligence Review 11(8), 1999, p. 47; Diego C. Cagahastian, “UN chief lauds Erap on Spratlys, Mindanao issues”, Manila Bulletin, 19 March 1999. 213 “Manila may seek U.N. help in Spratlys row”, Reuters, 13 February 1995. 214 Carlyle A. Thayer, “Some Progress, along with Disagreements and Disarray”, Comparative Connections, 2nd Quarter 1999: China-ASEAN Relations, <
147 officials in both 1992 and 1995.216 Nonetheless, Philippine hopes rose following a discussion between Presidents Estrada and Clinton on the margins of the November 1999 Asia-Pacific Economic Co-operation (APEC) forum summit in Auckland, when President Clinton reportedly pledged to support the Philippines if conflict occurred in the Spratlys.217
Clinton’s apparent support followed remarks made in July that year by Secretary of State Madeleine Albright at the Sixth ARF meeting in Singapore. She hinted that Washington might take a more active position on the South China Sea dispute:
[t]he stakes are too high to permit a cycle to emerge in which each incident leads to another with potentially greater risks and graver consequences. We cannot simply sit on the sidelines and watch. Nor can there be any doubt that this is an appropriate Forum for discussion of this issue. All members of the ARF have an interest in peace and stability in the South China Sea.218
This appeared to flag a subtle change in US policy. Up to then its position was one of neutrality on the legal bases of the competing sovereignty claims and encouragement to the parties to resolve the dispute peacefully. Albright’s remarks seemed to signal a more active interest was possible. A catalyst for this shift in Yann-huei Song’s view was the discovery of China’s construction on Mischief Reef in 1995.219 Subsequently, officials from the Clinton administration voiced their
216 In April 1992 Philippines Foreign Secretary Raul Manglapus stated the US was obliged to protect the Philippine navy if it were attacked in the Spratlys, a view Washington did not hold because the area was disputed territory. During a 1995 hearing of the Philippines Senate, Manglapus’ successor Roberto Romulo conceded that the Mutual Defense Treaty (MDT) applied only to the county’s metropolitan territory and did not extend to any claim in the South China Sea. On Manglapus’ 1992 remarks, see Asian Defence Journal, May 1992, p. 85 cited in Frank Cibulka, “The Philippine Foreign Policy of the Ramos Administration: The Quest for Security of a Weak State”, Asian Journal of Political Science 7(1), 1999, p. 121. On Romulo’s remarks to the Philippines Senate, see Rodney Tasker, “A Line in the Sand”, Far Eastern Economic Review, 6 April 1995, p. 15. 217 Yasmin Lee G. Arpon, “Clinton said US to defend RP in Spratlys – Estrada”, BusinessWorld (Philippines), 16 September 1999. 218 Secretary of State Madeleine K. Albright, Intervention at Sixth ASEAN Regional Forum, Singapore, 26 July 1999, <
148 concern in a meeting with China’s foreign minister and in a statement issued by the State Department. Members of the Congress also expressed their concern by introducing resolutions and a bill (American Overseas Interests Act, 1995), the latter ultimately vetoed by the president.220 By 2000 some Chinese scholars argued that the US had adopted a more active position on the South China Sea dispute.221 Beijing expressed its concern at the increased number of joint military exercises Washington held with southeast Asian countries in 2000-2001, asserting it was a development that undermined efforts in regional confidence-building.222
Seeking to draw in Japan by invoking its national interest in an unhindered flow of oil imports, both Philippines Senate President Blas Ople and Defence Secretary Orlando Mercado called on Tokyo to take an active interest in the Mischief Reef dispute.223 Unlike in 1995 when Japan made an intervention on the dispute at a vice-ministerial bilateral meeting with the Chinese,224 in 1999 Tokyo did not respond to Manila’s call. One reason may have been Tokyo’s sensitivities to its relationship with Beijing. Following difficulties in China-Japan bilateral relations in 1996-1997 the two countries made strong efforts to repair their ties in 1998. This included a series of high-level diplomatic exchanges, including by China’s Defence Minister Chi Haotian and President Jiang Zemin, the first time a Chinese head of state had visited Japan.225 Tokyo was also well aware of China’s concern about aspects of the updated Japan-US defence co-operation guidelines. The guidelines were agreed in September 1997 but did not receive Diet approval until early 1999. Beijing was particularly concerned that the guidelines’ reference to a support role by Japan’s Self-Defence Forces in situations in areas surrounding Japan was a veiled reference
220 Ibid., pp. 89-95. 221 Cited in ibid., p. 250. 222 Ibid., p. 253. See also “China worried over war games of Philippines, U.S. and Thailand”, Deutsche Presse-Agentur, 21 March 2001; “China closely watches trilateral war games”, Kyodo News, 21 March 2001. 223Michael Richardson, “Philippines is Stymied in Dispute with China”, International Herald Tribune, 21 January 1999; “Manila asks Tokyo for Support in Spratly Dispute with China”, Asia Pulse, 7 December 1998. See also “AFP chief sees likely ally in Japan to keep status quo in Spratlys”, BusinessWorld (Philippines), 16 July 1999. 224 Lam Peng Er, “Japan and the Spratlys Dispute. Aspirations and Limitations”, Asian Survey XXXVI(10), 1996, pp. 1005-06. 225 Robert Uriu, “Japan in 1998. Nowhere to Go but Up?”, Asian Survey XXXIX(1), 1999, p. 123.
149 to Taiwan.226 China’s Foreign Ministry Spokesman Sun Yuxi stated “China is deeply concerned about the acts regarding the New Japan-US Defense Guidelines … Disregarding the concern of its neighbouring countries, including China, Japan has rushed headlong to approve a bill aimed at strengthening military cooperation with the United States.”227 Speaking in July 1999 Foreign Ministry Spokeswoman Zhang Qiyue stressed that:
[a]ny attempt to include Taiwan into the scope of Japan-US security cooperation is a serious infringement of China’s sovereignty and wanton interference in China’s internal affairs. The Chinese Government and people resolutely oppose it and will not tolerate it.228
Manila is gambling that the weight of international opinion and moral pressure will moderate other claimants’ behaviour in the South China Sea.229 This may be optimistic. First, the interests of Japan and the US in freedom of navigation would need to be demonstrably threatened or actually constrained. Second, countries within and beyond southeast Asia will calculate the potential costs and benefits to their political, economic and security interests before raising a stern voice against China’s actions in the Spratlys/South China Sea. ASEAN members do not hold a common view about China’s intentions, in particular whether they are benign or threatening to regional order. Economic and other linkages between China and individual ASEAN members may also moderate criticism of Beijing’s actions in the Spratlys.230 For example, both Singapore and Thailand have strong trade and investment links with China and may be reluctant to jeopardise them by being overly
226 See for example, Lee Jae-hyung, “China’s Expanding Maritime Ambitions in the Western Pacific and the Indian Ocean”, Contemporary Southeast Asia 24(3), 2002, p. 563; “Japan Passes Law to Strengthen US Defence Ties” Agence France-Presse, 24 May 1999. Reprinted in <
150 critical of Beijing. At the same time, as non-claimants they have an opportunity to offer their ‘good offices’ to facilitate negotiations. Singapore has urged the claimants to halt militarisation of the South China Sea while Thailand has suggested the establishment of a sub-regional economic grouping in the South China Sea to turn the area into a zone of co-operation.231
Even if international pressure was forthcoming, different approaches proposed to address the dispute may be ‘captured’ by one or more claimants as a means to maintain the status quo or as a delaying tactic in any negotiation. Approaches advanced to date include joint development,232 a so-called “doughnut formula”,233 a Spratlys Management Authority,234 a six-phase strategy to be initiated by China,235 application of the Antarctic Treaty System model,236 the establishment of a marine reserve over the area237 and designation of discrete marine protected areas.238 To date the claimants have shown little political will to progress any of these ideas.
4.4 Identifying the Decision Unit
Malaysia
Since his installation as Prime Minister in 1981, Mahathir Mohamad has exerted a strong influence over Malaysia’s foreign policy.239 Relations with ASEAN
231 Cheng-Yi Lin, “Taiwan’s South China Sea Policy”, Asian Survey XXXVII(4), 1997, p. 336. 232 For example, on 13 August 1990 Premier Li Peng stated that “China is ready to join efforts with Southeast Asian countries to develop the [the Spratly] islands, while putting aside for the time being the question of sovereignty.” Nayan Chanda and Tai Ming Cheung, “Reef knots”, Far Eastern Economic Review, 30 August 1990, p. 11. 233 Nayan Chanda, “Divide and Rule. Beijing scores points on South China Sea”, Far Eastern Economic Review, 11 August 1994, p. 18. 234 Valencia, van Dyke and Ludwig, Sharing the Resources of the South China Sea, chapter IX. 235 Stein Tønnesson, “China and the South China Sea: A Peace Proposal”, Security Dialogue 31(3), 2000, pp. 316-322. 236 Kuan-Ming Sun, “Freeze the tropical seas. An ice-cool prescription for the burning Spratly issues!”, Marine Policy 20(3), 1996, pp. 199-208. 237 John W. McManus, “The Spratly Islands: A Marine Park?”, Ambio 23(3), 1994, pp. 181-86. 238 Edgardo D. Gomez, “Marine Scientific Research in the South China Sea and Environmental Security”, Ocean Development and International Law 32(2), 2001, p. 210. 239 Shanti Nair, Islam in Malaysian Foreign Policy, Routledge, London and New York, 1997, p. 83.
151 are the country’s highest priority.240 It is puzzling, then, why Malaysia would go against this goal by occupying two features contested by fellow ASEAN members the Philippines and Vietnam. In defending publicly Malaysia’s sovereignty over Investigator Shoal and Erica Reef and its right to occupy and build on them, Mahathir signalled he was clearly aware of the actions.241 Whether or not this means he was the decision unit is the focus of this section. The decision tree reproduced as Figure 1 in Chapter 2 guides the analysis.
Through his personality and position Mahathir has the power and authority to commit or withhold the regime’s resources concerning the Spratlys issue irrespective of opposition by others in the coalition government, the Barison Nasional (BN, National Front), or his party, the United Malays National Organisation (UMNO). Malaysian analyst B.A. Hamzah suggests, for example, that Mahathir’s dominance of the policy process means that any dissenting voices are over-ruled decisively and both the cabinet and the bureaucracy are “implementers” rather than “advisers”.242 Another analyst uses the term “idiosyncratic megalomania” to describe Mahathir’s influence, “right down to the kinds of weapons systems purchased.”243
Mahathir has exhibited a sustained and active involvement in foreign policy issues beginning from the time he was first installed as prime minister.244 His motivation in Andrew Tan’s view is “a personal desire to become prominent, respected and admired on the international stage.”245 He goes on to identify eight areas of Malaysia’s foreign policy where Mahathir has made a particular impact. They are promotion of the interests of the South; railing against perceived double standards by developed countries; support for the UN and its peacekeeping operations; emphasis on multilateralism through ASEAN, ARF, APEC and the
240 Ibid., p. 80. The other priorities in descending order are relations with Islamic countries, the non- aligned movement and finally the Commonwealth. 241 “Mahathir Says Malaysia Owns Disputed Spratly Reefs”, Agence France-Presse, 27 June 1999. 242 Interview with B.A. Hamzah, Maritime Policy Consultant and former Director-General, Maritime Institute of Malaysia, Kuala Lumpur, October 2001. 243 Tan, Malaysia’s Security Perspectives, p. 9. 244 See Nair, Islam in Malaysian Foreign Policy, p. 83. 245 Tan, Malaysia’s Security Perspectives, p. 10.
152 World Trade Organisation; neutrality towards great powers and pragmatism; greater emphasis on Islam; Malay survival; and foreign policy as an element of defence.246
Defence issues have also been of close interest to Mahathir.247 On becoming Prime Minister in 1981 he concurrently held the defence portfolio, relinquishing it in 1986.248 In this Mahathir was not unique: with the exception of Tunku Abdul Rahman, all of Malaysia’s prime ministers have also held the post of defence minister or installed their deputy or politically weak cabinet colleagues.249 While breaks in this pattern have occurred, Chandran Jeshurun suggests “the defence minister has always tended to be a proxy of the prime minister.”250
Despite interest and involvement in foreign and defence policy issues, it is unclear to what extent Mahathir set the general policy direction concerning Malaysia’s sovereignty claim in the Spratlys or towards occupation of Investigator Shoal and Erica Reef. It is not evident that he exhibited regular, active participation in the decision process to occupy the two features. Indeed, domestic problems associated with managing the social unrest and political fallout from the Anwar Ibrahim affair, alleged crony capitalism and an impending general election were probably a higher priority at the time251 (see also section 4.6). Mahathir’s dominance of foreign (and domestic) policy meant his view of China as non-threatening to Malaysia’s security was adopted as the government position, as was his view that the South China Sea dispute should be resolved peacefully. However, it is difficult to extrapolate from such general statements to suggest that Mahathir alone was the decision unit in the specific case of Investigator Shoal and Erica Reef. Given his highly centralised style of leadership, however, he must have given his approval to
246 Ibid., pp. 10-13. 247 Jeshurun, “Malaysia: the Delayed Birth of a Strategic Culture”, p. 239. 248 Chamil Wariya, “Leadership Change and Security In Malaysia: From the Days of the Tunku to Dr Mahathir Mohamad”, Contemporary Southeast Asia 11(2), 1989, p. 168. As noted there, in 1986 Abdullah Ahmad Badawi was made defence minister following the change in deputy prime minister from Musa Hitam to Ghafar Baba. Badawi’s tenure lasted only a year because of his open support for the Razaleigh Hamzah-Musa faction that challenged Mahathir’s leadership of the United Malays National Organisation (UMNO) in 1987. 249 Ibid., p. 166, pp. 168-69. The Tunku gave the defence portfolio to his deputy, Tun Abdul Razak. 250 Jeshurun, “Malaysia: the Delayed Birth of a Strategic Culture”, p. 240. 251 Anwar’s first trial occurred in April 1999 and a second was held in 2000. The occupation of Investigator Shoal and Erica Reef took place in June and July 1999.
153 the actions.
The question is whether this occurred as a member of a single group or a multiple autonomous actor decision unit. To begin, we consider whether there exists one dominant policy group within whose sphere the issue falls. Several candidates are identifiable. First, the Ministry of Foreign Affairs. Within the ministry responsibility for dealing with territorial disputes, regional maritime boundary problems and LOSC-related maritime issues lies with the Territorial and Maritime Issues Division.252 The South China Sea issue is one of the matters the division follows.253 Both the division and the ministry are advisory rather than decision- making units, however. Their analysis and recommendations are provided to the Minister of Foreign Affairs for injection into the decision-making process.
Second, the Prime Minister’s Department. Under Mahathir the department has increased its policy making power.254 The department is responsible for, inter alia, overall management of functions relating to the legislative, constitutional and political duties and responsibilities of the prime minister, and co-ordination of implementation of special projects identified by him. Within the department the National Security Division (Bahagian Keselamatan Negara, BKN), headed by Datuk Jaafar bin Ismail, has primary responsibility for formulating and co-ordinating national security policy with other government agencies and ensuring its implementation in a comprehensive and effective manner. It also has responsibility to monitor developments nationally, regionally and globally that have implications for Malaysia’s security.255 The Division’s Maritime Security Policy Group (Pusat Penyelarasan Penguatkuasaan Maritim, PPPM), headed by Abdul Rahim bin Hussin co-ordinates the activities of national agencies in assuring Malaysia’s maritime security, including enforcement of relevant laws, surveillance of the country’s
252 Ministry of Foreign Affairs, Malaysia, “Territorial and Maritime Affairs Division”, <
154 territorial waters and the conduct of search and rescue operations.256 However, although the Prime Minister’s Department is highly influential it defers ultimately to Mahathir in decision-making.
Third, the National Security Council (NSC). Chaired by the Prime Minister, its membership comprises the Ministers of Foreign Affairs, Defence, Home Affairs, Information, a Minister Without Portfolio, the National Chief Secretary, the Chief of the Defence Force and the Inspector-General of Police.257 During times of conflict the Council co-ordinates the government’s response while in peacetime its role is to examine security related issues that are cross-departmental in scope.258 The NSC was considered the force behind the establishment in 1993 of the Malaysian Institute of Maritime Affairs,259 a policy research institute responsible for analysing and advising the government on national, regional and global maritime issues affecting the country’s interests.260 The National Security Division in the Prime Minister’s Department acts as the Council’s secretariat.261
Fourth, the Ministry of Defence (MINDEF), or Kementerian Pertahanan (KEMENTAH). MINDEF’s mission is to “uphold the sovereignty, integrity, interests and strategic rights of the country by ensuring efficiency and combat readiness at all times to face any external or internal threats to ensure the country’s development towards making a region of peace and prosperity.”262 Responsibilities associated with this mission include managing national defence, implementing national defence policy and general government policies, providing management and administrative services to the Malaysian Armed Forces and managing resources allocated for
256 National Security Division, Prime Minister’s Department, Malaysia, “Pusat Penyelarasan Penguatkuasaan Maritim (PPPM)”, <
155 national defence.263 MINDEF acts as an instrument of the government’s foreign policy. It is not a decision maker on that policy. The historical maintenance of the separation between politics and the military means that MINDEF does not have the power or authority to prevent its decisions being reversed by other actors, in particular the Prime Minister, the Cabinet and the National Security Council.
It is concluded that a single group, the National Security Council, was the decision unit on Investigator Shoal and Erica Reef. The council included everyone within the regime whose support was essential to approve the release of state resources. Mahathir’s chairmanship of the group meant that a decision receiving his endorsement was unlikely to be reversed by external opponents. Each member of the Council brought particular perspectives to bear on the Investigator Shoal and Erica Reef issue. For Mahathir, averting a deepening of domestic problems may have been a consideration, particularly the scenario of one of the other claimants making a pre- emptive move on the features. While in itself the Spratlys dispute was not a regime- threatening issue,264 any loss of Malaysian “territory” might have fuelled an already difficult domestic situation arising from the financial crisis and the mass protests catalysed by the arrest and treatment in detention of former deputy prime minister Anwar Ibrahim. As noted previously, the foreign affairs ministry participated in the multilateral discussions of a regional code of conduct. Analysis of its draft contents would have alerted departmental officials of the proposed ban on occupying new features. Foreign Minister Syed Hamid Albar would have been briefed on the content and progress of the draft code as well as the implications for Malaysia’s interests. And as a former minister of defence (between May 1995 and January 1999) he would have been aware of the military’s concerns about not only China’s actions in Mischief Reef but also the limited deterrent capability of the Malaysian navy. As noted previously, some senior staff of the Malaysian armed forces had expressed their concern and the need for vigilance following China’s Mischief Reef foray. As a member of the National Security Council, the Chief of the Defence Force was well placed to reiterate these concerns. From a bureaucratic politics perspective, keeping
263 Ministry of Defence, Malaysia, “Functions and Responsibilities”, <
156 the Spratlys/South China Sea issue ‘alive’ would have also sustained justification for more resources to the navy and airforce.
A consideration the group must have grappled with was the likely reactions to the occupation of the two features by ASEAN, the other claimants and extra-regional powers. That it was not an impediment to action suggests confidence that the fallout was manageable. It also suggests the timing of the action was pre-emptive: it enabled Kuala Lumpur to defend itself against accusations that it had violated the code of conduct, since the instrument was still under negotiation.
Philippines
Constitutionally the Philippines President, as head of state and chief executive, is the foreign policy decision maker.265 In this role, he/she has the power and authority to commit regime resources to the goal of internationalising the Spratlys dispute to bolster the Philippines’ sovereignty claim and in this to over-ride opposition by others. Presidents Ramos, Estrada and Arroyo have all taken an interest and involvement in foreign and defence policy issues, albeit to varying degrees. Ramos undertook thirty-six overseas visits during his term of office266 while Estrada’s destinations included China, New Zealand and several countries in Latin America. President Arroyo’s state visits included Brunei, China, Malaysia (twice), Thailand and the US. Reflecting the priority of ASEAN in Philippines foreign policy, all three presidents actively participated in the organisation’s high- level meetings. Ramos hosted the 25th ASEAN Ministerial Meeting (AMM) in 1992. He also played a prominent role in sponsoring Myanmar’s entry into ASEAN.267 In 1998 Estrada hosted the 31st AMM, and in 1999 the fifth meeting of the ASEAN Regional Forum and the Third ASEAN Informal Summit. In the economics arena, Ramos, Estrada and Arroyo attended the annual APEC Summit; Ramos hosted the 1997 meeting.
265 Salvador P. Lopez, “The Foreign Policy of the Republic of the Philippines” in Raul P. De Guzman and Mila A. Reforma (eds), Government and Politics of the Philippines, Oxford University Press, Singapore, Oxford and New York, 1988, p. 241. 266 Segundo E. Romero, “The Philippines in 1997. Weathering Political and Economic Turmoil”, Asian Survey XXXVIII(2), 1998, p. 201. 267 Ibid., p. 201.
157 In the defence arena, all three presidents supported modernisation of the Philippines armed forces with varying degrees of enthusiasm. Each favoured reviving defence co-operation with the US as concern grew about China’s actions in the Spratlys and Scarborough Shoal. Ramos and Estrada supported a Visiting Forces Agreement, finally ratified by the Philippines Senate in May 1999 and which enabled the resumption of joint military training exercises in the Philippines. Following the attacks on the World Trade Centre and the Pentagon on 11 September 2001, President Arroyo offered the Philippines’ co-operation in the US-led war on terrorism. This included authorising American troops to provide training to the Philippines armed forces fighting the Abu Sayyaf group in the southern part of the country. Transfer of American military equipment to the Philippines Armed Forces occurred under the anti-terrorism banner. Further strengthening of co-operation occurred with the conclusion of the Mutual Logistics Support Agreement (MLSA) in December 2002, which enables the US military to forward-deploy supplies to the Philippines and to use local bases in peacetime exercises and during times of conflict.268 In 2003 US President George W. Bush elevated the Philippines to full alliance partner status.
Another feature common to the three leaders was continuity with an internationalisation approach to bolster support for the country’s sovereignty claim to the Kalayaan Island Group. The 1995 occupation of Mischief Reef by China catalysed the launch of the approach as the Philippines realised its ability to handle external threats was very weak. As noted earlier, Ramos initiated a two-pronged approach based on bilateral and multilateral diplomacy. Estrada continued this approach and also sought to draw in the UN during his March 1999 meeting with Kofi Annan. In addition, in 1999 he instructed his officials to raise the Philippines’ position in international forums as diverse as the Asia-Pacific Parliamentary Forum in Lima, the Asia-Europe Meeting in Berlin and the Interparliamentary Union Conference in Brussels. President Arroyo maintained the internationalisation approach but sought to raise the volume of the Philippines’ voice on the sovereignty
268 See Raymund José Quilop, “Manila, Washington sign pact on logistic support exchange”, Jane’s Defence Weekly, 11 December 2002, p. 15; “When is “Not a Base” Still a Base for US?”, 3 September 2002, <
158 issue in a bid to increase support. In this she appeared to be influenced by the views of her National Security Adviser Roilo Golez who pushed strongly for the Spratly and Scarborough Shoal disputes to be aired in the international arena.269
Two principal forums existed for Ramos, Estrada and Arroyo to participate in the decision process about the Philippines’ approach to the Kalayaan claim. They were the National Security Council and the Cluster E group. The National Security Council (NSC) is chaired by the President and includes the Senate President, the Speaker of the House of Representatives, the secretaries of foreign affairs, defence, justice and interior and local government, the National Security Adviser and the Director-General of the National Economic Development Authority (NEDA). Former presidents and serving politicians may be invited to attend meetings on an ad hoc basis.
The second group is Cluster E. Under Corazon Aquino’s presidency a number of high level groups, or clusters, were established.270 Eight clusters exist: agro-industrial development (Cluster A), macroeconomy and finance (Cluster B), human resources and development (Cluster C), physical infrastructure support (Cluster D), security and political development (Cluster E), development administration (Cluster F), water resources management (Cluster G) and international relations (Cluster H).271 Their purpose is to enhance co-ordination in decision-making processes and to facilitate the implementation of critical inter- agency programmes and projects. Each cluster acts as an advisory committee to the President and the Cabinet.
Cluster E membership comprises the secretaries of foreign affairs, defence, justice, interior and local government, the National Security Adviser, the Executive Secretary of the President, a representative of the Presidential Management Secretariat and the President’s spokesperson. Representatives of other agencies such
269 Johnna Villaviray, “NSC wants strong drive on Spratlys”, The Manila Times, 23 February 2001. 270 Interview with Emma Sarne, Director, Department of Foreign Affairs, Manila, November 2001. 271 United Nations Economic and Social Commission for Asia and the Pacific, “Integrating Environmental Considerations into the Economic Decision-Making Process. Institutional arrangements and mechanisms”, <
159 as the Central Bank or NEDA are invited as appropriate.272 A mini Cluster E also exists. In relation to the South China Sea issue it comprises representatives of the National Security Council, the Department of National Defense, the Department of Foreign Affairs, the Department of Fisheries, the Department of Environment and Natural Resources and the National Mapping and Resource Information Authority.273 Nominally, Cluster E has been abolished; in reality, it continues to function.274
The composition of the NSC and Cluster E includes all the key actors whom the president formally consults in the options analysis and decision process. In January 1999, for example, Estrada convened a meeting of the National Security Council at which it was agreed that a combination of bilateral and multilateral diplomatic initiatives would be used to pressure China. Other peaceful initiatives would be evaluated and modernisation of the Philippines armed forces would continue.275
Having reviewed the evidence, it is concluded that the decision unit on the Philippines’ internationalisation approach was the predominant leader. This spanned the presidencies of Ramos, Estrada and Arroyo. In conformity with the decision tree shown in Chapter 2 they exhibited regular, active participation in the decision process to internationalise the Spratlys dispute and continuity in its implementation was evident. Through the NSC and the Cluster E the president was able to include selected others as part of the decision process but neither group had veto power over their decision.
272 Interview with Francisco Mier, Assistant Director-General for Policy and Strategy, National Security Council, Manila, December 2001. 273 Interviews with Emma Sarne, Director, Department of Foreign Affairs, Manila, November 2001 and Aileen San Pablo-Baviera, Associate Professor, Asian Center, University of the Philippines, Manila, December 2001. 274 Interview with Francisco Mier, Assistant Director-General for Policy and Strategy, National Security Council, Manila, December 2001. 275 Francisco N. Cruz, Jr., “A Strategy for the KIG”, Office of Strategic and Special Studies Digest, Armed Forces of the Philippines, 1st and 2nd Quarter, 2001, p. 21.
160 4.5 The Decision Unit and Foreign Policy Behaviour
Malaysia
A single group, the National Security Council, was labelled the decision unit. Theoretically, the foreign policy behaviour of this type of decision unit is related to the speed with which it reaches consensus about handling the issue before it.276 Where consensus is reached quickly the group is considered self-contained because members are confident about their collective position, they reinforce each other’s views and feel no need to seek outside support for recommendations.277 In this case, foreign policy behaviour is predicted to be conflictual, based on the group’s strong view of what needs to be done about the issue and a readiness to do it, either a strong commitment or denial of regime resources and the use of economic and military instruments as well as or instead of diplomacy.278
Where quick consensus is unforthcoming, external factors may play an influential role as members look outside the group to obtain further information, to redefine the problem or to identify ways to overcome differences.279 In this case the group is considered externally influenceable.280 Expected foreign policy behaviour then reflects the complexities and uncertainties that outside influences bring in shaping the group’s decision process.281 Theoretically, this is reflected in behaviour that emphasises diplomacy, co-operation and a moderate commitment of regime resources to the foreign policy issue at hand.282
Several factors may have prompted consensus in the National Security Council, enabling it to be labelled a self-contained decision unit. First, factors in the domestic political arena. As noted previously, having observed China’s occupation of and consolidation on Mischief Reef the military was wary of the possibility that
276 Margaret G. Hermann and Charles F. Hermann, “Who Makes Foreign Policy Decisions and How: An Empirical Inquiry”, International Studies Quarterly 33(4), 1989, p. 367. 277 Ibid. 278 Ibid., p. 373. 279 Ibid., p. 367. 280 Ibid. 281 Ibid., p. 375. 282 Ibid., p. 376.
161 Malaysian-claimed features might be targeted in the future despite the political leadership’s view of a benign China. Another consideration was the upcoming general election, preparations for which had begun in 1998. In addition, the domestic impacts of the financial crisis and the Anwar Ibrahim affair provided rallying points around which opposition political parties and the public directed their attacks on Mahathir and on the performance and probity of the regime. The UMNO stranglehold on power began to look vulnerable. In this situation, losing Malaysian “territory” in the Spratlys to another claimant would compound the regime’s problems. A pre-emptive seizure of Investigator Shoal and Erica Reef would avert this possibility.
Second, developments in the external environment. By early 1999 the regional financial crisis had peaked. The political implications had yet to subside, however. The leaders of Indonesia and Malaysia were affected in different ways by the crisis. In Indonesia it precipitated the departure of President Soeharto followed by the launch, and lurch, of political and economic reform. In Malaysia Mahathir held on to power, his controversial strategy of introducing capital controls paying off ultimately. Taking advantage of ASEAN’s focus on mopping up the immediate effects of the regional financial crisis and launching policy dialogue on frameworks to strengthen prudential oversight, occupation of Investigator Shoal and Erica Reef was unlikely to generate strong censure by the organisation’s membership. Indonesia, ASEAN’s other heavyweight member, was internally focused on managing political and economic problems and containing the spread of ethnic violence. Moreover, following the departure of President Soeharto the informal leadership role he had assumed in ASEAN became vacant and with it an influential voice in conditioning action and behaviour by members. The weak economic and military capabilities of fellow ASEAN members the Philippines and Vietnam meant neither would be able to go beyond the predictable, but ineffective, diplomatic protests against Malaysia’s actions.
In addition, China’s move on Mischief Reef provided a demonstration effect. ASEAN’s lukewarm response to China’s 1998 reinforcement on the reef showed that
162 opportune timing and careful management of regional reaction offered a low-cost, high pay-off outcome.
An indication of conflictual behaviour, or at the least strong discouragement, was Malaysia’s signal in July 1999 that it was unwilling to discuss its occupation of, and construction on, Investigator Shoal at that month’s meeting of ASEAN foreign ministers in Singapore.283 Rather, it preferred that “bilateral issues be discussed bilaterally.”284 Kuala Lumpur’s position was well calculated. First, as noted above the informal leadership role in ASEAN exercised by President Soeharto and Indonesia had diminished. The resulting flux provided an opportunity for Mahathir and Malaysia. Second, Malaysia’s signal undercut the potential for Manila and Hanoi to rally support in and censure by the organisation, effectively restricting discussion to the bilateral level. Indeed, in the meeting Malaysia successfully opposed the Philippines’ call to include in the foreign ministers’ communiqué a statement urging all claimants to halt occupation and construction in disputed areas of the South China Sea.285 The relevant paragraph of the communiqué did not mention Malaysia’s action. It “recognised that several issues remained a source of concern”, “reiterated the need for the disputes to be settled peacefully in accordance with the recognised principles of international law, …, and to continue to exercise self-restraint in the conduct of activities in the South China Sea”, recalled developments in establishing a regional code of conduct in the South China Sea and recognised the contribution of ongoing bilateral and multilateral consultations at the inter-governmental and informal levels.286
To what extent was the China factor a constraint on Malaysia’s behaviour? In Abdul Razak Baginda’s view, Beijing’s likely reaction to Malaysia’s claim in the Spratlys was a consideration to decision makers in Kuala Lumpur.287 Despite the potential ramifications, however, it was considered the depth of the bilateral
283 “Spratly Islands”, Far Eastern Economic Review, 29 July 1999, p. 15. 284 “ASEAN seeks progress on S. China Sea code of conduct”, Kyodo News, 26 July 1999. 285 Mel C. Labrador, “The Philippines in 2000. In Search of a Silver Lining …”, Asian Survey XLI(1), 2001, p. 228. 286 Joint Communique, The 32nd ASEAN Ministerial Meeting, Singapore, 23-24 July 1999, Paragraph 39. Full document available at <
163 relationship allowed any negative feedback to be managed.288 This assessment proved correct. For example, China’s diplomatic protest of Malaysia’s occupation of Investigator Shoal and Erica Reef was mild.289 There were no sustained pronouncements by China’s foreign ministry or the Chinese press of the country’s indisputable sovereignty over the area. This contrasted with their vocal comments regarding the Philippines’ claim to Mischief Reef and Scarborough Shoal. Moreover, there was no physical response by Beijing to reinforce its position. Nor did Malaysia’s actions elicit comment in reports on Mahathir’s August 1999 visit to Beijing290 or when Zhu Rongji made a return visit to Kuala Lumpur in November that year.291
Economic dependence is unlikely to explain the muted Chinese response to Malaysia’s action in the Spratlys. While the trend in China-Malaysia trade has been consistently upwards, their reciprocal exports and imports represent only a small share of their total figures. In 1999, for example, Malaysia’s exports and imports to China represented 2.7 and 2.6 per cent respectively of Kuala Lumpur’s total share in each category. This reflects the fact that Malaysia’s main trading partners are the US, Japan, the European Union and other ASEAN countries.292
Other factors may provide clues. First, the two country’s like-minded views about handling the South China Sea dispute. Following his meeting with Foreign Minister Tang Jiaxuan in Beijing in early June 1999, Malaysian Foreign Minister Syed Hamid Albar stated the two sides agreed that the issue should be handled through bilateral negotiations. This position was reiterated in Albar’s intervention to the thirty-second ASEAN Ministerial Meeting in Singapore on 23 July 1999: “We should resolve this regional issue [the South China Sea dispute] by ourselves, either
288 Ibid. 289 Ibid., p. 238 and p. 244. 290 See for example, “Enhancing bilateral ties”, The New Straits Times, 20 August 1999. 291 See for example, “Malaysian premier hosts banquet, hails China commitment to ASEAN”, Bernama, 22 November 1999. Republished in BBC Worldwide Monitoring, 23 November 1999. 292 Tham Siew Yean, “Impact of China’s Accession into the WTO on the Malaysian Economy. National Report Malaysia”, ASEAN-China Expert Group on Economic Cooperation, Forging Closer ASEAN-China Economic Relations in the Twenty-First Century, 2001, pp. 57-58, <
164 bilaterally or with others in the region, who are directly concerned.”293 Speaking to the press following Prime Minister Mahathir’s meeting with China’s Premier Zhu Rongji in August, Albar reaffirmed that both countries preferred problems and differences relating to claims in the South China Sea to be resolved between ASEAN member states and China, without the involvement of outside powers.294
Second, an empathy between Malaysia and China on issues such as human rights, the implications for international order of American unipolarity and the implications of globalisation for developing countries. This has reinforced their strong bilateral relations that date back to 1974, when Malaysia was the first ASEAN member country to normalise ties with China. Second, in mid-1999 China agreed to sign the Protocol to the Southeast Asia Nuclear Weapon-Free Zone (SEANWFZ) Treaty and also asked ASEAN to establish a joint committee to assess the possibility of acceding to the organisation’s Treaty of Amity and Co-operation (TAC).295 ASEAN welcomed these developments. As champions since 1971 of the notion of a Zone of Peace, Freedom and Neutrality (ZOPFAN), which SEANWFZ complements, Malaysia and Indonesia were likely to have especially welcomed China’s initiative.296 China acceded to the TAC at the October 2003 ASEAN-China Summit in Bali.297
On 31 May 1999 Malaysia and China reaffirmed their good relations in signing a joint framework statement to guide future bilateral co-operation.298 In
293 Statement by H.E. Datuk Seri Syed Hamid Albar, Minister of Foreign Affairs, Malaysia at the 32nd ASEAN Ministerial Meeting, Singapore, 23 July 1999, Paragraph 15, <
165 addition to deepening co-operation in functional areas such as trade, investment, defence, education, environment, science and technology, the two sides agreed to maintain close and frequent contacts at the officials, private business and people-to- people levels as well as to consult and work together on regional and international issues of common concern in ASEAN, ARF, APEC, ASEM, the UN, the World Trade Organisation and other multilateral forums.299 In relation to the South China Sea they agreed to the maintenance of peace and stability in the area “and to promote the settlement of disputes through bilateral friendly consultations and negotiations” consistent with the recognised principles of international law, including the LOSC.300 No mention was made about establishing a mechanism for dialogue on contested areas, such as the joint working group formula adopted by China and the Philippines in 1996 following the former’s occupation of Mischief Reef.
Overall there was a moderate correspondence between predicted and observed government behaviour. The predicted conflictual behaviour was confirmed as was the use of direct action and diplomacy. By contrast, the hypothesised extensive commitment or denial of regime resources was not observed. Rather, a moderate amount of resources was committed to the issue.
Philippines
The predominant leader was identified as the decision unit. In this case, the foreign policy behaviour of a government theoretically depends on the leader’s orientation to international affairs. That is, whether the leader is sensitive or insensitive to advice and information from the political environment in making a foreign policy decision.301 An insensitive predominant leader may use a strongly held worldview to select only incoming material that supports pre-existing beliefs.302 Such a leader is considered self-contained and analysis of their personality provides insight
299 Ibid., Paragraphs 2, 4 and 7. 300 Ibid., Paragraph 9. 301 Hermann and Hermann, “Who makes Foreign Policy Decisions and How”, p. 365. 302 Ibid.
166 into the government’s possible foreign policy behaviour.303 Reflecting their strong sense of what should be done and how, a self-contained leader is predicted to engage in conflictual behaviour, to either strongly commit regime resources or deny them completely and to use economic and military channels as well as or in lieu of diplomacy.304
By contrast, a sensitive leader is receptive to new information and advice.305 Rather than subscribing to a rigid worldview guiding domestic responses founded on a ‘one-size-fits-all’ approach, a sensitive leader favours a flexible and pragmatic path that reflects the nuances of the particular case.306 Understanding the likely foreign policy behaviour of the government then requires analysis of the environmental context in which the leader operates. The leader in this case is externally influenceable, receptive to outside cues and information in making a foreign policy decision.307 Predicted foreign policy behaviour is characterised by moderation and adaptability.308 Reliance is placed on diplomacy, co-operative or neutral action and the commitment of a moderate amount of regime resources.309
Several factors indicate that in relation to the Philippines’ behaviour in internationalising the Spratlys dispute Presidents Ramos, Estrada and Arroyo were sensitive to their environmental circumstances, making them externally influenceable. Each recognised the weak capability of the country to exert economic or military pressure on China and Malaysia regarding their occupation of features in the Kalayaan Island Group. Each supported modernisation of the armed forces and the revival of military co-operation with the US through the Visiting Forces Agreement. President Arroyo, for example, considered “the military alliance with the US is a strategic asset for the Philippines” and a broader security relationship with Washington was imperative to protect the country’s interests.310 Each president also
303 Ibid., p. 366. 304 Ibid., p. 373. 305 Ibid., p. 366. 306 Ibid. 307 Ibid. 308 Ibid., pp. 375-76. 309 Ibid., p. 376 310 Arturo Bariuad, “Broader security ties with US imperative: Arroyo”, The Straits Times, 12 July 2001.
167 recognised the importance of ASEAN. Ramos, for example, dispatched Foreign Affairs Secretary Domingo Siazon and Undersecretary Rodolfo Severino to lobby ASEAN foreign ministers to issue a collective statement following China’s 1995 occupation of Mischief Reef. Estrada emphasised diplomacy as the only practical approach to resolving the row with Kuala Lumpur over its occupation and construction on Investigator Shoal and Erica Reef.311 Foreign Affairs Secretary Siazon, a close adviser to Estrada, made an important distinction, however. Unlike Manila’s reaction to China’s construction in Mischief Reef, Siazon indicated that Malaysia’s actions would be handled differently: “Malaysia is part of the family. In the ASEAN family, we have more ways of resolving our problems by ourselves.”312
A further source of external influence was the advisers on which each president relied. In the case of Ramos this comprised Jose Almonte, Director-General of the National Security Council and National Security Adviser, Foreign Affairs Secretary Roberto Romulo and his successor, Domingo Siazon,313 and Undersecretary Rodolfo Severino.314 Based on a friendship of more than twenty-five years standing, Almonte had a strong informal influence in shaping the president’s views and actions on a range of policy issues.315 Romulo, Siazon and Severino provided the foreign policy expertise and managed implementation of the internationalisation project. Estrada appeared to prefer the advice of the Department of Foreign Affairs,316 in particular Secretary Siazon and Undersecretary Lauro Baja. Reflecting a correct but not close relationship with her foreign affairs secretary and
311 For example, while reserving the possibility of erecting structures on Philippines-claimed features Estrada also indicated that “We will exhaust all means to arrive at a diplomatic solution.” Ranjan Roy, “Islands’ dispute raises temperature in South China Sea”, Associated Press, 16 July 1999. 312 “Philippines seeks Malaysian clarification over Spratlys building”, Agence France-Presse, 22 June 1999. 313 Romulo was Secretary between June 1992 and April 1995. Siazon succeeded him in May 1995 and held the position until January 2001. 314 Severino was appointed Secretary-General of ASEAN in January 1998, stepping down in 2002. 315 See for example, Cibulka, “The Philippine Foreign Policy of the Ramos Administration”, p. 129; Jose Manuel Tesoro and Antonio Lopez, “From Behind the Throne: A Top Adviser Quietly Struggles to Reshape a Nation”, Asiaweek, 15 March 1996; Wilfrido V. Villacorta, “The Curse of the Weak State: Leadership Imperatives for the Ramos Government”, Contemporary Southeast Asia 16(1), 1994, p. 71 and p. 88. 316 Interview with Aileen San Pablo-Baviera, Associate Professor, Asian Center, University of the Philippines, Manila, December 2001.
168 concurrent vice-president Teofisto Guingona,317 President Arroyo appeared to favour the advice of National Security Adviser Roilo Golez over the career diplomats.
To what extent does the predicted and actual foreign policy behaviour of the identified decision unit match? In relation to reliance on diplomacy, this characteristic united the approaches of Presidents Ramos, Estrada and Arroyo. Bilaterally, diplomacy focused on China, Malaysia and Vietnam. Ramos quickly protested to Beijing its 1995 occupation of Mischief Reef and supported the conclusion of a bilateral code of conduct, which took the form of principles set out in an August 1995 joint statement. In November that year a joint statement with Vietnam established principles for a similar bilateral code of conduct. Estrada also eschewed a confrontational approach in relation to Mischief Reef and Erica Reef.318 Diplomacy was emphasised in dealing with the Investigator Shoal issue, with presidential spokesman Fernando Barican anticipating a “swift, peaceful and diplomatic resolution of this issue” without any adverse affect on the close neighbourly relations between the two countries.319
In principle, Manila could point to a number of positive outcomes from its bilateral diplomacy. They included understandings reached with China and Vietnam in 1995 on principles for codes of conduct320 and the 1996 establishment with China of three working groups on fisheries co-operation, marine environmental protection and confidence-building measures. In reality, the initiatives did little to bolster Manila’s sovereignty claim. Not only did foreign vessels continue to intrude into
317 While retaining the post of Vice-President, Guingona resigned as Foreign Affairs Secretary in July 2002 in protest at President Arroyo’s decision to extend the presence of US troops in the Philippines as part of the global war on terrorism. Guingona was replaced as Foreign Affairs Secretary by Blas Ople. 318 See for example, “Caution urged on Spratly issue”, Manila Bulletin, 11 November 1998. 319 “Philippines plays down row with Malaysia”, Agence France-Presse, 25 June 1999. Barican ignored two problems dogging the relationship: the unresolved territorial claim to Sabah and displeasure in Kuala Lumpur about President Estrada’s support for the jailed Anwar Ibrahim, Malaysia’s former deputy prime minister. 320 See Joint Statement RP-PRC Consultations on the South China Sea and on Other Areas of Cooperation, 9-10 August 1995, Manila. Reproduced in Scott Snyder, Brad Glosserman and Ralph A. Cossa, Confidence Building Measures in the South China Sea, Issues and Insights No. 2-01, Pacific Forum CSIS, Honolulu, 2001, pp. D-1 – D-2, <
169 Philippines-claimed waters321 but also China reinforced its position on Mischief Reef in 1998 despite the bilateral code of conduct (see Chapter 6). Suggestions that Vietnam was expanding its structures on Cornwallis South Reef and Allison Reef within the Philippines-claimed area were a further cause of concern for Manila.322 And attempts to draw support from the UN (through its Secretary-General), the US and Japan were unsuccessful.
At the multilateral level, the president’s interlocutors targeted ASEAN, ARF, ASEM and interparliamentary forums in Europe and South America. In their personal capacity, officials advanced Manila’s position in the informal “track two” Workshops on Managing Potential Conflicts in the South China Sea and the Council for Security Co-operation in the Asia-Pacific (CSCAP). Leszek Buszynski’s comment that Manila has obtained limited assistance from ASEAN323 can be extended to include the other outreach targets. Apart from diplomatic expressions of support, neither international forums nor the UN nor individual countries have rallied substantively to the Philippines’ internationalisation call. In the absence of any meaningful ability to exert economic and military pressure on the other claimants, however, Manila has little alternative but to persist with diplomacy.
The second predicted behaviour is co-operative or neutral action. While Ramos’ behaviour overall was co-operative, assertive activities also occurred. The military destroyed Chinese marker stones on features near Mischief Reef, an action that would have required high-level approval given its sensitivity. The navy took a group of local and international journalists near the reef, which China labelled “provocative”.324 Ramos did not yield immediately to China’s demands that its
321 “Sea Traffic Near Disputed Spratlys Increasing – Philippines” Associated Press, 18 July 2002; “DFA fears more sightings of claimants in Kalayaan”, Manila Standard, 18 November 2001; “Sightings of Viet ships up at Kalayaan Group”, Manila Standard, 17 November 2001; “Navy says PRC, SRV boats intruded into Philippine-controlled waters in Spratlys”, Philippine Daily Inquirer, 23 April 2001. 322 “Vietnam denies expanding fortifications in Spratlys”, Deutsche Presse-Agentur, 21 October 1999; “Incursions continue in the South China Sea”, BusinessWorld (Philippines), 21 October 1999; “Philippines says Vietnam has fortified structures on Spratlys” Deutsche Presse-Agentur, 20 September 1999. 323 Buszynski, “Realism, Institutionalism, and Philippine Security”, p. 492. 324 Noel M. Morada and Christopher Collier, “The Philippines. State Versus Society?” in Muthiah Alagappa (ed.), Asian Security Practice. Material and Ideational Influences, Stanford University Press, Stanford, 1998, p. 573.
170 fishermen arrested within the Philippines’ EEZ in March 1995 be released. They were freed only when China agreed to hold bilateral talks, culminating in the August 1995 joint statement.325
Estrada continued the co-operative approach. In 1999 during the APEC Leaders Summit in Kuala Lumpur he and Jiang Zemin agreed to explore all peaceful means to resolve the Spratlys dispute. Subsequently, during Estrada’s May 2000 visit to Beijing the two leaders agreed to refrain from actions that might complicate or escalate the situation.326 This understanding was reflected in the Joint Statement Between the Government of the People’s Republic of China and the Government of the Republic of the Philippines on the Framework of Bilateral Cooperation in the Twenty-First Century signed on 16 May 2000 by the respective foreign ministers, Tang Jiaxuan and Domingo Siazon, in the presence of the two presidents.327 In the joint statement, both sides committed themselves to maintain peace and stability in the South China Sea and to promote a peaceful settlement of disputes through bilateral consultations and negotiations in accordance with the principles of international law, including the LOSC. In addition, they reaffirmed their adherence to their 1995 joint statement and agreed not to take actions that might complicate or escalate the situation. The activities of the joint working group on confidence building measures were to be progressed. Finally, both sides agreed to contribute positively to the formulation and adoption of the regional code of conduct.328
President Arroyo reiterated co-operation as the cornerstone of Manila’s diplomacy. Soon after her installation as president, she emphasised that the Spratlys dispute should be handled “in the spirit of cooperation and not confrontation.”329 Giving effect to this sentiment, during her October 2001 visit to China Arroyo agreed to President Jiang’s proposal that the two countries identify projects for joint
325 Ibid., p. 574. 326 Diego C. Cagahastian, “Erap cuts short China state visit, returns to Manila”, Manila Bulletin, 20 May 2000. 327 Full text of the Joint Statement at <
171 development in the disputed area.330 Arroyo’s preliminary suggestions for co- operative projects were marine conservation and environmental protection.331 She reiterated, however, that such co-operation did not mean Manila was forgoing its push for a regional code of conduct.332
The last theoretically predicted behaviour is the commitment of a moderate amount of regime resources to the issue. Manila’s actions revealed a mix of moderate and high commitment of regime resources. On the one hand, a moderate amount of diplomatic resources was applied selectively in an attempt to focus international attention on each new development: Mischief Reef, Investigator Shoal and Erica Reef. Specifically, Manila concentrated its efforts on ministerial level meetings of ASEAN, ARF and ASEM. Similarly, occasions that constituted ‘targets of opportunity’, such as Estrada’s meeting with President Clinton on the margins of the 1999 APEC Leaders Summit in Auckland and with UN Secretary-General Annan, were used to push Manila’s call for support.
On the other hand, from early 1999 the Philippines devoted a high level of diplomatic resources in leading the development of a regional code of conduct in the South China Sea (see Chapter 7). The code represented an additional strand in Manila’s internationalisation approach. Both Presidents Estrada and Arroyo emphasised the positive contribution a code would make to managing the South China Sea issue,333 lending support to the commitment of regime resources to facilitate its conclusion. In particular, it provided an opportunity to embed within a multilateral instrument several matters on which Manila had a clear interest but on which it was unlikely to receive assent in bilateral discussions: no new occupation of features and a ban on new construction or expansion on those already occupied unless undertaken bilaterally or multilaterally. By building support through a multilateral process Manila may have calculated that it could leverage additional
330 Marichu Villanueva, “Philippines, China agree to identify projects for joint development of Spratlys”, Philippine Star, 2 November 2001. Reprinted in BBC Monitoring Asia Pacific, 2 November 2001. 331 Ibid. 332 Ibid. 333 On Estrada’s support for the code see for example, “Presidents call for negotiations”, China Daily, 17 May 2000. On Arroyo’s view see for example, “Manila to promote cooperation in the Spratlys”, Kyodo News, 5 March 2001.
172 diplomatic and moral pressure to check further actions by China, Malaysia and others. For example, during discussion of the first draft of the code of conduct at the meeting of ASEAN foreign ministers in July 1999 Malaysia opposed a provision banning further construction on occupied features.334 Reportedly, Malaysia’s opposition led to the draft’s referral to an ASEAN working group that did not meet until October that year.335 When the draft code was eventually presented to ASEAN heads of state at their summit meeting in November 1999 the provisions concerning no new occupation and no further construction were retained.
Overall, there was a close match between predicted and actual foreign policy behaviour. A reliance on diplomacy and co-operative action was clearly evident. A mixed picture emerged concerning the commitment of regime resources. In responding to individual events such as Investigator Shoal, Erica Reef and Mischief Reef, a moderate amount of regime resources was applied in bilateral and selected international settings. Against this, a high commitment of resources was made between 1999 and 2002 through Manila’s championing of a regional code of conduct. Manila may have calculated that the high commitment of resources was justified because a regional level instrument would yield more benefits compared to relying solely on bilateral dialogue.
4.6 Domestic Politics as a Contextual Influence
Malaysia
Between 1997 and 1999 domestic political issues in Malaysia eclipsed foreign affairs, notwithstanding Kuala Lumpur hosting the fourth meeting of the ARF and the Second ASEAN Informal Summit in 1997, the sixteenth Commonwealth Games and the tenth APEC Ministerial Meeting in 1998. Bilateral difficulties with Indonesia, the Philippines, Singapore and the US were also apparent
334 Arpon, “Clinton said US to defend RP in Spratlys –Estrada”. 335 Michael Richardson, “On Eve of Annual Talks, ASEAN Members Are Split Over Spatlys Dispute”, International Herald Tribune, 23 July 1999.
173 during this period.336 Indeed, following the arrest of then Deputy Prime Minister Anwar Ibrahim in September 1998, John Funston observes that “Malaysian politics has been in a state of confrontation and upheaval.”337
Anwar’s arrest and trials on charges of corruption and sexual misconduct prompted mass protests in 1998 and 1999, generating new problems (and old responses, through detentions under the Internal Security Act) for a government already under pressure from the domestic impacts of the Asian financial crisis. The impacts included the employment and welfare multiplier effects of capital flight by foreign investors, erosion of confidence in Mahathir’s economic policy management and pressure to reform corporate governance by addressing corruption and cronyism.
Based on rumours of an early general election, all the political parties began campaign preparations in early 1998.338 Ultimately, the election was held in November 1999; its results compounded the challenges facing the government.339 While retaining power, the regime’s legitimacy was eroded.340 The ruling Barisan Nasional coalition won 148 of the available 193 seats (that is, 76.68 per cent of seats) and 56.5 per cent of votes while opposition parties accounted for 45 seats (23.32 per cent of seats) and 43.5 per cent of votes.341 The performance of the United Malays National Organisation (UMNO), the major party in the BN, was revealing. It lost almost half the Malay vote, principally to the Parti Islam SeMalaysia (PAS),342
336 For succinct summaries of developments in Malaysia between 1997 and 1999 see Greg Felker, “Malaysia in 1999. Mahathir’s Pyrrhic Deliverance”, Asian Survey XL(1), 2000, pp. 49-60; Greg Felker, “Malaysia in 1998. A Cornered Tiger Bares Its Claws”, Asian Survey XXXIX(1), 1999, pp. 43- 54; James Chin, “Malaysia in 1997. Mahathir’s Annus Horribilis”, Asian Survey XXXVIII(2), 1998, pp. 183-89. 337 John Funston, “Malaysia. Developmental State Challenged” in John Funston (ed.), Government and Politics in Southeast Asia, Institute of Southeast Asian Studies, Singapore, 2001, p. 164. 338 James Chin, “A new balance: the Chinese vote in the 1999 Malaysian general election”, South East Asia Research 8(3), 2000, p. 288. 339 Useful analyses of the election include John Funston, “Malaysia’s Tenth Election: Status Quo, Reformasi or Islamisation?”, Contemporary Southeast Asia 22(1), 2000, pp. 23-59; William Case, “Malaysia’s General Elections in 1999: A Consolidated and High-Quality Semi-democracy”, Asian Studies Review 25(1), 2001, pp. 35-55. 340 Funston, “Malaysia. Developmental State Challenged”, p. 196. 341 Ibid., p. 182. Figures derived from Table 5.1 thereon. The table shows clearly that the Barisan Nasional (BN) performed poorly in comparison with the 1995 election results, where it had won 162 seats out of an available 192 (84.38 per cent of seats) and 65.2 per cent of votes. 342 Felker, “Malaysia in 1999”, p. 54.
174 reflecting strong disenchantment with Mahathir’s leadership and patronage politics343 and his treatment of Anwar.344 Were it not for the Chinese vote for BN member parties, the coalition would have lost its hold on power.345 On 22 June 2002 Mahathir announced his retirement from his party posts and by association, the prime ministership. Following intense discussions, it was announced a few days later that the resignation would take effect from October 2003. Abdullah Ahmad Badawi was named his successor.346
These domestic travails suggest little incentive should have existed to undertake the attention-drawing occupation of Investigator Shoal and Erica Reef. On the other hand, a number of factors with links back to domestic politics may have made such action appealing. First, leadership status enhancement. As noted earlier, one consequence of the regional economic crisis was the removal of Indonesia’s President Soeharto. With his departure the informal leadership role Soeharto had exerted in ASEAN became vacant, creating an opportunity for Mahathir to fill the vacuum. In doing so it would help enhance Malaysia’s profile and leadership credentials in the organisation, advancing national, and by extension Mahathir’s, prestige at a particularly challenging time domestically. Consolidating this, in 2002 Malaysia successfully brokered a declaration of conduct in the South China Sea to break the intra-ASEAN deadlock on a draft code of conduct (see Chapter 7) and championed, albeit unsuccessfully, the establishment in Kuala Lumpur of a permanent secretariat to service the ASEAN+3 forum. Malaysia has been a driving force behind this forum, a variant of its unsuccessful East Asia Economic Caucus (EAEC) proposal of the mid-1990s.
343 William Case, Politics in Southeast Asia. Democracy or Less, Curzon, Richmond, 2002, pp. 141- 42. 344 In-Won Hwang, “Authoritarianism and UMNO’s Factional Conflicts”, Journal of Contemporary Asia 32(2), 2002, pp. 212-13, pp. 220-21. On post-election responses see for example, ibid., pp. 221- 22; “‘Corruption’ warning for Malaysian rulers”, BBC World News: Asia-Pacific, 20 June 2001; Michael Vatikiotis and Lorien Holland, “Under Siege in A Phoney War”, Far Eastern Economic Review, 5 April 2001, pp. 22-24. 345 Felker, “Malaysia in 1999”, p. 54. James Chin, in examining the role of the Chinese vote for the BN in the 1999 general election, suggests it was not a new phenomenon. Rather, he suggests its roots lie in a swing that emerged in the 1995 election. See Chin, “A new balance”, pp. 295-99. 346 S. Jayasankaran and Michael Vatikiotis, “Mahathir’s Long Goodbye”, Far Eastern Economic Review, 4 July 2002, pp. 12-15; “The long goodbye”, Economist, 29 June 2002, pp. 27-28. Two assessments of the challenges facing Abdullah as leader are Michael Vatikiotis, “The Last Hurrah”, Far Eastern Economic Review, 3 July 2003, pp. 12-16 and Michael Vatikiotis and S. Jayasankaran, “Extremists, Step Aside”, Far Eastern Economic Review, 5 September 2002, pp. 12-16.
175 Second, proactivity in securing the features to avert domestic criticism of inaction or hesitation. Mahathir alluded to this in stating that Malaysia had built on the two features because it feared other claimants would do so, as had already happened on several other reefs in the past. In particular, Mahathir noted that the Philippines occupied Commodore Reef while Vietnam held Barque Canada Reef and Amboyna Cay. Malaysia had never questioned these occupations, however.347 While the Malaysian public appears ambivalent about the country’s claim in the Spratlys,348 any loss of territory might have sparked a re-evaluation potentially damaging to the government and compounded pre-existing problems.
The ICJ’s decision to award sovereignty of Sipadan and Ligitan islands to Malaysia, for example, provoked strong attacks by Indonesia’s politicians and media on the government’s “poor diplomacy” despite the islands not being well known to most Indonesians.349 In the wake of the court’s decision, over the next five years the Indonesian government intends to provide economic incentives to entice 300,000 families to settle on 88 islands near its borders and thereby prevent neighbouring countries from claiming them.350 “We will relocate people to these islands for the sake of our sovereignty” according to Djoko Sidik Pramono, Director-General of the Ministry of Manpower and Transmigration.351 Natuna Island is the first priority, with 960 families already settled there and a further 1000 anticipated.352 The Philippines, too, has implemented a settlement approach to consolidate occupation. In September 2002 a group of about 90 Filipinos, including six families of fishermen, embarked from Puerto Princesa city to the Philippines-occupied island of Thitu (Pag-asa) in the Spratlys to build a community there as part of the Kalayaan Settlement Program. The group left with the approval of the governor of Palawan province, with which the Philippines-claimed features are administratively incorporated. Eventually 400-500 people may be settled on the island.353
347 “Structure is on Malaysian Territory – Dr Mahathir”. 348 See reference in Footnote 264 of this chapter. 349 Devi Asmarani, “Indonesian govt. slammed for ‘poor diplomacy’”, The Straits Times, 19 December 2002. 350 “Indonesia to Relocate People to Islands at Border”, Associated Press, 4 June 2003. 351 Ibid. 352 Ibid. 353 Jerry Esplanada, “Pag-asa – Island paradise is Dangerous Ground”, Philippine Daily Inquirer, 27 September 2002; Jim Gomez, “Philippine governor sends settlers to disputed Spratlys island to strengthen territorial claim”, Associated Press, 23 September 2002.
176 A third factor was that occupying the features would present a fait accompli before detailed negotiation of the draft code of conduct commenced. Not only would this secure the features for Kuala Lumpur but also its timing would avert criticism that it was going against the letter of the draft code, even if it violated its spirit.
Philippines
For the Philippines one entry point for the Spratlys dispute into domestic politics was the issues of military modernisation and the Visiting Forces Agreement (VFA). The theme of reviving military co-operation with the US in terms of equipment sourcing, personnel training and possible basing ambitions connected both issues. Non-governmental groups were especially critical. This included assertions that “[w]ar scares over the Spratly Islands have also had the effect of promoting the military emphasis in Philippine government policy”354 and “[t]hey [the government] are trying to drum up the threat from China in the Spratly Islands. … The scare campaign about the Spratlys is really about pushing us back towards welcoming back US forces.”355 Officials argued that upgrading defence capability and ratification of the VFA would strengthen capacity to address external threats to security, including in the Spratlys. In 1997 Defence Secretary Renato de Villa indicated there was a clear necessity to rapidly modernise the armed forces, especially the navy and airforce356 while in 1998 President Estrada argued that the continuing dispute with China over ownership of part of the Spratly Islands closest to the Philippines underlined the relevance of such an agreement.357
Occupation of Philippines-claimed features by China and Malaysia and consistent illegal incursions by foreign fishermen into territorial waters claimed by Manila prompted political and public frustration among Filipinos. For example, Senator Blas Ople sought a strongly worded protest of Malaysia’s occupation of
354 Daniel B. Schirmer, “By another name: US bases in the Philippines”, <
177 Erica Reef to avoid the matter being treated dismissively. Within the bureaucracy there appeared no consensus on whether or not China represented a threat to the Philippines following its occupation of Mischief Reef.358 The weak responses Manila was able to mount were also of concern, and widely reported in the media.
The opportunity cost of chronic internal security problems in southern Mindanao has been diversion of resources and political attention from domestic development and foreign policy issues, such as the Spratlys dispute.359 This is not to say that successive presidents neglected the foreign policy arena; as section 4.3 indicated, each actively projected Philippine interests internationally.360 Nonetheless, domestic security (and economic) problems demanded sustained high-level attention. While Ramos concluded a peace agreement with the Moro National Liberation Front (MNLF) in 1996,361 this did not include the splinter Moro Islamic Liberation Front (MILF).362 In 1997 the government entered peace negotiations with the MILF but little progress occurred.363 By the time Estrada assumed office in mid-1998 relations with the MILF had deteriorated and conflict erupted in 1999.364 With scant prospect of a negotiated settlement, in 2000 Estrada declared “all-out war” against the MILF.365 In contrast to Estrada’s hard-line stand, soon after her installation as president Dr. Arroyo indicated her preference for negotiations to resolve the insurgency problem. This would enable the armed forces to shift their focus to
358 Morada and Collier, “The Philippines. State Versus Society?”, p. 574. 359 Angelo Reyes, Secretary of National Defence states that “it is the insurgent and terrorist threat that is impeding our development.” The estimated daily cost in 2000 of fighting the insurgents was estimated by one analyst as ranging from US$500,000 to US$2.3 million. On Reyes’ statement see “Interview: Angelo Reyes, Secretary of National Defence, Republic of the Philippines”, Jane’s Defence Weekly, 28 August 2002, p. 32. On the economic cost of fighting insurgents see Abinales, “Coalition Politics in the Philippines”, p. 160. 360 See for example, Cibulka, “The Philippine Foreign Policy of the Ramos Administration”, pp. 123- 31 for a discussion of foreign policy issues addressed by President Ramos. 361 Carolina G. Hernandez, “The Philippines in 1996. A House Finally in Order?”, Asian Survey XXXVII(2), 1997, pp. 204-07. As Hernandez points out on p. 205, Indonesia and the Organization of Islamic Conference played important brokering roles. 362 Mel C. Labrador, “The Philippines in 2001. High Drama, a New President, and Setting the Stage for Recovery”, Asian Survey XLII(1), 2002, p. 146. 363 Ibid. 364 See ibid.; Emil P. Bolongaita, Jr., “The Philippines in 1999. Balancing Restive Democracy and Recovering Economy”, Asian Survey XL(1), 2000, p. 76. 365 Labrador, “The Philippines in 2001”, p. 146. See also Labrador, “The Philippines in 2000”, pp. 224-26.
178 modernisation and external threats, including in the Spratlys.366 On 20 February 2001 she suspended military operations against the MILF and established a negotiating team.367 A ceasefire agreement brokered by Malaysia was signed in August 2001368 and a further deal concluded in July 2003.369 This success contrasts with the inability to date to quell Abu Sayyaf’s activities.370
The 1992 eviction of the US military from its bases at Clark and Subic Bay left the Philippines exposed to potential external threats, a point not lost on then Defence Secretary Ramos. China’s 1995 and 1998 actions in Mischief Reef demonstrated this weakness unambiguously and catalysed a re-evaluation by the Philippines leadership about how best to strengthen external threat deterrence. Presidents Ramos, Estrada and Arroyo supported modernisation of the armed forces to provide a stronger and more balanced capability but implementation was slowed by inter-party politics and economic stringencies. While in the early 1990s a sense of ‘standing on one’s own feet’ was discernible behind the decision to evict the US from its bases in the archipelago, by the mid- to late-90s a rethinking of the strategic value of Manila’s defence relationship with Washington was evident. In the wake of Mischief Reef political and public support for reinvigorating military ties with the US grew, although it was not unanimous. This remains the case.
4.7 Summary
This chapter examined the different means employed by Malaysia and the Philippines during the 1990s to further a common end, namely bolstering their respective sovereignty claim in the Spratlys. While Kuala Lumpur focused on occupation by seizing Investigator Shoal and Erica Reef in mid-1999, Manila sought
366 “Intelligence - Arroyo Seeks Peace for Military Reform”, Far Eastern Economic Review, 15 February 2001, p. 10. The article also quotes Armed Forces Chief-of-Staff Angelo Reyes as stating “The theory is that if we are able to reduce the domestic threat to a level that the police can handle it, then we can shift to an external defence mode.” 367 Anthony Davis, “Arroyo seeks to “heal and build””, Jane’s Intelligence Review 13(4), 2001, p. 36. 368 Labrador, “The Philippines in 2001”, p. 146. 369 “Muslim rebels in Philippines ceasefire deal”, Associated Press. Reprinted in Sydney Morning Herald, 19-20 July 2003. 370 Labrador, “The Philippines in 2001”, p. 147
179 to garner international support for its position through diplomacy and media attention.
The decision unit in each country differed. In the case of Malaysia this was identified as the National Security Council. The council grouped everyone within the regime whose support was essential for committing resources to the issue. Prime Minister Mahathir’s membership of the group meant that his endorsement of a decision was unlikely to be reversed by external opponents. In the case of the Philippines the predominant leader, spanning Presidents Ramos, Estrada and Arroyo during the period examined here, was identified as the decision unit. Their regular, active participation in the decision process to internationalise the Spratlys dispute and continuity in its implementation was evident. Through the NSC and the Cluster E the President was able to include selected others as part of the decision process but neither group had veto power over any decision.
As a self-contained decision unit, Malaysia’s National Security Council was considered to have reached consensus quickly on the course of action concerning the two features. Factors identified as prompts were domestic politics relating to pressures arising from the local impacts of the regional financial crisis, the outpouring of protest against the arrest and trials of Anwar Ibrahim and the uncertainty attaching to a general election set for November 1999. Against this backdrop, any loss of Malaysian-claimed features to a pre-emptive action by another claimant would have compounded problems for the regime. Developments in the external environment were also relevant, in particular China’s seizure of Mischief Reef and the imminent commencement of negotiations on a regional code of conduct.
Overall, there was a moderate correspondence between predicted and observed behaviour by Kuala Lumpur. The hypothesised conflictual behaviour was confirmed as was the use of direct action and diplomatic instruments. By contrast, the predicted extensive commitment or denial of regime resources was not observed. Rather, a moderate amount of state resources was applied.
180 Turning to the Philippines, Presidents Ramos, Estrada and Arroyo were sensitive to their environmental circumstances, making them externally influenceable decision units. Relevant factors included the opportunity costs of devoting significant resources to internal security problems; the drive to modernise the military so as to strengthen its capability to deal with external threats; a reinvigoration of defence co- operation with the US following the estrangement of the early 1990s; and differences within the bureaucracy about how to deal with China and, more fundamentally, whether indeed it represents a threat to the Philippines following its occupation of Mischief Reef.
The match between predicted and actual foreign policy behaviour was close. A reliance on diplomacy and co-operative action was evident. A nuanced picture emerged concerning the commitment of regime resources. In responding to individual events such as Investigator Shoal, Erica Reef and Mischief Reef, a moderate amount of regime resources was applied. Against this, a high commitment of resources between 1999 and 2002 was observed through Manila’s championing of a regional code of conduct. The rationalisation may have been that a high commitment of resources to this issue was justified because a multilateral instrument would yield more benefits and bring greater pressure to bear compared to a bilateral measure.
Our focus turns now from the sovereignty issue to that of extended maritime jurisdiction. While they are distinct concepts technically, their point of intersection is the fact that territorial sovereignty determines jurisdictional rights and responsibilities. The next chapter examines China’s actions in establishing a comprehensive extended maritime jurisdictional regime covering the Spratlys, among other areas.
181 5.0 CHINA’S MARITIME JURISDICTIONAL REGIME AND THE SPRATLY ISLANDS
Under international law, territorial sovereignty determines jurisdictional rights and responsibilities. During the 1990s, little progress was made in resolving the competing sovereignty claims in the South China Sea. This did not stop China enacting a comprehensive maritime jurisdictional regime applying to the Spratly Islands, among other areas. At least two reasons may underlie its action. First, to bolster the jurisdictional pillar of its claim in the Spratlys to stand alongside its argument of indisputable sovereignty over the area.1 Adding urgency to this motivation was the entry into force of the third United Nations Convention on the Law of the Sea (LOSC) in 1994, which confirmed the establishment of a suite of maritime zones over which countries exercised sovereignty and sovereign rights (Figure 10 shows the maritime zones referred to in the convention). Second, to balance the jurisdictional measures introduced many years earlier by several of the other Spratly claimants. For example, Malaysia declared a 12 nautical mile territorial sea in 1969, enacted its continental shelf act in 1966 and proclaimed an exclusive economic zone (EEZ) in 1980 followed by a specific act in 1984.2 In addition, in 1979 the Malaysian government announced a new map, the so-called Peta Baru (“New Map”), defining the boundary of the country’s territorial waters and continental shelf.3 The baselines from which this zone, and the territorial sea, is derived remain unpublished, however. The Philippines enacted a statute in 1961 defining the baselines of the territorial sea, issued a presidential proclamation in
1 On China’s claim of indisputable sovereignty over the Spratly Islands see Ministry of Foreign Affairs of the People’s Republic of China, “Historical Evidence to Support China’s Sovereignty over Nansha Islands”, 2000, <
182 Figure 10: Maritime Zones
Source: R.R. Churchill and A.V. Lowe, The law of the sea, Third edition, Manchester University Press/Juris Publishing, Manchester and New York, 1999, p. 30.
183 1968 declaring all mineral and other natural resources in the Philippines continental shelf as subject to its jurisdiction and control and published a presidential decree in 1978 establishing an EEZ.4
This chapter looks behind the maritime jurisdictional measures introduced by China to examine who made decisions on their enactment and how this shaped foreign policy behaviour. We begin by reviewing Beijing’s regime covering baselines, territorial sea, contiguous zone, EEZ and the continental shelf.5 Chinese conceptions of law are then discussed. The two main theoretical bases underpinning traditional Chinese legal culture are introduced6: the Confucianist concept of li7 and a contending approach termed Legalism, or fa. Their significance relates to their continuing influence on China’s contemporary legal culture.8 The next three sections apply the decision units approach outlined in Chapter 2 to identify who in Beijing and Manila was behind the enactment of the jurisdictional measures, to examine how they shaped foreign policy behaviour and to consider the role of domestic politics. Key findings are presented in the summary.
4 Republic Act No. 3046, An Act to Define the Baselines of the Territorial Sea of the Philippines, 17 June 1961 as amended by Republic Act No. 5446, An Act to Amend Section One of Republic Act Numbered Thirty Hundred and Forty-Six, Entitled “An Act to Define the Baselines of the Territorial Sea of the Philippines”, 18 September 1968; Presidential Decree No. 1599 Establishing an Exclusive Economic Zone and for Other Purposes, 11 June 1978; Presidential Proclamation No. 370 Declaring as Subject to the Jurisdiction of the Republic of the Philippines all Mineral and other Natural Resources in the Continental Shelf of the Philippines, 20 March 1968. The full text of these materials is published in Pacifico A. Castro, The Philippines and the Law of the Sea, Foreign Service Institute, Manila, 1983, pp. 31-37, pp. 41-42 and pp. 43-44. 5 Matters relating to jurisdictional control over fisheries, navigation, marine scientific research, marine environmental protection are not examined here. Useful reviews of China’s initiatives in these areas include Zou Keyuan, “Governing Marine Scientific Research in China”, Ocean Development and International Law 34(1), 2003, pp. 1-27; Zou Keyuan, “Navigation of foreign vessels within China’s jurisdictional waters”, Maritime Policy and Management 29(4), 2002, pp. 351-74; Zou Keyuan, “Implementing marine environmental protection law in China: progress, problems and prospects”, Marine Policy 23(3), 1999, pp. 207-25; Zou Keyuan, “The Establishment of a Marine Legal System in China”, The International Journal of Marine and Coastal Law 13(1), 1998, pp. 23-46. 6 Orts identifies other influences on Chinese legal theory: Buddhism, Daoism and Mohism. They are not discussed here. Eric W. Orts, “The Rule of Law in China”, Vanderbilt Journal of Transnational Law 34(1), 2001, pp. 51-52. In particular footnote 38 thereon. 7 I am grateful to Max Herriman for drawing my attention to the concepts of li and fazhi. Interview with Max Herriman, Chief Executive Officer, Sea Resources Management SDN BHD, Kuala Lumpur, October 2001. 8 Pitman B. Potter, The Chinese Legal System. Globalization and local legal culture, Routledge, London and New York, 2001, p. 7.
184 5.1 China’s Maritime Jurisdictional Regime
China’s closer engagement with the world economy has reinforced the linkages between its national laws and international norms, posing new challenges and opportunities for the domestic legal reform process.9 In the maritime domain, China’s full participation in the Third United Nations Conference on the Law of the Sea between 1973 and 198210 and the convention’s subsequent entry into force on 16 November 1994 provided impetus to the deeper penetration of international law norms into contemporary Chinese marine legislation.11 Less clear is whether China’s national interests were best served by championing in the conference the concerns of Third World countries against the United States and the former Soviet Union.12
Two aspects distinguish the maritime jurisdictional measures introduced by China in the 1990s. First, between 1992 and 1998 a comprehensive regime covering the full extent of its claimed maritime space was established. This was a commendable achievement. Second, the regime applying to the Spratly Islands group, among other areas, is based on the LOSC, reflecting Beijing’s status as a signatory and subsequently a party to that instrument. While discrepancies exist in its interpretation of several of the convention’s provisions, they are not unique to it. For example, while China’s use of a straight baseline along the entire length of its coast is questionable,13 so too is the way in
9 Ibid., p. 6-7. 10 On China’s position during the negotiation of the LOSC see Zhiguo Gao, “China and the LOS Convention”, Marine Policy 15(3), 1991, pp. 203-08; Jeanette Greenfield, China’s Practice in the Law of the Sea, Clarendon Press, Oxford, 1992; Michael Carr, “China and the Law of the Sea Convention”, The Australian Journal of Chinese Affairs 9, 1983, pp. 35-53. China did not participate in the 1958 Conference on the Law of the Sea and was not a party to the resulting four Geneva Conventions. 11 See for example Zou, “The Establishment of a Marine Legal System in China”, p. 28. The earliest reference by China to western writings on international law concerning marine space was in 1864. During the war between Prussia and Denmark the Qing administration successfully protested the former’s seizure of three Danish ships in the Bohai Sea, part of China’s “inner ocean”, by referring to the work of American scholar Henry Wheaton. Citation in Tie-ya Wang, International Law, China Law Press, Beijing, 1982, p. 17 cited in Liyu Wang and Peter H. Pearse, “The New Legal Regime for China’s Territorial Sea”, Ocean Development and International Law 25(4), 1994, p. 433. 12 See for example, Hyun-Soo Kim, “The 1992 Chinese Territorial Sea Law in the Light of the UN Convention”, International and Comparative Law Quarterly 43 (Part 4), 1994, pp. 894-96. 13 Max Herriman, “China’s Territorial Sea Law and International Law of the Sea”, Maritime Studies 92, 1997, pp. 16-17; Daniel J. Dzurek, “The People’s Republic of China Straight Baseline Claim”, IBRU Boundary and Security Bulletin 4(2), 1996, pp. 82-84.
185 which Bangladesh, Cambodia, Ecuador, Italy, Malaysia, Myanmar, North Korea, Russia, Spain, Thailand and Vietnam have interpreted this section of the LOSC.14
Baselines15
Accurate and credible definition of baselines is important since they represent the point of origin from which the outer limits of the territorial sea, the contiguous zone, the exclusive economic zone and the continental shelf are measured. Articles 5 to 14 of the LOSC specify the rules concerning the establishment of baselines.16
The normal baseline for measuring the breadth of the territorial sea is the “low- water line along the coast as marked on large-scale charts officially recognized by the coastal State.”17 Significantly, the basis for establishing the low-water line is undefined.
Drawing straight baselines by joining appropriate points in localities where the coastline is deeply indented and cut into, or if there is a fringe of islands along the coast in its immediate vicinity, or the presence of a delta and other natural conditions make the coastline highly unstable is permitted under Article 7 of the convention. This type of baseline should be used only where coasts are very irregular in their configuration and where the nature and geographic extent of the indentations make the use of normal baselines impractical. In addition, the baselines “must not depart to any appreciable extent from the general direction of the coast, and the sea areas lying within the lines must be sufficiently closely linked to the land domain to be subject to the regime of
14 Johan Henrik Nossum, “What Vietnam Could Gain from Redrawing its Baselines”, IBRU Boundary and Security Bulletin 9(4), 2001-2002, pp. 97-108; Robin R. Churchill and A. Vaughan Lowe, The law of the sea, Third edition, Juris Publishing/Manchester University Press, New York and Manchester, 1999, p. 39 and p. 146; J.R.V. Prescott, Political Frontiers and Boundaries, Allen and Unwin, London 1987, p. 146. 15 The treatment of baselines separate from the discussion of the territorial sea follows the rationale advanced by Churchill and Lowe. They note that since the baseline is now used to measure the outer limit of the different zones in the sea it no longer seems appropriate to consider baselines simply as part of the law relating to the territorial sea. Churchill and Lowe, The law of the sea, pp. 31-32. 16 For a detailed analysis see E.D. Brown, The International Law of the Sea, Volume I: Introductory Manual, Dartmouth Publishing Co., Aldershot and Brookfield, 1994, pp. 22-36. 17 United Nations Convention on the Law of the Sea, 1982, Article 5. The complete text of the convention is available at <
186 internal waters.”18 Chronic abuse of these criteria leads one scholar to suggest “it would now be possible to draw a straight baseline along any section of coast in the world and cite an existing straight baseline as a precedent”.19
Prior to 1949 China used the low water line as the baseline to measure its territorial sea.20 It changed to the straight baseline method in its Declaration on the Territorial Sea adopted on 4 September 1958,21 a position reaffirmed in the Law on the Territorial Sea and the Contiguous Zone of the People’s Republic of China promulgated on 25 February 1992 (hereafter referred to as the Territorial Sea Law).22 Under Article 15 of the Territorial Sea Law the Chinese government signals its intention to establish the baselines of the country’s territorial sea.
The coverage of the 15 May 1996 Declaration of the Government of the People’s Republic of China on the Baselines of the Territorial Sea of the People’s Republic of China includes part of its territorial sea adjacent to the mainland and also adjacent to the Xisha (Paracel) Islands.23 Joined by straight lines, forty-nine base points comprise the mainland section stretching from Shandonggaojiao on the Shandong peninsula to Junbijiao on the west coast of Hainan Island; in the Paracel Islands 28 base points are listed,24 which have the effect of enclosing the area. The remaining baselines of the
18 Article 7(3) of the LOSC. Kapoor and Kerr note, however, that the convention gives little guidance about the application of these criteria. D.C. Kapoor and A.J. Kerr, A Guide to Maritime Boundary Delimitation, Carswell, Toronto, Calgary and Vancouver, 1986, p. 36. 19 J.R.V. Prescott, “Straight and archipelagic baselines” in Gerald Blake (ed.), Maritime Boundaries and Ocean Resources, Croom Helm, Beckenham, 1987, p. 38. 20 Zou, “The Establishment of a Marine Legal System in China”, p. 28. 21 Ibid., p. 27. 22 See Article 3, Law on the Territorial Sea and the Contiguous Zone of the People’s Republic of China, 25 February 1992. The full text is published in United Nations, Division for Ocean Affairs and the Law of the Sea, Office of Legal Affairs, “Law on the Territorial Sea and the Contiguous Zone of the People’s Republic of China, 25 February 1992”, Law of the Sea Bulletin 21, 1992, New York, pp. 24-27. 23 Preamble, Declaration of the Government of the People’s Republic of China on the Baselines of the Territorial Sea of the People’s Republic of China, 15 May 1996. The full text is published in United Nations, Division for Ocean Affairs and the Law of the Sea, Office of Legal Affairs, Declaration of the Government of the People’s Republic of China on the Baselines of the Territorial Sea of the People’s Republic of China, 15 May 1996, Law of the Sea Bulletin 32, 1996, New York, pp. 37-40. 24 Park Hee Kwon, The Law of the Sea and Northeast Asia. A Challenge for Cooperation, Kluwer Law International, The Hague, 2000, p. 24.
187 territorial sea will be announced “at another time.”25 In the Paracels case, Daniel Dzurek identifies several problems: as a non-archipelagic state China is not entitled under the LOSC to use archipelagic straight baselines and the water to land area ratio required of an archipelago does not conform to Article 47(1) of the convention.26 In addition, the effect of applying the straight baseline approach in the Paracels is to enclose a wider area as China’s internal waters.27 While innocent passage is unaffected because the area enclosed was not previously considered internal waters,28 the difficulty relates to the sovereignty and maritime jurisdiction implications.
Similar problems may arise concerning the Spratlys. In Mark Valencia’s view, for example, drawing enclosing baselines here would be “highly provocative”.29 China’s use of straight baselines in the Spratlys would also create a large area of claimed EEZ and continental shelf overlapping with those of Brunei, Indonesia, Malaysia, the Philippines and Vietnam, complicating maritime boundary delimitations.30 These difficulties may lie behind one scholar’s view that for China the benefits of drawing straight baselines enclosing the Spratlys remain unclear.31
Concern about China’s baseline declaration was expressed by several countries. Malaysia’s Foreign Minister Abdullah Ahmad Badawi remarked at the inaugural ASEAN-China Post-Ministerial Conference held in July 1996 in Jakarta that “China’s
25 United Nations, Division for Ocean Affairs and the Law of the Sea, Office of Legal Affairs, Law of the Sea Bulletin 32, p. 40. 26 Dzurek, “The People’s Republic of China Straight Baseline Claim”, pp. 84-85. Article 47(1) of LOSC stipulates that the ratio of water to land area in an archipelago is to be between 1:1 and 1:9. 27 See ibid., p. 81. In particular the box figure on that page comparing the extent of China’s 1996 straight baseline declaration with a hypothetical straight baseline prepared by the United States Department of State and published as Office of the Geographer, US Department of State, Straight Baselines: People’s Republic of China, Limits in the Seas 43, Washington D.C., 1972. 28 See Article 8(2) of the LOSC. 29 Mark J. Valencia, “Tension in the South China Sea”, Far Eastern Economic Review, 19 April 2001, p. 31. 30 Yann-Huei Song and Zou Keyuan, “Maritime Legislation of Mainland China and Taiwan: Developments, Comparison, Implications, and Potential Challenges for the United States”, Ocean Development and International Law 31(4), 2000, p. 327. 31 Interview with Zhiguo Gao, Executive Director of the China Institute for Marine Affairs, State Oceanic Administration, Beijing, October 2001.
188 declaration of 15th May 1996 on its baselines have raised questions in ASEAN. We hope to receive some clarification from China on this declaration and what it means.”32 Qian Qichen, China’s Foreign Minister and head of delegation to the meeting, did not offer any explanation. Rather, his response was vague and evasive: “To develop long term, good neighborly and friendly relations with ASEAN is an important component of China’s foreign policy” and “both China and ASEAN attach great importance to ensuring a peaceful and stable environment in our region and are making concrete efforts for its maintenance and enlargement.”33 Both the Philippines and Vietnam objected to China’s declaration. Manila considered the enclosure of the Paracels disturbed the stability of the area, reversed the spirit of co-operation emerging in the South China Sea and was unhelpful to the resolution of the disputes there.34 In its note verbale transmitted by Vietnam’s Permanent Mission to the United Nations, Hanoi stated that China’s establishment of territorial baselines in the Paracels “constitutes a serious violation of the Vietnamese sovereignty over the archipelago” and declared the action null and void.35 Moreover, Hanoi noted that contrary to the LOSC China had given the Spratly archipelago the status of an archipelagic state and illegally annexed a substantial area of sea as internal waters.36
Territorial Sea and Contiguous Zone
Under Article 2 of the LOSC, within the territorial sea the coastal state exercises sovereignty, including over the air space, seabed and subsoil subject to the convention and other rules of international law. Article 3 provides the right for every
32 Statement by H.E. Datuk Andullah [sic] Haji Ahmad Badawi, Minister of Foreign Affairs of Malaysia, <
189 state to establish the breadth of the territorial sea up to a limit of 12 nautical miles as measured from publicised coastal baselines.
The delimitation of the territorial sea between states with opposite or adjacent coasts is covered in Article 15 of the LOSC. Where agreement between the states cannot be reached, neither is entitled to extend its territorial sea beyond the median line equidistant from the baselines used to measure the territorial sea. The only exception is where historic title or other special circumstances exist.
A primary objective of China’s 1992 Territorial Sea Law is “to enable the People’s Republic of China (PRC) to exercise its sovereignty over its territorial sea and its rights to exercise control over its contiguous zone, and to safeguard State security as well as its maritime rights and interests.”37 While the majority of the law’s seventeen articles are consistent with the relevant LOSC provision, several others are controversial.
First, in addition to the mainland and its offshore islands, the law’s geographic scope includes Taiwan, the Diaoyutai/Senkaku Islands, the Penghu Islands, the Dongsha (Pratas) Islands, the Paracel Islands and the Spratly Islands.38 China’s claimed sovereignty over a number of these is disputed. The Japanese Embassy in Beijing lodged a verbal protest to the Chinese Ministry of Foreign Affairs requesting, unsuccessfully, that Beijing “correct” its legislation claiming sovereignty over the Diaoyutai/Senkaku Islands. In relation to the identified features in the South China Sea, Malaysia sought formal clarification of the law and its implications while Vietnam sent secret protest notes to Beijing at both the party and government-to-government levels.39 The Philippines and Indonesia also protested the law. On a regional level, ASEAN foreign ministers indicated their concern by adopting the Declaration on the South China Sea at their 22 July 1992 Ministerial Meeting in Manila. This urged, inter alia, the resolution of all sovereignty and jurisdictional issues relating to the area by peaceful means without
37 Article 1, Law on the Territorial Sea and the Contiguous Zone of the People’s Republic of China. 38 Article 2, Law on the Territorial Sea and the Contiguous Zone of the People’s Republic of China. 39 “Testing the Waters”, Far Eastern Economic Review, 12 March 1992, pp. 8-9.
190 resort to the use of force, exercise of restraint to create a positive climate for eventual settlement of all disputes and subscription to the declaration by all parties concerned (see Chapter 7 for details). One commentator suggests the timing of China’s adoption of the Territorial Sea Law was linked to the prospective entry into force of the LOSC. Beijing’s motivation according to Alan Ortiz, Assistant Director-General of the Philippines’ National Security Council, was to introduce the law to reinforce its maritime claims before the instrument came into force. Subsequent domestic legislation introduced by the other claimants to disputed areas in the Spratlys, Paracels and Diaoyutai/Senkakus, and contested by China, could then require arbitration to settle.40
Second, Article 6 of the Territorial Sea Law differentiates between foreign merchant and military ships traversing China’s territorial sea in innocent passage. Unlike for foreign merchant ships, military vessels must obtain permission from the Chinese government before entering the country’s territorial sea. Beijing has consistently held this position. For example, in Article 3 of its 1958 Declaration on the Territorial Sea,41 during negotiation of the Third United Nations Conference on the Law of the Sea42 and in its 1996 declaration upon ratification of the LOSC.43 Despite ratifying this instrument China has yet to harmonise Article 6 of its Territorial Sea Law with Article 17 of the LOSC, which provides for the right of innocent passage of ships of all states through the territorial sea.
40 Ibid., p. 9. Unstated in the article but implied is the (untested) assumption that legislation introduced by the other claimants would post-date the entry into force of the LOSC and that parties would consent to adjudication of contested measures under the convention’s dispute settlement process. 41 This states: “No foreign vessels for military use and no foreign aircraft may enter China’s territorial sea and the air space above it without the permission of the Government of the People’s Republic of China. While navigating Chinese territorial sea, every foreign vessel must observe the relevant laws and regulations laid down by the Government of the People’s Republic of China.” Declaration published in Peking Review, 9 September 1958, p. 21. 42 Wang and Pearse, “The New Legal Regime for China’s Territorial Sea”, p. 438; Yann-Huei Song, “China and the Military Use of the Ocean”, Ocean Development and International Law 21(2), 1990, p. 215. 43 Paragraph 4 of China’s declaration states: “The People’s Republic of China reaffirms that the provisions of the United Nations Convention on the Law of the Sea concerning innocent passage through the territorial sea shall not prejudice the right of a coastal State to request, in accordance with its laws and regulations, a foreign State to obtain advance approval from or give prior notification to the coastal State for the passage of warships through the territorial sea of the coastal State.” United Nations, Division for Ocean Affairs and the Law of the Sea, Office of Legal Affairs, “China: Declaration made upon ratification”, Law of the Sea Bulletin 31, 1996, New York, p. 8.
191 China’s prior approval stipulation for military ships traversing its territorial sea has generated controversy.44 Beijing is not alone in setting such a condition, however.45 Nor is the attempt to set different transit requirements of merchant and naval ships a recent issue for the Chinese government. As early as 1972, China supported the position of Malaysia and Indonesia that the littoral states should have the power to regulate commercial and military traffic in the Straits of Malacca.46 This reflected China’s view that “the supremacy of the coastal states in defining their maritime interests to the extent of their regulatory powers should be absolute.”47 Interestingly, China’s support of these two countries occurred against a backdrop of unfriendliness in its relations with Indonesia and a coolness in ties with Malaysia.48 In taking the side of the underdeveloped coastal states against the maritime powers on the Malacca Straits issue, China not only gave substance to its enunciated position but also seized an opportunity to both contain Soviet [and American] sea power in the region and enhance its status with southeast Asian states.49
The LOSC provides for a contiguous zone up to 24 nautical miles from the coastal baseline. In conformity with the convention, Article 4 of China’s Territorial Sea Law establishes such a zone. Article 13 of its law sets out the issue areas for which Beijing has the authority to exercise power within its contiguous zone. They include customs, fiscal and sanitary laws and regulations as well as controlling entry and exit to
44 See for example Wang and Pearse, “The New Legal Regime for China’s Territorial Sea”, pp. 438-39; Zou Keyuan, “Innocent Passage for Warships: The Chinese Doctrine and Practice”, Ocean Development and International Law 29(3), 1998, pp. 195-223. A recent application by China of the Article 6 provision was the April 2001 request to three Royal Australian Navy vessels to leave Chinese territorial waters in the Taiwan Strait. J.P. Fonteyne, “China pushes the limits in tough naval stance”, Canberra Times, 7 May 2001, p. 9. 45 Both North Korea and South Korea have a similar condition while a 1985 study by the Office of the Geographer, United States Department of State concluded that 29 countries required warships to obtain permission before entering their territorial seas. Park, The Law of the Sea and Northeast Asia, pp. 32-34. 46 Harlan W. Jencks, “Counter-Encirclement or Hegemonism? PRC Security Strategy in Southeast Asia” in Joyce K. Kallgren, Noordin Sopiee and Soedjati Djiwandono (eds), ASEAN and China. An Evolving Relationship, Institute of East Asian Studies, University of California, Berkeley, 1988, pp. 80-81. Under Articles 37 and 38(2) of the LOSC innocent passage applies in straits used for international navigation, such as the Straits of Malacca. 47 Ibid. 48 Ibid., p. 80. 49 Ibid., p. 81.
192 land territories, inland waters and the territorial sea. The power to prevent or punish infringement of China’s security is also included in Article 13 of the Territorial Sea Law even though this matter is not mentioned in the relevant part of the LOSC. Concerns about vulnerability to future attack focused on China’s southern periphery and historical memory of unjust treaties forced on the country by outsiders have been suggested as factors behind its inclusion.50 No countries formally protested the reference to security in the article.51
Exclusive Economic Zone (EEZ) and Continental Shelf
The EEZ is “an area beyond and adjacent to the territorial sea subject to the specific legal regime established in this Part [Part V], under which the rights and jurisdiction of the coastal state and the rights and freedoms of other States are governed by the relevant provisions of this Convention.”52 In contrast to the position concerning the territorial sea and internal waters, a coastal state does not have sovereignty over the EEZ. Rather, it has sovereign rights, jurisdiction and duties in this zone as set out in Articles 56, 61-68 and 73 of the LOSC. Articles 58 and 63 of the convention establish the rights and duties of other states in the EEZ.53
Under Article 57 the breadth of the EEZ is limited to 200 nautical miles measured from the coastal baseline. However, the convention does not detail how the outer limit of the EEZ (or the continental shelf) is to be fixed.54 (By contrast, for the territorial sea this matter is explicitly covered in Article 4 of the convention.) During negotiations in the Third United Nations Conference on the Law of the Sea a vigorous and lengthy debate ensued on the definition of the outer limits of the continental shelf, the method for establishing it and the differentiation between the outer limits of the EEZ
50 Interview with Zhiguo Gao, Executive Director of the China Institute for Marine Affairs, State Oceanic Administration, Beijing, October 2001. 51 Ibid. 52 Article 55 of the LOSC. 53 See discussion in Brown, The International Law of the Sea, pp. 220-245. 54 Kapoor and Kerr, A Guide to Maritime Boundary Delimitation, p. 36.
193 and continental shelf.55 The consensus definition of the continental shelf that emerged was:
the sea-bed and subsoil of the submarine areas that extend beyond its territorial sea throughout the natural prolongation of its land territory to the outer edge of the continental margin, or to a distance of 200 nautical miles from the baselines from which the breadth of the territorial sea is measured where the outer edge of the continental margin does not extend up to that distance.56
Where the continental margin extends beyond 200 nautical miles the outer edge of this feature marks the outer limit of the continental shelf.57 The continental margin is defined in Article 76(3) of the LOSC as comprising “the submerged prolongation of the land mass of the coastal State, and consists of the sea-bed and subsoil of the shelf, the slope and the rise. It does not include the deep ocean floor with its oceanic ridges or the subsoil thereof.”
Where the continental margin extends beyond 200 nautical miles from the baseline from which the territorial sea is measured the outer limit of the continental shelf is determined by reference to one of two methods specified in Article 76(4) of the LOSC. Irrespective of which method is chosen, Article 76(5) requires that the fixed points comprising the line either shall not exceed 350 nautical miles from the baselines used to measure the breadth of the territorial sea or be greater than 100 nautical miles from the 2,500 metre isobath.
55 See for example Brown, The International Law of the Sea, pp. 146-48; Alex Oude Elferink, The Law of Maritime Boundary Delimitation: A Case Study of the Russian Federation, Martinus Nijhoff Publishers, Dordrecht, Boston and London, 1994, pp. 27-33; E.D. Brown, Sea-Bed Energy and Minerals: The International Legal Regime. Volume I: The Continental Shelf, Martinus Nijhoff Publishers, Dordrecht, Boston and London, 1992, pp. 18-45; S.P. Jagota, Maritime Boundary, Martinus Nijhoff Publishers, Dordrecht, Boston and Lancaster, 1985, pp. 36-42 and pp. 219-272. 56 Article 76(1) of the LOSC. 57 Brown, Sea-Bed Energy and Minerals, p. 11. In particular, Footnote 13 thereon.
194 A claim for a continental shelf outer limit beyond 200 nautical miles must be submitted to the Commission on the Limits of the Continental Shelf58 within a decade of a state ratifying the LOSC. Based on information provided by the claimant state the commission will make its determination, which is final and binding.
The delimitation of the continental shelf and the EEZ between states with opposite or adjacent coasts, as is the case in the South China Sea, was a particularly contentious issue in the Third United Nations Conference on the Law of the Sea. This reflected the entrenched positions of, on the one hand, a group of countries advocating the use of equidistance and, on the other hand, an opposing bloc favouring the concept of equitable principles.59 To resolve the impasse, the compromise formula adopted was agreement based on international law to achieve an equitable solution. The wording of Article 74(1) in the LOSC concerning the EEZ and Article 83(1) on the continental shelf reflects this compromise.
Brown asserts, however, that the compromise text is “all that a legal rule should not be - excessively vague and imprecise and drafted by reference to even more vague and controversial concepts” and “no more than an empty shell.”60 Interpretative guidance provided by developments in case law and state practice arguably fills some of the vacuum61 but it cannot compensate for fundamental, but apparently in this case necessary, imprecision in drafting.62 If no agreement is reached within a reasonable period of time the dispute settlement provisions under the convention’s Part XV and its associated annexes are invoked.
58 Established under Annex II of the LOSC. 59 Brown, The International Law of the Sea, p. 157. 60 Ibid., p, 157 and p. 160. 61 Ibid., pp. 161-208. For a detailed discussion of relevant case law and state practice see Brown, Sea-Bed Energy and Minerals, chapters 5-16. 62 Indeed as Brown notes, “It [the compromise formula of Articles 74(1) and 83(1)] was to burden the international community with a formula which is virtually meaningless in itself and very difficult to interpret even when the reference to ‘international law’ is followed up.” Ibid., p. 48.
195 On 15 May 1996 China simultaneously issued its Declaration on the Baselines of the Territorial Sea, ratified the LOSC and claimed an EEZ.63 Subsequently, on 26 June 1998 the People’s Republic of China Exclusive Economic Zone and Continental Shelf Act (hereinafter referred to as Exclusive Economic Zone and Continental Shelf Act) was adopted to give effect to the EEZ claim.64 The act follows the emerging trend of state practice in which the EEZ and continental shelf boundary coincide.65 While a single maritime boundary delimiting the two zones is helpful for equity, convenience and practical reasons,66 it is not a requirement under the LOSC.67
The act aims to safeguard China’s sovereign rights and jurisdiction over its EEZ and continental shelf and to protect its maritime rights and interests.68 Article 2 defines China’s EEZ as an area beyond and adjacent to the country’s territorial sea and extending 200 nautical miles from the coastal baselines. The same article defines the country’s continental shelf as the seabed and subsoil of the submarine areas extending from the territorial sea as the natural prolongation of land territory to the outer edge of the continental margin, or to a distance of 200 nautical miles from the coastal baselines where the outer edge of the continental margin does not extend that far. In relation to EEZ and continental shelf claims contested with states with opposite or adjacent coasts, China will settle them “on the basis of international law and in accordance with the principle of equity, by an agreement delimiting the areas so claimed.”69 This reflects China’s preference for the equitable principles option in delimiting the EEZ and
63 Dzurek, “The People’s Republic of China Straight Baseline Claim”, p. 80. 64 The full text is published in United Nations, Division for Ocean Affairs and the Law of the Sea, Office of Legal Affairs, “China: People’s Republic of China Exclusive Economic Zone and Continental Shelf Act”, Law of the Sea Bulletin 38, 1998, New York, pp. 28-31. 65 Up to 1999 all except two EEZ and continental shelf boundary delimitations coincided. The exceptions were the Australia-Papua New Guinea Maritime Boundaries Treaty, 1978 and the Australia-Indonesia Maritime Boundaries Treaty, 1997. Churchill and Lowe, The law of the sea, p. 196. 66 Kriangsak Kittichaisaree, The Law of the Sea and Maritime Boundary Delimitation in South-East Asia, Oxford University Press, Singapore, Oxford and New York, 1987, p. 75. 67 Oude Elferink, The Law of Maritime Boundary Delimitation: A Case Study of the Russian Federation, p. 33; Brown, The International Law of the Sea, p. 351. 68 Article 1, People’s Republic of China Exclusive Economic Zone and Continental Shelf Act. 69 Article 2, People’s Republic of China Exclusive Economic Zone and Continental Shelf Act. This phrasing follows China’s position in Paragraph 2 of its Declaration made upon ratification of the LOSC. See United Nations, Division for Ocean Affairs and the Law of the Sea, Office of Legal Affairs, “China: Declaration made upon ratification”, p. 8.
196 continental shelf between states with adjacent or opposite coasts.70 The term “principle of equity” contained in Article 2 of China’s Exclusive Economic Zone and Continental Shelf Act differs from the “equitable solution” phrasing of Articles 74(1) and 83(1) of the LOSC.71 While not problematic from a marine law perspective, it may present difficulties in implementation.72 Other articles in the act deal with the exploitation, conservation and management of marine resources and protection of the environment in the two zones as well as jurisdiction, authorisation and regulation of the establishment, operation and use of artificial islands, installations and structures. The Chinese government must approve marine scientific research in the two zones by any international organisation, foreign organisation or individual. Subject to observance with international law and China’s domestic legislation, freedom of navigation and overflight and laying of submarine cables and pipelines within the zones is permitted.73 Article 14 of the act states that its provisions do not affect China’s “historical rights.” Some take this term to refer to Beijing’s claim in the South China Sea; in particular, the geographic features and possibly waters within the U-shaped boundary line appearing on Chinese maps since 1947,74 or fisheries rights in the Sea. The term’s precise meaning in the act remains unclear, however.75 Under Article 15 of the act implementing regulations may be introduced in the future.
Vietnam submitted a note verbale to the United Nations on 6 August 1998 protesting the act on two counts. First, it reiterated its position that the establishment of territorial sea baselines around the Paracel Islands violates Vietnam’s sovereignty over the area and is inconsistent with international law. Second, it refused to recognise so- called “historical interests” not consistent with international law and which violate
70 Park, The Law of the Sea and Northeast Asia, p. 40. 71 Ibid., p. 41. 72 Ibid., p. 42. 73 Ibid., pp. 28-30. 74 A useful analysis of China’s U-shaped line is Zou Keyuan, “The Chinese Traditional Maritime Boundary Line in the South China Sea and its Legal Consequences for the Resolution of the Dispute over the Spratly Islands”, The International Journal of Marine and Coastal Law 14(1), 1999, pp. 27-55. 75 Song and Zou, “Maritime Legislation of Mainland China and Taiwan”, p. 318; Zou Keyuan, “Historic Rights in International Law and in China’s Practice”, Ocean Development and International Law 32(2), 2001, pp. 160-64; Zou Keyuan, “China’s exclusive economic zone and continental shelf: developments, problems, and prospects”, Marine Policy 25(1), 2001, p. 74.
197 Vietnam’s sovereignty, sovereign rights and legitimate interests in its maritime zones and continental shelf in the Eastern [South China] Sea.76 The Philippines also protested the act. Its objections related not only to infringement of Manila’s EEZ within its claimed area in the Kalayaan Island Group but also the absence of any boundary delimiting China’s exclusive economic zone. In addition, Manila considered that Article 14 of the act concerning historical rights was an attempt by China to “surreptitiously underscore” its claim in the Spratlys.77
5.2 Chinese Conceptions of Law
China’s maritime jurisdictional measures do not exist in a legislative vacuum. They form part of a broader domestic legal system that exhibits both continuity and change as China engages more deeply with the international community. In this context, it is instructive to situate the maritime measures within the on-going process of law reform in China.
Two main philosophical approaches inform Chinese conceptions of law: Confucianism and Legalism.78 In Confucianist thinking the concept of li invoked both institutions and behavioural norms of conduct to guide civilised social interactions79 and to underpin good government.80 Moral authority was stressed in state and family relationships, as were the qualities of benevolence, righteousness, propriety, wisdom and fidelity.81 In Confucius’ view:
76 United Nations, Division for Ocean Affairs and the Law of the Sea, Office of Legal Affairs, “Vietnam: Dispute regarding the Law on the Exclusive Economic Zone and Continental Shelf of the People’s Republic of China which was passed on 26 June 1998”, Law of the Sea Bulletin 38, 1998, New York, pp. 54-55. 77 “Manila to protest new Beijing initiative in territorial dispute”, BusinessWorld (Philippines), 21 September 1998. 78 See discussion in Randall Peerenboom, China’s Long March toward Rule of Law, Cambridge University Press, Cambridge, 2002, pp. 28-36; Derk Bodde and Clarence Morris, Law in Imperial China, Harvard University Press, Cambridge, 1967, pp. 17-27. 79 Ibid., p. 19; Potter, The Chinese Legal System. Globalization and local legal culture, p. 8. 80 Orts, “The Rule of Law in China”, p. 52. 81 Ronald C. Keith, China’s Struggle for the Rule of Law, The Macmillan Press Ltd and St. Martin’s Press, Basingstoke, London and New York, 1994, p. 43.
198 Lead the people by regulations, keep them in order by punishments, and they will flee from you and lose all self-respect. But lead them by virtue and keep them in order by established morality, and they will keep their self-respect and come to you.82
Under li inequality in social interactions was a given, such that:
[t]he dominance of social hierarchy was incorporated into legal norms that permitted law to be applied subjectively based on social standing. … Social and economic relations in traditional China were enforced largely through reliance on informal norms that were consistent with regime norms about hierarchy yet were wholly separate from the regime’s public law system.83
Brugger and Reglar underscore this by suggesting that “[i]n practical terms, li specified the ‘natural’ behaviour appropriate to a role in the network of social relationships which constituted the community. Those who embodied li possessed a moral force superior to any physical force.”84 Confucianists recognised, however, that li was insufficient by itself to regulate societal activities and that state-sanctioned punishments were a necessary supplement, albeit in a subordinate role.85
Associated with the concept of fa (law), or a “model or standard imposed by superior authority, to which the people must conform”,86 the legalist approach takes the view that people act principally out of self-interest, requiring standards and sanctions to maintain public order.87 Legalism refers to “the rules for behavior laid down by the sovereign emperor, and violations often resulted in criminal liability, very often the death penalty.”88 In Keith’s view, legalism “sought the state’s autonomy from society, gave law a central place in the political life, and challenged the superiority of ethics in
82 The Analects, Book II, translated and cited in Bodde and Morris, Law in Imperial China, pp. 21-22. 83 Potter, The Chinese Legal System. Globalization and local legal culture, p. 9. 84 Bill Brugger and Stephen Reglar, Politics, Economy and Society in Contemporary China, The Macmillan Press Ltd, Basingstoke and London, 1994, p. 177. 85 Ibid., p. 178; Orts, “The Rule of Law in China”, p. 52. 86Bodde and Morris, Law in Imperial China, p. 11. 87 Ibid., p. 23; Jianfu Chen, Chinese Law. Towards an Understanding of Chinese Law, Its Nature and Development, Kluwer Law International, The Hague, 1999, p. 10. 88 Orts, “The Rule of Law in China”, p. 53.
199 Confucian teaching.”89 Under legalism, law in China serves an instrumentalist function to uphold state power.90 Potter argues, for example, that China’s laws and regulations are means to support the regime’s policy goals rather than being instruments of general applicability.91 In this way, “[l]aw is not a limit on state power; rather, it is a mechanism by which state power is exercised, as the legal forms and institutions that comprise the Chinese legal system are established and operate to protect the Party/state’s political power.”92 Accordingly, “[l]egislation is seen as proceeding necessarily from assessments about national conditions, which remain subject to determination and assessment by the Party state.”93
In imperial China the concepts of li and fa co-existed.94 Beginning in the Han Dynasty (206 B.C.–A.D. 220) Confucianism began to supplant Legalism,95 leading to a Confucianisation of law characterised by “an incorporation into the law codes of the social values originally contained in the Confucian li.”96 This co-existence has endured to influence contemporary Chinese legal theory.97 Beginning in the late 1970s Deng Xiaoping reinstated the role of law and instigated reform of the legal system to support China’s economic modernisation.98 The Communiqué from the Third Plenary Session of the Eleventh Central Committee of the Chinese Communist Party in 1978 gave impetus
89 Keith, China’s Struggle for the Rule of Law, p. 44. 90 Wm. Theodore De Bary, Asian Values and Human Rights: A Confucian Communitarian Perspective, 1998, p. 93 cited in Orts, “The Rule of Law in China”, p. 53. 91 Potter, The Chinese Legal System. Globalization and local legal culture, p. 10 and p. 20. 92 Ibid., p. 10. 93 Ibid., p. 20. 94 Orts, “The Rule of Law in China”, p. 52 and p. 55. Ronald Keith also stresses this point in noting “Chinese political culture over the centuries attempted a formal synthesis of Legalist and Confucian philosophical assumptions within imperial bureaucratic organisation.” Jianfu Chen identifies the philosopher Dong Zhongshu (179 B.C. – 104 B.C.) as key in elucidating the theoretical basis for “the harmonisation between Confucianism and Legalism.” See Keith, China’s Struggle for the Rule of Law, p. 53; Chen, Chinese Law. Towards an Understanding of Chinese Law, Its Nature and Development, p. 13. 95 Bodde and Morris, Law in Imperial China, pp. 27-29. 96 Ibid., p. 50 97 Orts, “The Rule of Law in China”, p. 56. 98 Ibid., pp. 57-59, pp. 61-63 and p. 69; Edward J. Epstein, “Law and Legitimation in Post-Mao China” in Pitman B. Potter (ed.), Domestic Law Reforms in Post-Mao China, M.E. Sharpe, Armonk and London, 1994, p. 36. See also Pitman B. Potter, “Riding the Tiger: Legitimacy and Legal Culture in Post-Mao China”, The China Quarterly 138, 1994, pp. 325-58 for an exploration of the political implications of reform of China’s legal system.
200 to this legal-economic linkage. Reflecting Deng’s lead, speaking in a February 1996 meeting held at the Chinese Academy of Social Science President Jiang Zemin highlighted the principle of rule of law.99 Its official endorsement included its identification as a goal in the Ninth Five-Year Plan (1996-2000) and the Long-Term Targets through the Year 2010, adopted by the Fourth Session of the Eighth National People’s Congress (NPC) in March 1996. In addition, Jiang highlighted the development of a rule-of-law state (fazhi guojia) in his address to the Fifteenth Party Congress in 1997. Then on 15 March 1999 the Second Session of the Ninth NPC adopted an amendment to Article 5 of China’s Constitution endorsing the principles of both rule of law and the development of a socialist rule-of-law state,100 hailed as a “milestone event” in advancing the country’s social and economic development.101
The potential for “a new Communist Party Legalism” remains a concern, however.102 Distinguishing between the instrumentalist approach of “rule by law” and principles of impartiality under the “rule of law”,103 Orts suggests that the Chinese government in practice appears to be favouring the former.104 Both Tanner105 and Potter106 concur, the latter noting that while post-Mao legal reform promoted a shift from the “rule of man” (renzhi) to the “rule of law” (fazhi)107 this has not diminished law
99 Albert H.Y. Chen, “Toward a Legal Enlightenment: Discussions in Contemporary China on the Rule of Law”, UCLA Pacific Basin Law Journal 17(2-3), 1999-2000, p. 127. This is an excellent article surveying the perspectives of Chinese legal scholars on the meaning of the rule of law. 100 Ibid., pp. 127-28; “Amendments to the Constitution of the People’s Republic of China”, Beijing Review, 3-9 May 1999, p. 14. Note that the 1982 constitution endorsed government of laws, the pre- eminence of the law and equality of all before the law: Peerenboom, China's Long March toward Rule of Law, p. 57. 101 “NPC Adopts Amendments”, Beijing Review, 29 March-4 April 1999, p. 5. 102 Orts, “The Rule of Law in China”, pp. 69-70. See also Richard Baum, “Modernization and Legal Reform in Post-Mao China: The Rebirth of Socialist Legality”, Studies in Comparative Communism XIX(2), 1986, pp. 69-103. 103 Orts, “The Rule of Law in China”, p. 93-101. 104 Ibid., p. 106. 105 Murray Scot Tanner, “The Erosion of Communist Party Control over Lawmaking in China”, The China Quarterly 138, 1994, p. 393. 106 Potter, The Chinese Legal System. Globalization and local legal culture, p. 11. See also Pitman B. Potter, “The Chinese Legal System: Continuing Commitment to the Primacy of State Power”, The China Quarterly 159, 1999, p. 673, p. 678 and p. 683. 107 Translation of the term fazhi is problematic: it can mean either rule of law or rule by law or the legal system. See for example, Brugger and Reglar, Politics, Economy and Society in Contemporary China, pp. 176-83.
201 being used to serve the party’s political interests. In this regard, Potter suggests, “the rule of law in China still remains a distant prospect indeed.”108 A number of other scholars join with this view.109 Law in China today, then, is characterised by a mix of traditional Chinese and modern western legal concepts as well as party political imperatives.110
China’s lawmaking system involves three principal organs and comprises five stages. The organs are the central Party, the National People’s Congress (NPC) and the State Council.111 Each is involved in the different stages of the lawmaking process. These stages are: initial agenda setting by leaders, ministries, think-tanks and entrepreneurs to gain State Council or NPC Standing Committee approval to establish a drafting group; inter-agency review and consensus building within the framework of the State Council; top leadership approval in-principle of a draft law; its transmittal for review and adoption by the National People’s Congress; and finally, implementation overseen by the State Council.112
In relation to this study’s focus, three factors seem to underlie China’s renewed embrace of law after the chaos of the Cultural Revolution.113 The first is the priority of the post-Mao leadership on economic development, and the concomitant need for a stable, predictable domestic legal framework to support foreign trade and investment
108 Potter, “The Chinese Legal System: Continuing Commitment to the Primacy of State Power”, p. 683. 109 Keith, China’s Struggle for the Rule of Law, p. 5; Chen, “Toward a Legal Enlightenment”, p. 155 and p. 158; Zou Keyuan, “Towards Rule of Law in China: Experiences in the Last Two Decades”, China Report 36(4), 2000, p. 509. 110 Potter, The Chinese Legal System. Globalization and local legal culture, pp. 6-7, p. 11; Orts, “The Rule of Law in China”, pp. 71-72. 111 Ibid., p. 383. 112 Each stage is discussed in detail in Murray Scot Tanner, “How a Bill Becomes a Law in China: Stages and Processes in Lawmaking”, The China Quarterly 141, 1995, pp. 44-63. Table 2 on pp. 62-63 of Tanner’s article summarises the process. 113 From a general perspective, Shipeng Zheng identifies four motivations for the priority placed on legal reform: revulsion against the Cultural Revolution, the need for new sources of legitimacy, maintenance of public order and stability and securing economic development. Shipeng Zheng, Party vs. State in Post- 1949 China. The Institutional Dilemma, Cambridge University Press, Cambridge, 1997, pp. 162-66.
202 flows and to manage internal restructuring of the economy.114 China’s 11 December 2001 entry into the World Trade Organisation (WTO) affirmed its commitment to abide by the rules-based disciplines governing international trade.115
In support of the country’s economic development goal, China recognises the role of shipping in facilitating cost-effective transport of its exports and imports. It supports “a unified, equal and transparent” international maritime legal system to promote fair competition among carriers.116 The stakes are high. China ranks among the top eight shipping countries in the world.117 The China Ocean Shipping (Group) Company (COSCO) is now the world’s third largest shipping company.118 In 1999, ships in its container affiliate, COSCO Container Lines (COSCON), plyed 50 routes serving 1200 ports in 170 countries;119 in 2000 COSCON owned the world’s seventh largest container shipping fleet.120 More broadly, more than 90 per cent of China’s foreign trade
114 See for example, Peerenboom, China’s Long March toward Rule of Law, chapter 10; Potter, The Chinese Legal System. Globalization and local legal culture, p. 4 discussing how China borrowed elements from overseas legal regimes in establishing its own laws regulating financial activities. Also Zheng Yongnian, “The Rule by Law vs the Rule of Law” in Wang Gungwu and Zheng Yongnian (eds), Reform, Legitimacy and Dilemmas. China's Politics and Society, Singapore University Press and World Scientific Publishing Co. Pte. Ltd, Singapore, 2000, pp. 147-51; Stanley B. Lubman, Bird in a Cage. Legal Reform in China After Mao, Stanford University Press, Stanford, 1999, chapter 5. 115 For analysis of the implications for China on joining the WTO see for example articles under the theme “China and the World Trade Organization: Winners or Losers?” in Journal of Contemporary China 32(11), 2002, pp. 397-494 and Journal of Contemporary China 33(11), 2002, pp. 673-734. 116 Wan Exiang, Justice and Vice-President of Supreme People’s Court of the People’s Republic of China, Speech at the Opening Ceremony of the Fifth International Maritime Conference, Shanghai, 11 October 2002, <
203 is seaborne.121 In 1997, China’s merchant fleet numbered 320,000 ships, with a total deadweight tonnage of about 50 million tons. Of this tonnage, ships accounting for more than 23 million deadweight tons were involved in foreign trade transport.122 An ageing fleet poses a challenge. At 17.6 years, the average age of Chinese merchant ships is higher than the world average of approximately 14 years;123 Chinese mixed cargo vessels are even older at 19.9 years.124 As a result, issues of safety, pollutant emissions and economic competitiveness arise.125
The second factor is that establishment of a maritime jurisdictional regime provides a legal pillar in support of the government’s strategic goals for development of the marine economy. These goals are set out in several documents. The Ninth Five Year Plan for National Economic and Social Development (1996-2000) and the Long-term Targets through the Year 2010 adopted in March 1996 urged greater investigation of marine resources, increased development of associated industries and stronger protection of the oceanic environment.126 China’s Ocean Agenda 21, published in 1996, identified the marine sector as a new pole of economic growth in the twenty-first century. By 2010, the contribution of the marine sector to national GDP is to reach 10 percent.127 As a comparison, in 1997 the marine sector contributed 300 billion yuan (approximately US$37.5 billion) to the national economy.128 This represented 4.2 per cent of China’s GDP that year of US$898.2 billion.129 The document set out a strategy for sustainable
121 Vijay Sakhuja, “Maritime Power of People’s Republic of China: The Economic Dimension”, Strategic Analysis XXIV(11), 2001, p. 2024. 122 Information Office of the State Council of the People’s Republic of China, “The Development of China’s Marine Programs”, 1998. Reprinted in Beijing Review, 15-21 June 1998, pp. 13-23. Figures sourced from Beijing Review text, p. 16. 123 Figure for Chinese ships from Sakhuja, “Maritime Power of People’s Republic of China”, p. 2025. Figure for world average from United Nations Conference on Trade and Development, Review of Maritime Transport, 2001, p. i. 124 Sakhuja, “Maritime Power of People’s Republic of China”, p. 2025. 125 Ibid. 126 Li Ranjun, “China’s ‘Blue Industry’ Sets Sail”, Beijing Review, 23-29 March 1998, p. 22. 127 Li Rongxia, “Marine Economy: New Economic Growth Point”, Beijing Review, 30 November-6 December 1998, p. 13. 128 Ibid., p. 15. The exchange rate at the time was approximately 8:1. 129 1997 GDP figure for China sourced from World Bank “Data and Statistics” on-line database under country menu choice “China”, <
204 marine resource development, based on safeguarding the country’s marine rights and interests, promoting rational and sustainable development and use of marine resources, protecting the marine environment and developing a co-ordinated approach to activities in the marine environment field.130 Elaborating on this, the State Council’s May 1998 White Paper The Development of China’s Marine Programs identifies exploitation and protection of the ocean as a long-term strategic task for national development.131 Priority activities include strengthening sustainable marine development, promoting the rational use of marine resources and the co-ordinated development of related infrastructure, balancing marine resource exploitation and protection, improving marine science, technology and education, implementing a comprehensive marine management system and participating actively in international marine affairs.132 In practical terms, coastal provinces such as Hainan have begun to place greater emphasis on developing their marine resources in an effort to boost economic growth.133
In 1995, Jiang Zemin identified five priority issues for his stewardship as leader: strengthening patriotism, fighting corruption, promoting party rejuvenation, encouraging social development and defining the state’s new role in the economy.134 The patriotism theme provides a second reason for the renewed reference to law in China. By linking its commitments under the LOSC to a domestic legal regime covering its marine space the government was able to not only show its support for international law but also to use it to uphold China’s maritime territorial integrity and to protect its oceanic resources. A domestic benefit of this was reinforcement of the government’s nationalist credentials and, through this, the regime’s political legitimacy.
130 Information Office of the State Council of the People’s Republic of China, “The Development of China’s Marine Programs”, p. 14. 131 Ibid., p. 13. 132 Ibid., pp. 13-23. 133 See for example, Daojiong Zha, “Localizing the South China Sea problem: the case of China’s Hainan”, The Pacific Review 14(4), 2001, pp. 588-92; “Hainan’s Tenth Five-Year Plan to Create Strategy to Tackle Marine Resources”, Xinhua, 28 September 2000; “PRC Economist Sees Hope for Hainan’s Economic Development”, Xinhua, 31 August 2000. 134 Bruce Gilley, Tiger on the Brink. Jiang Zemin and China’s New Elite, University of California Press, Berkeley, 1998, p. 240.
205 A third factor is the greater influence of legal scholars and policy advisers, a number of whom have returned to China after training and working overseas. As Christopher Joyner notes, “individuals can have salient impacts upon the place of law in foreign policy considerations depending upon their world views, their official positions, and their perceptions of the national interest and how best to enhance it.”135 In the marine field an example is Professor Zhiguo Gao, Executive Director of the China Institute for Marine Affairs located within the State Oceanic Administration (SOA). Gao obtained his Doctor in the Science of Law (JSD) degree at Dalhousie University in Canada before taking up positions at the East-West Centre in Hawaii and, in 1994, the University of Dundee’s Centre for Petroleum and Mineral Law and Policy. Following this, he returned to China to take up his SOA position. Gao’s understanding of marine law is extensive and in recognition of his expertise and potential he has been accelerated into a senior position in the bureaucracy.
This success story masks a wider problem. The number of academically qualified lawyers in China is not large: estimates in the year 2000 suggested there were only 150,000 of them.136 Only a small number will have training in the law of the sea. Chinese experts trained or working overseas who have decided to return augment this but overall the number of specialists is likely to be small. Compounding the problem is a hollow middle layer of legal expertise.137 They would have been the law students during the decade of the Cultural Revolution (1966-1976) and their absence results in not only a skewed distribution but also a lack of mentors to the following generation and a gap in institutional memory. “Potential professors who would now have been in their mid-forties or fifties are simply absent. There are only a younger generation of professors and a much older generation.”138 This observation applies also to legal policy
135 Christopher C. Joyner, “International Law and the Conduct of Foreign Policy” in Shirley V. Scott and Anthony Bergin (eds), International Law and Australian Security, Australian Defence Studies Centre, Australian Defence Force Academy, Canberra, 1997, p. 15. 136 Charlene Barshefsky, “Trade Policy and the Rule of Law”, Minnesota Journal of Global Trade 9, 2000, p. 366; and Stanley Lubman, “Bird in a Cage. Chinese Law Reform After Twenty Years”, 20 Northwestern Journal of International Law and Business 383, 2000, p. 387. Both cited in Orts, “The Rule of Law in China”, p. 64. 137 Ibid., pp. 61-62. See especially Footnote 122 thereon. 138 Ibid.
206 advisors in government. For example, many of China’s legal experts who participated in the negotiation of the LOSC beginning in 1973, such as Chen Degong of the SOA, have retired and a heavy load now falls on a cohort of younger scholars and bureaucrats.
5.3 Identifying the Decision Unit
Paramount leader Deng Xiaoping’s views on the South China Sea dispute were apparently already clear in the mid-1980s. At the second informal Workshop on Managing Potential Conflicts in the South China Sea, held in Bandung, Indonesia, in July 1991 the head of the Chinese team, Wang Yinfan, Director of the Asia Department of the Ministry of Foreign Affairs, informed the meeting that since the second half of the 1980s China had supported the idea of shelving the sovereignty issue and engaging in joint development of the Spratlys.139 Reportedly, this position derives from a decision taken in June 1986 by Deng.140 Downplaying the dispute can also be placed within Deng’s broader political agenda. First, the priority on national economic development requires internal stability and a peaceful international environment.141 Second, Deng’s admonishment following the 1989 Tiananmen Square crackdown that China should “fear no one, antagonize no one, avoid excessively provocative statements or actions, assume a low profile and don’t take the lead.”142
Succession politics characterised the early to mid-1990s as Deng faded from the political scene and Jiang Zemin sought to consolidate his position as the core of the third generation leadership. In 1992 when the Territorial Sea Law was enacted Jiang’s
139 Lee Lai To, China and the South China Sea Dialogues, Praeger, Westport, 1999, p. 61. 140 Ibid. 141 See for example, Deng Xiaoping, “The International Situation and Economic Problems”, 3 March 1990, The Collected Works of Deng Xiaoping, Volume III, <
207 influence within the Party and government had deepened, although his support within the military remained uncertain.143 By 1993 he held simultaneously the three senior- most posts in the country: Party General Secretary, head of the Central Military Commission and state president.144 By 1994 the formal transition to the post-Deng era was completed.145 Jiang’s leadership credentials vis-à-vis rivals such as Li Peng and Qiao Shi were in flux, however, most notably in the context of the 1995-96 Taiwan Straits crisis.146 By the time of Deng’s death in 1997 Jiang had asserted his command as leader.147 Continuing the economic liberalisation policies of his predecessor, Jiang stressed the importance to China of a stable and peaceful external environment.148 On the South China Sea dispute, speaking on a visit to Thailand in 1999 he remarked:
China is ready to have in-depth discussions with relevant Asean countries on the principles and ways of safeguarding peace and stability in this region, as well as in the South China Sea. Existing differences between China and its Asean neighbours should be settled through friendly consultation and negotiation.149
Little evidence suggests that either Deng or Jiang as predominant leader is the decision unit behind the introduction of China’s maritime jurisdictional regime. For both, marine legal measures relating to the Spratlys were unlikely to occupy the same rank as the economy. While in 1992 Jiang may have had reason to support the enactment of the Territorial Sea Law to demonstrate his leadership credentials and bolster his standing with the military, this justification dissipated following the 1995-1996 Taiwan Straits crisis.150 By the Fifteenth Party Congress in September 1997 Jiang’s authority
143 Gilley, Tiger on the Brink, p. 193. 144 Ibid., p. 198. 145 Ibid., pp. 227-29. 146 See for example, Jianhai Bi, “The Role of the Military in the PRC Taiwan Policymaking: a case study of the Taiwan Strait crisis of 1995-1996”, Journal of Contemporary China 11(32), 2002, pp. 539-572. 147 Gilley, Tiger on the Brink, p. 295. 148 See for example, Edward Tang, “China to reassure Asian neighbours”, The Straits Times, 3 September 1999. 149 Edward Tang, “China ready to discuss regional rows”, The Straits Times, 4 September 1999. 150 In Bruce Gilley’s view, the crisis enabled Jiang to “stand with his troops in a warlike situation with little fear of exciting a revolt in the ranks. Their loyalty was now assured.” Elsewhere Gilley observes that Jiang was more a follower than leader of the army in the stand-off with Taiwan. Gilley, Tiger on the Brink, p. 254 and p. 258.
208 over the Party and the direction of economic reform was clear.151 In 1998, Jiang’s (and Premier Zhu Rongji’s) attention was focused on stimulating the domestic economy and promoting economic security in the wake of the regional financial crisis.152 The motivation for Jiang to champion the Exclusive Economic Zone and Continental Shelf Act in 1998 is far from evident. More generally, China’s leaders rarely involve themselves in lawmaking.153 When they do intervene it is intermittent and usually under the guidance of advisors.154
The continued legitimacy of the regime depends on growing the economy and ensuring wide distribution of the resulting benefits. While the Politburo and its Standing Committee formally hold decision-making power to commit or withhold regime resources, Tanner argues that in the lawmaking domain it is misleading to suggest a hierarchical structure exists.155 “As a draft law works its way through the system, the primary location for political battles over it shifts among the Party Centre, the State Council (and its ministries) and the NPC.”156 A more accurate descriptor of China’s lawmaking system in his view is a “multi-arena system”.157
Tanner’s notion of a multi-arena system provides a point of reference in considering whether the decision unit is a single group or multiple autonomous actors. The focus is on actors involved in the formal channel of decision-making, an important qualification. While informal politics continues to exert an influence on decision-
151 Joseph Fewsmith, “China in 1998. Tacking to Stay the Course”, Asian Survey XXXIX(1), 1999, pp. 99- 100. See also Joseph Fewsmith, “Jiang Zemin Takes Command”, Current History 97(620), 1998, pp. 250- 56. 152 Fewsmith, “China in 1998. Tacking to Stay the Course”, pp. 103-07. 153 Tanner, “How a Bill Becomes a Law in China”, p. 45 and p. 48. 154 Carol Lee Hamrin, “The Party Leadership” in Kenneth G. Lieberthal and David M. Lampton (eds), Bureaucracy, Politics, and Decision Making in Post-Mao China, University of California Press, Berkeley, 1992, pp. 95-124; and Nina P. Halpern, “Information flows and policy coordination in the Chinese bureaucracy” in Kenneth G. Lieberthal and David M. Lampton (eds), Bureaucracy, Politics, and Decision Making in Post-Mao China, University of California Press, Berkeley, 1992, pp. 125-50. Both cited in Tanner, “How a Bill Becomes a Law in China”, p. 45. 155 Tanner, “The Erosion of Communist Party Control over Lawmaking in China”, p. 383. 156 Ibid., p. 384. 157 Ibid., pp. 383-84.
209 making in China,158 assailing its power is the twin effects of age thinning the ranks of senior Party elders and the rise of technocrats in the political elite. This latter trend, which began in the 1980s,159 deepened during Jiang Zemin’s presidency as political leadership passed “from a generation of revolutionary politicians to a generation of technocrat politicians.”160 For example, eighteen of the twenty-four new Politburo members announced at the 1997 Fifteenth Party Congress were university trained.161 All members of the peak Politburo Standing Committee had degrees, with disciplinary backgrounds spanning engineering, architecture and business.162 The Politburo Standing Committee appointments announced at the Sixteenth Party Congress in November 2002 further entrenched the shift towards technocrats.163
An implication of this shift is an increased emphasis on the formal channel of decision-making and the rise of the bureaucracy as an actor in this process. In the foreign policy domain:
As the Long March generation passes from the scene, the new generation of political leaders lacks both authority and charisma to dominate foreign policy decisionmaking. Foreign affairs bureaucracies have become increasingly influential. At the same time, in the process of decentralization and opening to the outside world, new actors like the defense industry, the People’s Liberation Army (PLA), and provincial authorities, which had previously played little role in foreign policy decisionmaking, have now gained a stronger voice in foreign affairs.”164
158 See for example, articles by Lowell Dittmer, Lucien Pye, Frederick Teiwes, Tang Tsou, Andrew Nathan and Kellee Tsai in Jonathan Unger (ed.), The Nature of Chinese Politics. From Mao to Jiang, M.E. Sharpe, Armonk, 2002, pp. 3-190. 159 A. Doak Barnett, “Political Overview” in Shao-chuan Leng (ed.), Reform and Development in Deng’s China, University Press of America, Lanham, 1994, p. 9. 160 Lu Ning, The Dynamics of Foreign-Policy Decisionmaking in China, Westview Press, Boulder and Oxford, 1997, p. 162. 161 David Shambaugh, “The CCP’s Fifteenth Congress: Technocrats in Command”, Issues and Studies 34(1), 1998, p. 9. See also Cheng Li and Lynn White, “The Fifteenth Central Committee of the Chinese Communist Party: Full-Fledged Technocratic Leadership with Partial Control by Jiang Zemin”, Asian Survey 38(3), 1998, pp. 231-64. 162 Zheng Yongnian, “The Politics of Power Succession” in Wang Gungwu and Zheng Yongnian (eds), Reform, Legitimacy and Dilemmas. China’s Politics and Society, Singapore University Press and World Scientific Publishing Co. Pte. Ltd, Singapore, 2000, p. 38. In particular, see Table 2 thereon. 163 All nine members trained as engineers. See “Who’s in charge now?”, Economist, 23 November 2002, p. 28. 164 Lu, The Dynamics of Foreign-Policy Decisionmaking in China, p. 3.
210 For foreign and defence issues perceived to be critical for the regime’s or society’s well-being the power and authority to commit or withhold state resources rests with the central leadership organs. Formally, the Politburo is the key political institution in decision-making, including foreign policy-making.165 As Barnett notes, however, there is little evidence that it has made many major foreign policy decisions.166 In practice, the locus of foreign policy decision-making power rests with the Politburo’s Standing Committee.167 Members of this committee are the Chairman of the Chinese Communist Party, the Chairman of the Central Military Commission, the State President, the Chairman of the Standing Committee of the National People’s Congress and the Chairman of the Chinese People’s Consultative Conference.168 Within the group, individual members’ influence on decision-making varies.169 The National People’s Congress has no foreign policy-making power.170 In a similar vein, the State Council’s role in foreign policy decision-making is minor,171 although individual agencies under it such as the Ministry of Foreign Affairs contribute substantially to the process.
The principal Party organs involved in lawmaking are the Politburo, its Standing Committee and the subordinate leading small groups.172 The Party’s Central Secretariat also has a role in undertaking policy planning work, as do a number of departments controlled by the secretariat.173
165 Ibid., p. 9. 166 A. Doak Barnett, The Making of Foreign Policy in China. Structure and Process, Westview Press Inc., Boulder, 1985, pp. 19-20. 167 Michael D. Swaine, The Role of the Chinese Military in National Security Policymaking, Revised Edition, RAND, Santa Monica, 1998, p. 22. Exceptions are decisions on war and peace, which require full Politburo deliberation: Lu, The Dynamics of Foreign-Policy Decisionmaking in China, p. 107. 168 Ibid., p. 9. 169 Swaine, The Role of the Chinese Military in National Security Policymaking, p. 22. 170 George Yang, “Mechanisms of Foreign Policy-Making and Implementation in the Ministry of Foreign Affairs” in Carol Lee Hamrin and Suisheng Zhao (eds), Decision-Making in Deng’s China. Perspectives from Insiders, M.E. Sharpe, Armonk and London, 1995, p. 91. 171 Interview with Chu Shulong, Professor, Department of International Relations, Tsinghua University, Beijing, October 2001. 172 Tanner, “The Erosion of Communist Party Control over Lawmaking in China”, p. 388. 173 Ibid.
211 Some scholars suggest that since 1978 central Party control over lawmaking has been diluted in favour of the NPC and the Supreme People’s Court.174 At the same time, the instrumentalist aspect of law in China means that although the NPC is responsible for enacting legislation, in practice it is constrained by the requirement that this serve the goals of the Party rather than being independent of political imperatives.175 As a result, no one policy group dominates lawmaking.
In theory, the Politburo, Party Central Secretariat and senior leaders pre-approve draft laws before sending them to the NPC for adoption.176 However, meetings on draft legislation held by the two former organs focus on contextual rather than substantive issues.177 Indeed, because of opposition within the leadership or leaders’ preoccupation with other issues or lack of expertise in understanding the draft law, “the top Party leadership in practice often abdicates much of its power to control the content of legislation.”178 This has reinforced decentralisation of party oversight of the lawmaking process, with draft laws sent to the Party’s Central Secretariat office or the particular body responsible for the issue area.179 As noted earlier, in the realm of foreign policy the dominant central level body is the Politburo Standing Committee.
The NPC is the highest organ of state power in China, meeting in plenary session once a year. Acting as the country’s parliament, it is responsible for adopting basic laws,180 approving amendments to the constitution and examining decisions by its Standing Committee and the State Council.181 Since the 1980s the NPC has partially shed its image as a “rubber-stamp” body, emerging as a meaningful actor in elite
174 See for example, Tanner, “The Erosion of Communist Party Control over Lawmaking in China”, p. 381. On the other hand, Zheng Yongnian cites several works that argue for continued Party pre- eminence in lawmaking. Zheng, “The Rule by Law vs the Rule of Law”, pp. 157-58. 175 Potter, The Chinese Legal System. Globalization and local legal culture, p. 20. 176 Tanner, “The Erosion of Communist Party Control over Lawmaking in China”, p. 396. 177 Ibid. 178 Ibid. 179 Ibid., p. 395. 180 These include, but are not limited to, civil law, criminal law and laws relating to state organisations. Basic law is distinguished from ordinary law, but the criteria for this remain unclear. See Michael W. Dowdle, “The Constitutional Development and Operations of the National People’s Congress”, Columbia Journal of Asian Law 11(1), 1997, pp. 30-32. 181 Potter, The Chinese Legal System. Globalization and local legal culture, p. 16.
212 politics.182 When the NPC is not in session, its Standing Committee assures the continued implementation of constitutional and legislative responsibilities as well as overseeing the work of ten support services and nine special standing committees.183 Under the 1982 constitution the standing committee’s lawmaking power has expanded while that of the NPC’s plenary session has contracted.184 In rank, the NPC’s Standing Committee is above that of a ministry under the State Council,185 such as the Ministry of Foreign Affairs. A Chairman’s Group heads the NPC Standing Committee, with responsibility for setting and supervising the agenda of that body and the NPC plenary session.186 Its members are the chair of the standing committee, several vice-chairs and the general secretary. As the ‘gatekeeper’ of all draft legislative proposals, the chairman’s group has a major role in deciding if and when a bill will be considered by the standing committee or the full NPC.187
The State Council is the principal organ of state administration, acting as the Cabinet in the political system.188 Its membership includes the Premier, Vice-Premiers, State Councillors, Ministers in charge of ministries and commissions, the Auditor- General and the Secretary-General.189 The council and its associated organs are responsible for the majority of legal drafting. In addition, the council promulgates most national laws and regulations.190 The Legislation Bureau under the State Council Standing Committee is a key organ. It is responsible for preparing annual and long-range
182 Ibid., pp. 17-19. 183 Dowdle, “The Constitutional Development and Operations of the National People’s Congress”, p. 25 and pp. 40-52. Of the support services, the most important are the General Office Research Department and the Commission for Legislative Affairs. The former focuses on improving the NPC’s structure and procedures as well as ensuring coherence of the body of statutes. The latter is responsible for law drafting. The nine special standing committees cover foreign affairs; law; economics and finance; internal and judicial affairs; environmental protection; agriculture; national minorities; overseas Chinese; and education, science, culture and health. 184 Murray Scot Tanner, “Organizations and Politics in China’s Post-Mao Law-Making System” in Pitman B. Potter (ed.), Domestic Law Reforms in Post-Mao China, M.E. Sharpe, Armonk, 1994, pp. 58-59. 185 Ibid., p. 77. 186 Ibid., p. 26. 187 Ibid., p. 27. 188 Kenneth Lieberthal, Governing China. From Revolution Through Reform, W.W. Norton and Co., New York and London, 1995, p. 162 and p. 372. 189 Ibid. 190 Tanner, “Organizations and Politics in China’s Post-Mao Law-Making System”, p. 65.
213 legislative plans, resolving inter-ministry impasse and developing regulations to implement laws adopted by the NPC and State Council.191 As such, it combines a facilitation, co-ordination and substantive drafting role. While the policy content of most laws is determined in the State Council rather than the party or the NPC, 192 this is not fixed. Indeed, the influence of the NPC Standing Committee leadership and its permanent bureaucracy in shaping the content of laws has grown over time.193
No clear directions exist specifying who among the NPC, the NPC Standing Committee and the State Council is responsible for which legislation.194 The resulting confusion and bureaucratic battles have assumed greater significance as the influence of the Party centre in lawmaking has diminished and differences in internal procedures among the three bodies deepened.195
None of the actors at the core of decision-making on legislative measures relating to the Spratlys combine into a single decision unit. Nor can each by itself commit or withhold regime resources in dealing with legislative issues with a foreign policy dimension. According to the schema developed by Hermann and Hermann, reproduced as Figure 1 in Chapter 2, these characteristics suggest the decision unit is multiple autonomous actors.196 Its constituents, I contend, comprise the Politburo Standing Committee and the NPC Standing Committee. This is elaborated on below.
The Politburo Standing Committee stands at the apex of the formal foreign policy decision-making system.197 It includes the Chairman of the Chinese Communist Party, the Chairman of the Central Military Commission, the State President, the Chairman of the Standing Committee of the National People’s Congress and the
191 Ibid., p. 66 and p. 68. 192 Ibid., p. 58. 193 Ibid. 194 Ibid., pp. 59-60. 195 Ibid., p. 60; Peerenboom, China’s Long March toward Rule of Law, p. 190. 196 Margaret G. Hermann and Charles F. Hermann, “Who Makes Foreign Policy Decisions and How: An Empirical Inquiry”, International Studies Quarterly 33(4), 1989, p. 370. 197 Swaine, The Role of the Chinese Military in National Security Policymaking, p. 22.
214 Chairman of the Chinese People’s Consultative Conference.198 In ascending order, a reporting chain stretches from the Ministry of Foreign Affairs to the head of the Chinese Communist Party Central Committee’s Foreign Affairs Leading Small Group and then to the Politburo Standing Committee.199 In 1998 a break with the past occurred when Jiang Zemin became head of the Foreign Affairs Leading Small Group,200 succeeding Li Peng. While the head of the Foreign Affairs Leading Small Group is usually also a member of the Politburo Standing Committee,201 never before had a paramount leader taken over leadership of the group.202 The military has been unrepresented in the Politburo Standing Committee since 1997. However, its input into foreign policy deliberations during the 1990s occurred through membership of the Foreign Affairs Leading Small Group and at the Politburo level through contacts with Li Peng, Jiang Zemin and two senior military representatives on that body, Zhang Wannian and Chi Haotian.203
In its role of ensuring the NPC’s responsibilities continue to be undertaken when that body is not in plenary session, the NPC Standing Committee adopted all of China’s maritime jurisdiction measures during the 1990s. On 25 February 1992, the twenty- fourth session of the Standing Committee of the Seventh NPC adopted the Territorial Sea Law.204 Subsequently, on 15 May 1996 the nineteenth session of the Standing
198 Lu, The Dynamics of Foreign-Policy Decisionmaking in China, p. 9. 199 Ibid., p. 20. 200 Stuart Harris, Globalisation and China’s diplomacy: Structure and process, Working Paper 2002/9, Department of International Relations, Research School of Pacific and Asian Studies, Australian National University, Canberra, 2002, p. 8. Rather than 1998, David Shambaugh cites 1997. His date presumably refers to Jiang’s appointment to the position at the 15th Party Congress rather than when he was endorsed as leader of the group, which occurred when Li Peng stood down at the March 1998 meeting of the NPC. David Shambaugh, “China’s International Relations Think Tanks: Evolving Structure and Process”, The China Quarterly 171, 2002, p. 580. 201 Lu, The Dynamics of Foreign-Policy Decisionmaking in China, p. 20. 202 Harris, Globalisation and China’s diplomacy, p. 8. 203 Swaine, The Role of the Chinese Military in National Security Policymaking, pp. 31-33. 204 As one scholar notes, “The Territorial Sea Law was hailed as an important measure to safeguard China’s maritime rights and interests. It is regarded as a basic law in the Chinese marine legal system.” Zou, “Navigation of foreign vessels within China’s jurisdictional waters”, p. 363.
215 Committee of the Eighth NPC approved ratification of the LOSC,205 paving the way for Beijing to deposit its instrument of ratification with the Secretary-General of the United Nations on 7 June that year. The Exclusive Economic Zone and Continental Shelf Act was approved at the third session of the Standing Committee of the Ninth NPC, held on 26 June 1998. More recently, on 26 June 2001 draft legislation to introduce economic instruments for sustainably managing resource development in the territorial sea was submitted to the NPC Standing Committee. This proposes that any person or work unit exploiting marine resources in territorial waters is to pay “compensation” to the central government in an effort to reinforce to users their economic value and to improve efficiencies by state-owned enterprises.206
Reinforcing the ties between decision unit actors is an interlocking system that bound the three top decision makers in the Party, Jiang Zemin, Li Peng and Zhu Rongji, to the foreign policy-making and legislative organs.207 Jiang was Party General- Secretary, chair of the Politburo Standing Committee and, since 1998, head of the Foreign Affairs Leading Small Group (FALSG). Li headed the NPC, was a member of the Politburo Standing Committee, a former Premier in charge of the State Council and between 1988 and 1998 chair of the FALSG. As Premier, Zhu headed the State Council and was also a member of the Politburo Standing Committee. This web of connections meant that independent action was not possible; consensus was required on major decisions.208 In relation to enactment of the maritime jurisdictional regime, consensus may have been based on the leadership group’s pragmatic emphasis to uphold economic development, national security and territorial integrity as core elements of China’s foreign policy. At the same time, problems did occur. Li Peng’s offer in Singapore in
205 “State Adopts UN’s Maritime Law”, Beijing Review 3-9 June 1996, p. 5. The advantages and disadvantages of China ratifying LOSC, as presented by Vice Minister for Foreign Affairs Li Zhaoxing to the National People’s Congress Standing Committee in 1996, are summarised in Song and Zou, “Maritime Legislation of Mainland China and Taiwan”, pp. 308-09. 206 “China to Introduce Compensation for Maritime Development”, People’s Daily, 26 June 2001. 207 See Zheng Yongnian and Li Jinshan, “China’s Politics After the Ninth National People’s Congress: Power Realignment”, in John Wong, Zheng Yongnian and Li Jinshan (eds), China After the Ninth National People’s Congress: Meeting Cross-Century Challenges, East Asian Institute Occasional Paper No. 5, World Scientific Publishing Co. Pte. Ltd and Singapore University Press, Singapore, 1998, pp. 85- 86. 208 Ibid., p. 85.
216 1989 that China was willing to discuss joint development in contested parts of the South China Sea was later reported by Chinese officials to have caught several ministries and the PLA unaware.209 “This produced serious confusion for Chinese diplomacy and undercut Beijing’s credibility in South-east Asia.”210
5.4 The Decision Unit and Foreign Policy Behaviour
Section 2.6 in Chapter 2 sets out the theoretical underpinnings for considering how a multiple autonomous actors decision unit shapes foreign policy behaviour. The key variable is the relationship among the unit members,211 providing clues about whether the unit is self-contained or externally influenceable. In particular, a multiple autonomous actors decision unit that is self-contained is characterised by a zero-sum relationship. Deadlock occurs because none of the decision unit’s members is willing to compromise. Because of this, the hypothesised foreign policy behaviour is one of passivity, with few state resources being committed to the issue and reliance on diplomacy. If the decision unit members are open to external influences, however, a non-zero-sum relationship exists. Compromise based on an agreed set of rules or process becomes possible. Hypothetically, foreign policy behaviour should be co-operative, a moderate commitment of state resources to the issue evident and a wide range of instruments of statecraft used.
In the present case membership of the decision unit is tightly controlled. Influences on their work are more open, however. In the case of the Politburo Standing Committee, external influences originate from several sources. First, Party organs and bureaucratic agencies. This includes the Foreign Affairs Leading Small Group, the
209 Paul H. Kreisberg, “China’s Negotiating Behaviour” in Thomas W. Robinson and David Shambaugh (eds), Chinese Foreign Policy. Theory and Practice, Clarendon Press, Oxford, 1994, p. 475. 210 Ibid. 211 Hermann and Hermann, “Who Makes Foreign Policy Decisions and How”, pp. 364-65.
217 Central Committee General Office,212 the Ministry of Foreign Affairs and the People’s Liberation Army (PLA). All have direct and indirect pathways of communication with standing committee members. This provides a channel for reports and recommendations generated by internal research, briefings, monitoring of foreign media and participation in bilateral and multilateral forums to reach decision makers. In this manner, analysis of external perceptions of China’s behaviour relating to the Spratly Islands and the South China Sea more broadly, and the implications for the country’s foreign relations, can be injected into the policy debate.
A second source of external influence on the decision unit is foreign policy and national security think-tanks.213 For example, the China Institute of Contemporary International Relations (CICIR) has long served the senior ranks of the leadership.214 While CICIR’s bureaucratic influence relative to the Ministry of Foreign Affairs declined in the mid-1990s, it still enjoys access to members of the Politburo Standing Committee, the Foreign Affairs Leading Small Group and the Ministry of State Security.215 Outputs from research institutes affiliated with the PLA are sent to the Central Military Commission General Office before distribution to defence policy, foreign policy and national security policy bodies, while on occasion individual military- related think-tanks submit informal analytical reports directly to the offices of Politburo
212 According to Michael Swaine the Central Committee General Office “probably co-ordinates and facilitates routine bureaucratic information flows between the defense and foreign policy sectors (i.e., through the CMC [Central Military Commission] and the FALSG [Foreign Affairs Leading Small Group] xitong), as well as higher-level contacts among senior members of both subarenas, in their capacity as PB [Politburo] members.” Kenneth Liberthal defines xitongs as “groupings of bureaucracies that together deal with a broad task the top political leaders want performed. They generally are led by leadership small groups that usually are headed by the member of the Standing Committee of the Politburo in charge of that kou [gateway] or sub-kou.” Swaine, The Role of the Chinese Military in National Security Policymaking, p. 33; Lieberthal, Governing China, p. 194. 213 David Shambaugh notes, for example, that the functions, responsibilities and influence of China’s international relations think-tanks have expanded over time to the extent that they are now important actors in the foreign policy making process. Bonnie Glaser and Phillip Saunders concur, suggesting that factors behind their rise include the government’s more pragmatic foreign policy, a greater dependence on the bureaucracy and policy making by consensus following Beijing’s decision to open up to the world. Shambaugh, “China’s International Relations Think Tanks”, p. 581; Bonnie S. Glaser and Phillip C. Saunders, “Chinese Civilian Foreign Policy Research Institutes: Evolving Roles and Increasing Influence”, The China Quarterly 171, 2002, p. 598. 214 Shambaugh, “China’s International Relations Think Tanks”, p. 582. 215 Ibid., p. 583; Glaser and Saunders, “Chinese Civilian Foreign Policy Research Institutes”, p. 599.
218 Standing Committee members.216 Some think-tanks have seen their influence or access to decision makers increase. For example, in the last five years the influence of the China Institute of International Studies on its sponsoring agency, the Ministry of Foreign Affairs, grew217 while the Shanghai Institute of International Studies had very good access to Jiang Zemin and Zhu Rongji.218
The views of think-tanks and individual researchers reach policy makers through both formal and informal channels. They include the distribution of internal (neibu) reports, small group meetings, informal consultations, institute-convened conferences, appearances in the Chinese or western media and journal and book publications.219 The extent to which decision makers give attention to think-tank contributions varies, however. Glaser and Saunders suggest four principal factors influence this: the institute’s ranking within the government, as reflected in access to classified information, pathway for transmitting reports and affiliation with a sponsoring ministry; recognised individual/institutional expertise; personal connections and life experience such as study abroad; and participation in visiting scholarship/research programmes.220
Turning to the NPC Standing Committee several avenues exist for external influence to be exerted on it. First, delegates to the committee may seek to promote personal, institutional or provincial interests through the forum. One scholar suggests, for example, that the NPC is the most accessible forum for interest groups to seek influence over national policy making.221 In this context, shared interests could result in the formation of coalitions or reciprocities of support on different policy issues and draft legislation. The delegate selection process to the standing committee reinforces the
216 Bates Gill and James Mulvenon, “Chinese Military-Related Think Tanks and Research Institutions”, The China Quarterly 171, 2002, p. 618. 217 Shambaugh, “China’s International Relations Think Tanks”, p. 583. 218 Ibid., p. 594; Glaser and Saunders, “Chinese Civilian Foreign Policy Research Institutes”, p. 600. The latter go on to observe that “the advancement of senior Shanghai political leaders [such as Jiang and Zhu] and policy advisors has also created a path for Shanghai-based think tanks to have national policy influence.” Ibid., p. 613. 219 Ibid., pp. 607-08. 220 Ibid., pp. 608-14. 221 Dowdle, “The Constitutional Development and Operations of the National People’s Congress”, p. 18- 19.
219 potential for influence ‘from the outside in.’ In particular, the emphasis is on achieving a broad representation of bureaucratic, geographical, social and factional interests; in addition, every ministry of the State Council and every provincial level unit are de facto guaranteed at least one representative.222 With such a diverse composition, unity on specific policy issues or legislative proposals may become more difficult to achieve in future. This relates not only to a more independent and assertive NPC gradually shedding its rubber-stamp image223 but also the effect of lobbying by delegates in support of their particular interests.224
Second, bureaucratic politics associated with the lawmaking process can influence the form and content of proposed legislation. As Murray Tanner notes, political battles over draft legislation shift among the Party centre, the State Council (and its ministries) and the NPC depending on where in the process a draft law is at.225 Because the lawmaking process involves five distinct steps,226 strategically targeted interventions by Party and bureaucratic interest groups can help push or undermine positions. Moreover, because an organisation’s or leader’s influence differs at each step the players seek to steer unresolved issues to those forums where they have greatest leverage.227
A third influence is through international instruments acting as an external stimulus requiring a domestic response. China’s commitments as a party to the LOSC find resonance in the domestic maritime jurisdictional regime enacted. In all, China will need to introduce up to 11 laws to establish a marine legal system that is harmonised
222 Tanner, “The Erosion of Communist Party Control over Lawmaking in China”, p. 390. 223 See for example, Dowdle, “The Constitutional Development and Operations of the National People’s Congress”, pp. 8-11. 224 Ibid., pp. 35-36. Examples Dowdle cites include revisions to the resolution approving the Three Gorges Dam project as a result of opposition by delegates in affected areas, lobbying by women delegates for more of their colleagues to be appointed to the NPC Standing Committee and using plenary session meetings to lobby for business in a delegate’s home province. 225 Tanner, “The Erosion of Communist Party Control over Lawmaking in China”, p. 384. 226 See description in Tanner, “How a Bill Becomes Law in China”, pp. 45-63. 227 Tanner, “The Erosion of Communist Party Control over Lawmaking in China”, p. 384.
220 with the LOSC.228 Legislative actions taken by other countries in relation to their maritime zones are a further external influence on the deliberations of the NPC. For example, China’s enactment of its Exclusive Economic Zone and Continental Shelf Act in June 1998 may have been catalysed by Japan and South Korea adopting laws on their respective EEZ’s in June and August 1996 respectively.229
Outside advisers are another influence. Both the NPC and its standing committee refer to legal academics and other external experts for advice in drafting and reviewing law proposals.230 Indeed, external review of draft legislation by such advisers is now a standard procedure undertaken by the Standing Committee’s Commission for Legislative Affairs and the special standing committees.231 Not only does this inject fresh ideas but also it subjects draft legislation to independent analysis.
These factors suggest the decision unit was externally influenceable. As noted earlier, hypothesised behaviour in this case centres on co-operation, a moderate commitment of state resources and use of a wide range of instruments of statecraft. In relation to the first of these predictions, rather than co-operative foreign policy behaviour China was single-minded in enacting its maritime jurisdictional measures despite a high probability the other claimants to the Spratlys, ASEAN, Japan and the US would view parts of them with concern and lodge protests. In relation to the Territorial Sea Law contentious provisions included the claim of sovereignty over areas under contest and a requirement that foreign military ships receive prior approval from the Chinese authorities to transit the territorial sea. Controversial matters in other measures enacted included the unjustified use of straight baselines in the Paracels and an inference that the approach might also be used in the Spratlys, the reference to preventing or punishing infringement of China’s security in the contiguous zone and the qualification that Beijing’s historical rights were not prejudiced by the provisions of the Exclusive
228 Zhao Enbo and Liang Jinze, “UN Convention on the Law of the Sea and China’s Marine Legislation”, Certain Issues on the UN Convention on the Law of the Sea, 1994, Beijing, p. 9 cited in Zou, “The Establishment of a Marine Legal System in China”, p. 44. 229 Song and Zou, “Maritime Legislation of Mainland China and Taiwan”, pp. 309-10. 230 Dowdle, “The Constitutional Development and Operations of the National People’s Congress”, p. 52. 231 Ibid.
221 Economic Zone and Continental Shelf Act. These aspects suggested an assertive position in establishing where and how China proposed to uphold legally its maritime rights and interests.
Several factors suggest a high commitment of state resources rather than the moderate amount predicted. One indicator is the detailed analysis behind Vice-Foreign Minister Li Zhaoxing’s 1996 presentation to the NPC Standing Committee on the advantages and disadvantages of China ratifying the LOSC.232 In relation to the South China Sea, it was argued that the convention’s provisions on historic waters “could be used to strengthen PRC rights and interests in the waters adjacent to the Spratly Islands.”233 Evaluation of the costs and benefits of LOSC ratification required a substantial commitment by experts knowledgeable about the detail of the law of the sea in order to substantiate Vice-Minister Li’s argument. Another indicator is the short time period to enact the Exclusive Economic Zone and Continental Shelf Act compared to the Territorial Sea Law. The former took only two years to become a law while the latter took eight years.
Finally, the range of instruments of statecraft was restricted to diplomacy and physical action. Diplomacy was used to reassure the other Spratlys claimants that despite controversial provisions in certain of the measures introduced, China’s support of a peaceful resolution to the South China Sea dispute remained unchanged.234 China also emphasised that the measures did not restrict freedom of navigation. A different tack was the repeated reassurances by senior politicians and diplomats that China’s priority remained economic development requiring a peaceful and stable regional environment and that it would never seek hegemony in the region.235 Diplomatic reassurances and unilateral action were not mutually exclusive, however. In May 1992, three months after
232 On the main points covered in the presentation, see Song and Zou, “Maritime Legislation of Mainland China and Taiwan”, pp. 308-09. 233 Ibid., p. 309. 234 See for example, Ma Baolin, “Legislation Doesn’t Mean Policy Change”, Beijing Review, 30 March-5 April 1992, pp. 10-11. 235 See for example, Michael Richardson, “Beijing Tries to Cool Spratlys Dispute”, International Herald Tribune, 29 November 1999 reporting remarks by Zhu Rongji.
222 the promulgation of the Territorial Sea Law, the state-owned China National Offshore Oil Company (CNOOC) let a contract to America’s Crestone Energy Corporation for exploration in the Vanguard Bank (Wan’an Bei) area. Vietnam denounced the action. China’s foreign ministry suggested, however, that the measure responded to Vietnam’s occupation of another island in the Spratlys.236 Then on 22 July that year Beijing adopted new regulations restricting fishing in China’s territorial waters, including in the South China Sea. The 1995 occupation of, and 1998 reinforcement of structures on, Mischief Reef was a further signal of China’s determination to uphold its sovereignty and jurisdictional claims over the area in spite of its action being in breach of the bilateral code of conduct agreed with the Philippines.
Overall, no fit between hypothesised and actual foreign policy behaviour emerged. Rather than co-operative foreign policy behaviour China adopted a conflictual stance. A high rather than moderate commitment of state resources was evident and instead of employing a range of instruments of statecraft it relied on two: diplomacy and unilateral action.
The instrumentalist character of law to serve the political regime’s domestic and foreign policy objectives may help explain this overall finding. Under the umbrella of implementing the international instrument of the LOSC, the government creatively introduced several concepts into its domestic maritime regime aimed at upholding its oceanic interests. These were identified above as the identification of contested marine areas such as the Paracel and Spratly Islands as belonging to China (Article 2 of the 1992 Territorial Sea Law), the declaration of unilateral power to prevent or punish infringement of China’s security within its contiguous zone (Article 13 of the 1992 Territorial Sea Law), the definition of enclosing baselines in the Paracel Islands (Point II of the 1996 Declaration of Baselines of the Territorial Sea) and the maintenance of historical rights (Article 14 of the 1998 EEZ and Continental Shelf Act). These are all
236 Michael Vatikiotis, “China stirs the pot”, Far Eastern Economic Review, 9 July 1992, pp. 14-15.
223 controversial matters not only in terms of compliance with the LOSC but also the impacts on the interests of other parties to the convention.
Anchoring the maritime regime in law sends a signal to a domestic audience that beyond direct action and diplomacy other means exist for China to uphold its “indisputable” sovereignty over the Spratly Islands group. The effect is to reinforce the nationalist credentials of the leadership and bolster its political legitimacy (see also section 5.5). At the same time the approach lends support to Michael Bennett’s view that China takes a flexible and pragmatic view of international law and uses it as a tool of foreign policy when necessary.237 Other scholars also argue for a close relationship between China’s international legal behaviour and its foreign policy.238 A suggested rank ordering of factors influencing China’s external legal behaviour are perceptions of the national interest, the international environment, domestic politics, leadership ideology, legal culture and experience with international law.239 No one factor can be isolated to explain fully the country’s legal behaviour, however.240 Despite this:
[n]ations feel obliged to justify their actions under international law, and their choice of justifications may influence their freedom of action. This, it may be judged a signal advance that the PRC now uses the rhetoric of international law to describe its behaviour in the international community, even where that rhetoric is self-serving or hypocritical. The perceived need to pay lip-service to international legal standards reflects a welcome recognition of their legitimacy. Nevertheless, the unalloyed cynicism of this evaluation illustrates the dilemma: has a new international legal consciousness pervaded the PRC, or has China merely become more legalistically astute in responding to the pressures of international relations?241
237 Michael Bennett, “The People’s Republic of China and the Use of International Law in the Spratly Islands Dispute”, Stanford Journal of International Law 28(2), 1992, p. 444. 238 James V. Feinerman, “Chinese Participation in the International Legal Order: Rogue Elephant or Team Player?”, The China Quarterly 141, 1995, p. 188. 239 Ibid., p. 189. 240 Ibid., p. 191. 241 Ibid., p. 188.
224 5.5 Domestic Politics as a Contextual Influence
While the maritime regime introduced serves to support the government’s claim to indisputable sovereignty in the Spratly Islands group, it is a double-edged sword. On the one hand, it strengthens the regime’s nationalist credentials. On the other hand, it locks in its position, making concessions in any future negotiation difficult without losing face. An aversion to internal and external perceptions of weakness, with its implications for the regime’s continued hold on power, act to favour the status quo.
The maritime regime also supports China’s economic and security interests. In particular, protecting China’s sealines of communication (SLOCs) represents the conjunction of interests between the government and the military in economic development and maritime security.242 As early as 1984 Deng Xiaoping stated the army should do nothing to harm China’s national interest in developing the country, subordinating itself to this task.243 China’s White Paper on National Defense published in 2000 reiterated the relative priorities between economics and defence.244 “The Chinese government insists that economic development be taken as the center, while defence work be subordinate to and in the service of the nation’s overall economic construction.”245 The paper goes on to stress that national defence and economic development are mutually reinforcing.246
If trade lies at the heart of China’s links to the global economy, the region’s sealanes are its arteries. By tonnage, over half of the world’s merchant fleet passes
242 A useful study examining, inter alia, the relationship between China’s maritime modernisation and economic development is Alexander Chieh-Cheng Huang, Chinese Maritime Modernization and its Security Implications: The Deng Xiaoping Era and Beyond, Unpublished Ph.D. dissertation, The George Washington University, Washington D.C., 1994. In particular, chapters IV and VI therein. 243 Deng Xiaoping, “The Army Should Subordinate Itself to the General Interest, Which is to Develop the Country”, Excerpt from a speech at a forum held by the Military Commission of the Central Committee of the Communist Party of China, 1 November 1984, The Collected Works of Deng Xiaoping, Volume III, <
225 through the South China Sea each year,247 making it a vital channel to world markets and energy suppliers in the Middle East. Between 1990 and 2000 China’s economy grew on average by 10.3 per cent annually, with strong contributions from the industry and manufacturing sectors.248 Foreign trade underpinned much of this growth. In 2001, for example, while the volume of world exports contracted by 1.5 per cent and imports grew by 0.9 per cent, the figures for China were 5 per cent and 11.3 per cent growth respectively.249 Overall, in 2001 China ranked fourth in world merchandise trade (this counts the European Union as a single trading entity).250
Energy to fuel the industrial and transport sectors plays a key role in sustaining production and distribution, particularly in the export-oriented special economic zones on China’s south-eastern coast. A net oil importer since 1993, in 2001 China’s estimated imports totalled 1.6 million barrels per day.251 As noted in Chapter 3, much of it continues to be sourced from the Middle East even as plans to enhance energy security through diversification of suppliers, fuel types and the establishment of a strategic oil reserve gather momentum. By 2020 China’s oil demand could exceed 8 million barrels a day,252 increasing its oil import dependence from about 11 per cent in 1996 to almost 60 per cent in 2020.253 Greater emphasis is being placed on gas sourced from domestic and foreign sources,254 including a 25-year, US$12 billion contract for liquefied natural
247 United States Department of Energy, Energy Information Administration, South China Sea Region, Washington D.C., 2002, <
226 gas (LNG) supply from Australia’s North-West Shelf field.255
From a strategic perspective, the maritime regime defines the extent of the geographic area for which the PLA has responsibility for ensuring the country’s security. This can be placed within the context of its role of protector of China’s territorial integrity, one of the mandates assigned to it in the Political Report of the Fourteenth Party Congress held in 1992.256 In the Congress Jiang Zemin explicitly identified defence of China’s maritime rights and interests as a mission of the PLA.257 This includes protection in depth of coastal cities from direct naval attack, exploitation of oceanic resources, increasing the catch-level from the ocean fishing fleet, SLOC security in support of foreign trade flows, the capture, occupation and defence of islands and deterrence of regional and outside powers.258
China’s maritime interest is now an element of the country’s broader national interest.259 The PLA Navy (PLAN), for example, takes the view that more than two- thirds of China’s territorial waters have been encroached upon in the last 30 years because of inadequate attention to the importance of the maritime environment and the lack of an open ocean capability.260 This type of argument, and that of assuring national security in the context of Beijing’s view that potential sea-based threats are now more
255 Media Releases, Prime Minister of Australia, “Australia wins China LNG Contract”, 8 August 2002, <
227 significant than those from land,261 provide a justification for demanding increased resources.
During the 1990s the PLAN was the favoured service for budget increases because of a doctrinal shift towards the maritime domain.262 This continued in 2001 with a large share of the 17.7 per cent increase in the defence budget allocation expected to go to the navy.263 In 2001, China discreetly upgraded its naval patrols in the South China Sea with the commissioning of a new type of vessel, the 100-metre long Qui-M-class boat. Up to 24 of these boats have been built, carrying the markings of the Customs Service (Hai Guan) and ostensibly under the command of local government. In reality, the PLAN is suspected to command and operate the boats.264
Limitations in the geographic reach of China’s air and naval forces restrict its ability to secure or disrupt regional SLOCs.265 You Ji argues that the political difficulty of attaining “section control” along the SLOCs in the South China Sea prompted a shift in tactics towards “points control” by establishing a presence in different areas.266 Partial success has been achieved through the occupation of nine features but increasing this number is difficult,267 more so after China signed the Declaration on the Conduct of Parties in the South China Sea on 4 November 2002 (see Chapter 7). Among other
261 See for example, Paul H.B. Godwin, “From Continent to Periphery: PLA Doctrine, Strategy and Capabilities Towards 2000”, The China Quarterly 146, 1996, p. 464 and p. 469. A more recent survey of China’s threat perceptions is David Shambaugh, Modernizing China’s Military. Progress, Problems, and Prospects, University of California Press, Berkeley, Los Angeles and London, 2002, pp. 284-327. 262 Lam, China after Deng Xiaoping, p. 200. 263 Anthony Bergin, “East Asian naval developments – sailing into rough seas”, Marine Policy 26(2), 2002, pp. 124-25. On March 6 2002 China’s Finance Minister Xiang Huaicheng reported to the Fifth Session of the Ninth National People’s Congress that the defence allocation for that year was to be 25.2 billion yuan, a 17.6 per cent rise over 2001. Xiang stated a large share of the increase would be used to improve salary and welfare conditions for military personnel: see Li Jun, “Budget Expanded to Raise Income of Military Personnel”, Beijing Review, 4 April 2002, pp. 20-21. 264 Robert Sae-Liu, “South China Sea Patrols Boosted”, Jane’s Defence Weekly, 26 September 2001, p. 11. 265 Ji Guoxing, SLOC Security in the Asia Pacific, Asia-Pacific Center for Security Studies Occasional Paper, Honolulu, 2000, <
228 matters, the parties commit themselves to exercise self-restraint and refrain from occupying presently uninhabited features.268 Nonetheless, the PLAN has developed guidelines for the defence and disruption of SLOCs.269 Paradoxically, in Evan Feigenbaum’s view, the United States’ emphasis on maintaining open sea lanes in Asia provides spill-over benefits to China in terms of underwriting SLOC security.270
The expansion of the PLAN’s ambitions from coastal defence to an open ocean, “blue water” capability reflects growing Chinese political, security and economic interests associated with the maritime domain.271 Championed by General Liu Huaqing as commander of the PLAN from 1982 to 1987, a three-phase approach was envisaged to attain “blue water” status. First, by 2000 expansion of capability to a “green water” first island chain stretching from the Kurile Islands, Japan, Taiwan, east of the Philippines, Borneo to Natuna Besar near Indonesia. The capability to control and interdict sealanes is a primary objective in this area.272 Second, by 2020 the ability to project force to a second island chain from the Aleutian Islands, the Bonin and Mariana Islands, the Caroline Islands down to Papua New Guinea (see Figure 11). Beijing will require enhanced air defence and anti-submarine capabilities to operate in this area.273 Finally, by 2050 the PLAN is to be a global force.274 The first phase was not achieved
268 Declaration on the Conduct of Parties in the South China Sea, Paragraph 5, <
229 and doubts persist whether the blue water ambition is attainable, despite a steady stream of asset procurements from overseas and the local defence industry.275
Figure 11: China’s First and Second Island Chain Strategy
Source: Hans Binnendijk and Ronald N. Montaperto (eds), Strategic Trends in China, Institute for National Strategic Studies, National Defense University, Washington D.C., 1998, p. 13.
275 See You Ji, “The Evolution of China’s Maritime Combat Doctrines and Models: 1949-2001”, pp. 1-35. He cites three factors that account for the gap between the current reality and attainment of blue water capability: lack of economic and technological power to undertake rapid naval modernisation, the demands of the Taiwan problem focusing attention close to home and the legacy of the Soviet model of naval strategy. A complementary study examining the implications of changes to the PLAN’s functions, strategy, arms acquisition and command and control structures is Nan Li, “Reconceptualizing the PLA Navy in Post-Mao China: Functions, Warfare, Arms, and Organization”, Working Paper No. 30, Institute of Defence and Strategic Studies, Nanyang Technological University, Singapore, 2002, <
230 Russia has supplied many of the new assets. This includes the delivery of two Sovremenny-class destroyers in 2000, equipped with a SA-N-7 “Gadfly” surface-to-air missile system and SS-N-22 “Sunburn” surface-to-surface missiles,276 four Kilo-class attack submarines277 and fifty Sukhoi SU-27 fighters.278 A contract to purchase two more Sovremenny-class destroyers for delivery by the end of 2005 has been signed, and an option taken on another two. The new ships will have improved combat systems and anti-ship, anti-submarine and air defence capabilities.279 Beijing is also to purchase eight Project 636 Kilo-class (Vashavyanka) diesel-electric submarines and four Ilyushin IL-78 (“Midas”) refueling tankers.280 A pattern of advanced aircraft purchases from Russia has also emerged. Delivery of thirty-eight SU-30MKK fighters was completed in December 2001,281 with another thirty-eight delivered in 2002-03.282 An order for another twenty-four planes with an improved radar and weapons control system to enable the use of precision-guided munitions was confirmed in January 2003.283
Domestic development and construction of several types of assets is also progressing, albeit not without problems. A nuclear-powered attack submarine known as Type 093 is expected to enter service in 2005, equipped with torpedoes, anti-ship missiles and land attack cruise missiles. In addition, a nuclear-powered ballistic missile submarine, or Type 094, is under development to replace the existing Xia-class model;
276 Robert Karniol, “China’s First Sovremenny Sets Sail for Home”, Jane’s Defence Weekly, 19 January 2000, p. 4. 277 John Downing, “China equips itself for power projection”, Jane’s Intelligence Review 12(2), 2000, p. 42. 278 Nikolai Novichkov, “China expected to buy third batch of Su-30MKKs”, Jane’s Defence Weekly, 21 August 2002, p. 14. He notes another 200 Su-27s were produced in China under licence. 279 Nikolai Novichkov, “China buys two more Project 956EM ships”, Jane’s Defence Weekly, 9 January 2002, p. 4. For a brief overview of developments in modernisation of the navy’s assets see David Saw, “In Search of Sustainable Naval Power – The Chinese People’s Liberation Army Navy (PLAN)”, Asian Military Review 10(7), 2002, pp. 17-20. 280 Nikolai Novichkov, “China’s Russian Kilo buy may put Song submarine future in doubt”, Jane’s Defence Weekly, 12 June, 2002, p. 3; Robert Sae-Liu, “PLAAF Develops New Airbases”, Jane’s Defence Weekly, 26 September 2001, p. 12; Jonathan Brodie, “China Moves to Buy more Russian Aircraft, Warships and Submarines”, Jane’s Defence Weekly, 22 December 1999, p. 13. 281 Yihong Chang, “China gets second batch of Su-30MKKs”, Jane’s Defence Weekly, 29 August 2001, p. 13. 282 Novichkov, “China expected to buy third batch of Su-30MKKs”, p. 14. 283 Henry Ivanov, “Beijing signs new ‘Flanker’ fighter deal”, Jane’s Defence Weekly, 5 February 2003, p. 12. A brief review of the evolution of PLA airpower capability is David Saw, “Moving To A New Generation – Chinese Airpower”, Asian Military Review 10(7), 2002, pp. 4-9.
231 at least two Type 094 submarines are expected to enter service by 2010.284 With the decision to purchase eight Project 636 Kilo-class submarines from Russia, it is unclear whether series production of the Chinese Type 039 Song diesel-electric submarine will now proceed.285 In April 2003 the first Type 052C guided missile destroyer (Hull No. 170) was launched and a second is at an advanced stage.286 This was followed in July by contractor’s sea trials of the first Type 052B guided missile destroyer (Hull No. 168).287 Two smaller Luhu-class destroyers and nine Jiangwi-class frigates recently entered service.288 The locally developed Jianjiji-10 (J-10) fighter is expected to enter service in 2005 followed by a sea-based version by 2010.289 Efforts to improve stealth capability include research and design work on variants of the J-10 fighter and a new twin-engine heavyweight fighter called the J-X.290 Further advanced is the FC-1 lightweight fighter, production of which was launched in January 2003. The debut flight of a prototype is expected in mid-2003.291 Power projection capabilities were strengthened in April 2000 when China successfully carried out mid-air refueling of several fighter planes.292 Ambitions to develop an aircraft carrier or aircraft carrier-like platform remain.293 In 2002 the former Soviet aircraft carrier Varyag arrived in China’s north-eastern port city of Dalian following its purchase from Ukraine in 1998 by a Macau-based company.
284 Yihong Zhang, “China’s rising forces”, Jane’s International Defense Review, 2002 (August), p. 37; Malcolm R. Davis, “Back on Course”, Jane’s Defence Weekly, 24 January 2001, pp. 23-24; Downing, “China equips itself for power projection”, p. 42. 285 Novichkov, “China’s Russian Kilo buy may put Song submarine future in doubt”, p. 3. 286 Yihong Chan, “New Chinese destroyer launched”, Jane’s Defence Weekly, 14 May 2003, p. 17. 287 “China’s new destroyer starts sea trials”, Jane’s Defence Weekly, 6 August 2003, p. 4. 288 “Navy ambitions continue to grow in line with strategy”, Jane’s Defence Weekly, 11 July 2001, p. 25. 289 Downing, “China equips itself for power projection”, p. 43. See also Craig Hoyle, “China to lift veil on its J-10”, Jane’s Defence Weekly, 20 March 2002, pp. 16-17. 290 Yihong Chang, “China promotes stealthy J-10A”, Jane’s Defence Weekly, 8 January 2003, p. 12; Yihong Chang, “China launches new stealth fighter project”, Jane’s Defence Weekly, 11 December 2002, p. 4. 291 Yihong Chang, “China launches FC-1 fighter production”, Jane’s Defence Weekly, 22 January 2003, p. 13. 292 Mark J. Valencia, “Tension in the South China Sea”, p. 31; “Intelligence: China Refuels Mid-flight”, Far Eastern Economic Review, 11 May 2000, p. 12. 293 Ian Storey and You Ji, “Chinese Aspirations to Acquire Aircraft-carrier Capability Stall”, Jane’s Intelligence Review 14(4), 2002, pp. 36-39; Peter Lewis Young, “Long Term Blue Water Ambitions of the People’s Liberation Army Navy”, Asian Defence Journal 3/2001, 2001, p. 7.
232 Ostensibly, the carrier is to be used as a floating casino but its real role may be to provide insight into design, construction and weaknesses to enemy attack.294
Bureaucratic politics has been cited to help explain the passage of certain Chinese marine legislation. In relation to the 1992 Territorial Sea Law, for example, Valencia, Van Dyke and Ludwig suggest:
[t]he PLA and the State Oceanic Administration may have pushed this law through while the Foreign Ministry and the leadership were preoccupied with other matters, or did not understand the issues. In any event, the Ministry of Foreign Affairs was left trying to reassure other claimants that this law did not signal a change in policy regarding joint development. In this explanation, the Foreign Ministry advocates shelving the disputes and cooperating with joint developments now, while the PLA advocates taking territory now for exploitation later.295
China’s lawmaking process provides scope for this type of agency manoeuvre. As Tanner notes, the top leadership relies heavily on senior advisers and their staff “to generate and screen policy options for them, and to feed them other policy-relevant information. … The top leaders may only very vaguely understand the policy options which are presented to them.”296 In this situation, “legislative proposals can almost literally be “slipped in” by key advisers, and the top leaders may even lend their powerful public endorsements to these proposals without fully appreciating the import of the proposals initiated in their names.”297 Changes in the Chinese policy making process may also play a role, related to the implications of increasing professionalisation of policy advice and advisers, pluralisation of participants and viewpoints, decentralisation
294 “Tight security around old carrier in China raises suspicions”, The Straits Times, 13 May 2002; “China: Rusting Carriers May Prove Tea Leaves for Naval Future”, Stratfor.com, 7 March 2002. 295 Mark J. Valencia, Jon M. van Dyke and Noel A. Ludwig, Sharing the Resources of the South China Sea, Martinus Nijhoff Publishers, The Hague, 1997, pp. 85-86. 296 Tanner, “How a Bill Becomes a Law in China”, p. 48. 297 Ibid.
233 of power and globalisation of the national interest in spheres as diverse as security, economics, environment.298
Attenuating this risk is the proscribed examination of a draft law at the inter- agency review stage of the process. While bureaucratic politics is expected here, since it is where the substantive content of a draft law is defined, bargaining and compromise is common.299 Just as “consensus building is central to the policy process”,300 so too in the lawmaking process because it is the step that follows inter-agency review of a draft legislative proposal.301
Bureaucratic politics, then, is an intermediate rather than end stage in the lawmaking process. In relation to the draft maritime jurisdictional measures, bureaucratic opposition principally concerned procedural and technical matters; consensus existed on the need for, and coverage of, legislation such as the Territorial Sea Law.302 This observation lends weight to Jun Zhan’s contention that the PLA and the foreign affairs ministry may have agreed on the goals of the legislation even if they diverged on its detail.303
In particular, in 1984 the State Oceanic Agency established an inter-departmental drafting group to prepare the law, drawing on relevant domestic and international reports and inputs from government agencies and experts.304 The agency has primary
298 See David M. Lampton, “China’s Foreign and National Security Policy-Making Process: Is It Changing, and Does It Matter?” in David M. Lampton (ed.), The Making of Chinese Foreign and Security Policy in the Era of Reform, 1978-2000, Stanford University Press, Stanford, 2001, pp. 1-36. 299 Tanner, “How a Bill Becomes a Law in China”, pp. 53-56. On bureaucratic bargaining see for example, David M. Lampton, “A Plum for a Peach: Bargaining, Interest, and Bureaucratic Politics in China” in Kenneth G. Lieberthal and David M. Lampton (eds), Bureaucracy, Politics, and Decision Making in Post- Mao China, University of California Press, Berkeley, Los Angeles and Oxford, 1992, pp. 33-58. 300 Kenneth Lieberthal and Michel Oksenberg, Policy Making in China. Leaders, Structures, and Processes, Princeton University Press, Princeton, 1988, p. 23. 301 See steps referred to pursuant to Footnote 112 in this chapter. 302 Interview with Zhiguo Gao, Executive Director of the China Institute for Marine Affairs, State Oceanic Administration, Beijing, October 2001. A similar point was made in an interview with Chu Shulong, Professor, Department of International Relations, Tsinghua University, Beijing, October 2001. 303 Jun Zhan, “China Goes to the Blue Waters: The Navy, Seapower Mentality and the South China Sea”, The Journal of Strategic Studies 17(3), 1994, p. 195. 304 Wang and Pearse, “The New Legal Regime for China's Territorial Sea”, p. 434.
234 responsibility for oceans policy making and management of ocean affairs. It also supervises and manages investigations, scientific research and monitoring activities relating to the marine environment.305 In debating the draft law, the PLA argued that it should identify all waters and features disputed with other countries.306 “Conservatives” from Shanxi and Hainan provinces supported this position.307 The foreign affairs ministry disagreed, preferring a general reference to them as “all the areas and islands that belong to China” in order to defuse the concern of the other claimants.308 After eight years’ work and numerous amendments the draft law was finally adopted on 25 February 1992.309 The fact that the law was adopted indicates bureaucratic politics was not an insurmountable problem.
Institutional competition over marine lawmaking in China relates more to the political level NPC, its Standing Committee and the State Council rather than the ministry level. It is in these three bodies where the real game of influencing lawmaking is played.310 They are the principal arenas where agencies need to promote and defend effectively their positions.311
Among the three bodies, the NPC has gained the ascendancy in the lawmaking domain. Three developments have facilitated this: its increased decision-making power on new legislation, the presence in the congress of a sizeable number of Party elders who exert strong informal power through the legislature and the congress’ success in obtaining increased resources.312 In addition, Central Document No. 8 issued by the
305 Sali Jayne Bache, Martin Tsamenyi and Chris Baldwin, Current Developments in Integrated Oceans Management and Governance in APEC Member Economies, Part I: National Arrangements – China, Centre for Maritime Policy, University of Wollongong, Wollongong, 2000, <
235 Chinese Communist Party Central Office in 1991 makes clear that the NPC is the pivot between the State Council and the Party Centre. This is because the State Council and its ministries are required to submit key “political” laws and plans to the NPC, which is then responsible for seeking approval for the draft from the Politburo or its Standing Committee.313 This, coupled with the decline in the Party Centre’s lawmaking influence, helps explain why the power game resides in the State Council-NPC domain. Departmental bureaucratic politics are subsumed within this broader contest. Exceptions exist, however. For example, Article 14 of the 1998 Exclusive Economic Zone and Continental Shelf Act stating that the act is not prejudicial to China’s historical rights was inexplicably inserted when the draft statute was before the NPC for adoption.314
5.6 Summary
This chapter reviewed the maritime jurisdictional regime enacted by China in the 1990s covering the Spratly Islands among other areas. Discussion of Chinese conceptions of law enabled the measures to be situated within a historical, cultural and legal context characterised by significant change since 1978 when the country began opening up to the West. At the same time continuity is evident in some aspects, such as the instrumentalist use of law. The decision units approach was applied to gain insight into which actor group made decisions about the enactment of the jurisdictional measures, how foreign policy behaviour was influenced by the unit’s decision-making process and the role of domestic politics.
Between 1992 and 1998 a comprehensive regime covering China’s coastal baselines, the territorial sea, the contiguous zone, the EEZ and the continental shelf was established. This was a commendable achievement. The regime was based on the LOSC, reflecting Beijing’s status as a signatory and subsequently party to the instrument. While most of the provisions in the measures enacted conform to the convention, a number do
313 Ibid., p. 74. 314 Zou, “Historic Rights in International Law and in China’s Practice”, p. 160 and endnote 90 on p. 167.
236 not. This has created concern among other claimants to the Spratly Islands as well as with neighbouring and extra-regional states not party to the dispute.
Law in China has a long history, interrupted by the chaos of the decade-long Cultural Revolution. An implication of China’s closer integration with the world economy is renewed emphasis on law, especially the rule of law. This was given impetus by the March 1999 adoption by the National People’s Congress of an amendment to Article 5 of China’s current constitution,315 confirming the principles of both rule of law and the development of a socialist rule-of-law state. Concern remains, however, that instrumentalist rule by law rather than impartial rule of law continues to dominate.316
In relation to this study, motivations for China’s renewed embrace of law appear to lie in three areas. First, the establishment of a legal framework to facilitate continued foreign trade and investment flows. Second, as a means to support the maintenance of territorial integrity and protection of resources in the context of Jiang Zemin’s priority to strengthen patriotism. And third, the growing influence of a cadre of younger law scholars and policy advisers with expertise in international law, including the law of the sea.
Multiple autonomous actors were identified as the decision unit behind the maritime jurisdictional regime established in the 1990s. The members were the Politburo Standing Committee and the National People’s Congress Standing Committee. The former stands at the head of the formal foreign policy decision-making system through a chain of command taking in the Foreign Affairs Leading Small Group and the Ministry of Foreign Affairs. The National People’s Congress Standing Committee is responsible for enacting basic laws. It adopted the Territorial Sea Law and the Exclusive
315 The People’s Republic of China has adopted four constitutions: in 1954, 1975, 1979 and 1982. 316 Democracy as a supporting condition for rule of law in China is a contested notion. See for example, Wei Pan, “Toward a Consultative Rule of Law Regime in China”, Journal of Contemporary China 12(34), 2003, pp. 3-43; and Randall Peerenboom, “A Government of Laws: democracy, rule of law and administrative law reform in the PRC”, Journal of Contemporary China 12(34), 2003, pp. 45-67.
237 Economic Zone and Continental Shelf Act. In addition, it approved China’s ratification of the LOSC.
In considering foreign policy behaviour, several factors suggested the decision unit was vulnerable to external influences. This included inputs from Party organs and bureaucratic agencies, such as the Foreign Affairs Leading Small Group, the Central Committee General Office, the Ministry of Foreign Affairs and the PLA. Other influences included foreign policy and national security think-tanks, factional and coalitional alignments associated with the NPC membership, inter-agency competition and external stimulus from commitments under the LOSC. As a party to the latter, China acquired both rights and responsibilities. This included a responsibility to harmonise its domestic legislation with the convention’s provisions.
Hypothetically, the foreign policy behaviour of an externally influenceable decision unit is a co-operative stance, a moderate commitment of state resources and the use of a range of instruments of statecraft. In the present case no correspondence was found between hypothesised and actual behaviour. One reason for this may be the instrumentalist character of law in China to serve domestic and foreign policy objectives of the regime.
Domestic politics as a contextual influence related to several levels. First, factors behind the enactment of the maritime jurisdictional regime. They included anchoring the maritime regime in law to signal to a domestic audience that in addition to direct action and diplomacy other means existed for China to uphold its “indisputable” sovereignty over the Spratly Islands group in defending its territorial integrity. Second, an economic dimension. The maritime regime related to sovereign rights and responsibilities for resource development in the respective maritime zones as specified in the LOSC. The
238 economic function of law has a long tradition in China.317 Third, a strategic consideration. China has reoriented its security focus from the land to the maritime domain. In this context, the maritime regime established the limits in the sea of the PLA’s responsibility. The military’s support for the maritime jurisdictional measures was placed within the PLA’s role of protector of China’s territorial integrity and its maritime rights and interests, roles assigned to it at the 1992 Fourteenth Party Congress.
A second level concerned institutional competition in marine lawmaking. While bureaucratic politics has been invoked to help explain the passage of certain Chinese marine legislation, such as the 1992 Territorial Sea Law, examination of the lawmaking process suggested that inter-agency battles were an intermediate rather than end stage. Rather than the ministry level, competition for influence in domestic marine lawmaking related to the higher political level of the National People’s Congress, its Standing Committee and the State Council. Among these three bodies, the NPC Standing Committee was the body that adopted the suite of measures covering China’s maritime space and approved ratification of the LOSC. This reflected two factors. First, the NPC has gained the ascendancy in lawmaking. Second, the full NPC meets only once a year while its standing committee meets more frequently.318 In between plenary sessions of the full congress the NPC’s Standing Committee has the authority to exercise state and legislative power.
317 Derk Bodde and Clarence Morris, Law in Imperial China, Harvard University Press, 1967, Cambridge; and M. Dutton, Policing and Punishment in China: From Patriarchy to “The People”, Oxford University Press, Hong Kong, 1992. Both cited in Potter, The Chinese Legal System. Globalization and local legal culture, p. 10. 318 Lieberthal, Governing China, p. 162.
239 6.0 CHINA-PHILIPPINES CONTESTATION OVER MISCHIEF REEF
““Surprise” and “straight-forward” operations give rise to each other endlessly just as a ring is without a beginning or an end.” Sun-Tzu1
“Great powers, very often, probe for soft spots. They determine whether they can make some gains at very little or negligible cost. Throughout history, that is how great powers have conducted themselves. China is no different.”
Senator Blas Ople, the Philippines2
Mischief Reef (referred to as Meiji Jiao by China, Panganiban Reef by the Philippines and Vanh Khan by Vietnam) is a rock outcrop located 135 nautical miles west of Palawan. Horseshoe-shaped, the feature is nine kilometers (km) long, six km wide and submerged at high tide.3 It lies within the 200 nautical miles exclusive economic zone of, and on the continental shelf claimed by, the Philippines4 and falls within a broader geographical area claimed by Manila called the Kalayaan Island Group (KIG). It is also a feature that is included within the South China Sea claims of China, Taiwan and Vietnam. Most prominent is the dispute over the feature between China and the Philippines, on which this chapter focuses.5
We begin by surveying developments in the Mischief Reef dispute between 1995 and 2002. Following this, the decision units approach elaborated in Chapter 2 is applied to determine which actor configuration -- the predominant leader, a single group or
1 Roger T. Ames, Sun-Tzu. The Art of Warfare. The First English Translation Incorporating the Recently Discovered Yin-Ch’üeh-Shan Texts, Ballantine Books, New York, 1993, p. 120. 2 Quoted in Marites D. Vitug, “Mischief in the Spratlys”, Newsweek, 21 December 1998, <
240 multiple autonomous actors -- was the decision unit in Beijing and Manila on Mischief Reef. How the decision unit shaped each government’s foreign policy behaviour is then examined before considering the influence of domestic politics. Finally, the chapter’s key points are summarised.
6.1 A Survey of the Mischief Reef Dispute, 1995-2002
In February 1995 Manila made public its discovery of structures built by China on Mischief Reef, even though Philippine patrols had first spotted them the previous November.6 China’s action signaled for the first time a move against a member state of the Association of Southeast Asian Nations (ASEAN)7 and a departure from its previous pattern of targeting only features claimed by Vietnam in the Paracel and Spratly Islands. It also precipitated a deterioration in the good relationship between China and the Philippines following their normalisation of ties in June 1975.8 Prior to Mischief Reef Manila did not view Beijing as a short-term threat; the relationship between 1975 and 1995 was considered “cordial at the political level, and warm in terms of the cultural and people-to-people aspects, but only marginally successful in their economic objectives.”9
The Mischief Reef structures comprised four platforms on stilts, on top of which were built three to five octagonal bunkers with satellite communications equipment.10 Beijing defended the construction by claiming the structures were only shelters for
6 Rigoberto Tiglao, “Remote Control. China expands reefs to extend claims”, Far Eastern Economic Review, 1 June 1995, p. 20 7 Vietnam did not become a member of ASEAN until July 1995, five months after the discovery of China’s structures on Mischief Reef. 8 For example, after 1975 China sold oil to the Philippines at ‘friendship prices’. Amounting to 10 per cent of the Philippines’ oil imports, this provided a strong economic incentive for Manila to maintain good relations with Beijing. The arrangement also had domestic political value. By diversifying oil import sources from the Middle East it reduced the potential leverage of any oil embargo by Muslim oil- producing countries sympathetic to the cause of Muslim rebels in the Philippines’ southern provinces. Purificacion C.V. Quisumbing, Beijing-Manila Détente. Major Issues. A Study in China-Asean Relations, University of the Philippines Law Center and Foreign Service Institute, Manila, 1983, p. 7 and p. 280. 9 Aileen San Pablo Baviera, “Perceptions of a China Threat: A Philippine Perspective” in Herbert Yee and Ian Storey (eds), The China Threat: Perceptions, Myths and Reality, RoutledgeCurzon, London and New York, 2002, p. 250. 10 Tiglao, “Remote Control”, p. 20; Ian James Storey, “Creeping Assertiveness: China, the Philippines and the South China Sea Dispute”, Contemporary Southeast Asia 21(1), 1999, p. 97.
241 fishermen,11 an assertion rejected by Manila. Because of the decrepit state of the Philippines’ airforce and navy and its weak economic situation there was little leverage it could exert to pressure China into dismantling the structures. The arrest of Chinese fishermen and the removal of Chinese markers on the contested features of Pennsylvania Reef, Jackson Atoll, First Thomas Shoal, Second Thomas Reef and Half Moon Shoal in February-March 1995 were the extent of the Philippines’ physical response. Fear of a military confrontation meant Manila made no attempt to evict China from Mischief Reef itself.12
Diplomacy was the only practical option available to the Philippines. Manila would launch “quiet diplomacy” to persuade China to honour the 1992 ASEAN Declaration on the South China Sea (the so-called Manila Declaration) according to Foreign Affairs Secretary Roberto Romulo.13 Among the provisions of the declaration was a commitment to resolve all sovereignty and jurisdictional issues by peaceful means and to exercise restraint to create a positive climate for the eventual resolution of all disputes14 (see also Chapter 7). The Philippines adopted a three-pronged diplomatic strategy: bilateral dialogue with China, regional outreach within the context of ASEAN, the ASEAN Regional Forum (ARF) and internationally through seeking the support of the United Nations (UN) and countries such as the United States (US) and Japan.15
Manila sought regional support via ASEAN to denounce China’s actions in Mischief Reef. On 18 March 1995 ASEAN foreign ministers issued a statement expressing their concern about developments in the South China Sea and urged all
11 Tiglao, “Remote Control”, p. 20. 12 Rodney Tasker, “A Line in the Sand”, Far Eastern Economic Review, 6 April 1995, p. 14 ; Michael Ricahrdson, “US and ASEAN tiptoe round China on Spratlys”, Asia-Pacific Defence Reporter XXI(8/9), 1995, p. 17. 13 Nayan Chanda, Roberto Tiglao and John McBeth, “Territorial Imperative”, Far Eastern Economic Review, 23 February 1995, p. 15. 14 See ASEAN Declaration on the South China Sea (1992), Manila, Philippines, 22 July 1992, <
242 concerned to adhere to the letter and spirit of the 1992 Manila Declaration.16 The ministers called on all parties to refrain from actions that destablised the region and further threatened the peace and security of the South China Sea. They called for “the early resolution of the problems caused by recent developments in Mischief Reef” and encouraged countries in the region to undertake co-operative activities to build trust, confidence and stability in the area.17
In August 1995 Manila pushed to have the dispute discussed at the ARF’s second meeting in Brunei. Not wishing to antagonise China during the fledging group’s start-up phase, there was little support for the Philippines’ proposal.18 The Chairman’s Statement from the meeting contained two references to the South China Sea: a commendation of the series of informal Workshops on Managing Potential Conflicts in the South China Sea as a means to promote dialogue and co-operation (Paragraph 10) and an expression of concern about overlapping sovereignty claims in the region (Paragraph 11).19 The latter paragraph encouraged all claimants to reaffirm their commitment to the principles in relevant international laws as well as the 1992 Manila Declaration on the South China Sea.20 Prior to the meeting China’s Foreign Minister Qian Qichen offered several positive remarks: China was willing to discuss the South China Sea dispute in multilateral forums, to resolve territorial disputes according to the LOSC, to shelve all development and to publish a paper on its national defence policy.21 One commentator suggests that Qian’s remarks were motivated by a desire not to alienate ASEAN at a time of worsening Sino-US relations and to respond to the membership’s united stance at a meeting with Chinese officials in April 1995 in Hangzhou.22
16 Recent Developments in the South China Sea (1995), 18 March 1995, <
243 Delegations from China and the Philippines met in Manila on 9-10 August 1995 to discuss the Mischief Reef dispute and the broader South China Sea issue, and issued a
Joint Statement on the South China Sea and on Other Areas of Cooperation.23 On the Mischief Reef dispute the two sides agreed to hold further consultations to resolve their differences. Pending resolution of the dispute, eight “principles for a code of conduct in the area” were agreed. First, territorial disputes between the two sides were to be quarantined from the normal development of their relations. Disputes were to be settled in a peaceful and friendly manner through consultations. Second, efforts to build mutual confidence and trust to strengthen an atmosphere of regional peace and stability were stressed. In this context, the two parties agreed to refrain from using force or threat of force to resolve disputes. Third, an incremental process of co-operation was to be adopted to progressively narrow differences and promote an eventual negotiated settlement of bilateral disputes. Fourth, the two sides agreed to settle their disputes in accordance with international law, including the United Nations Convention on the Law of the Sea (LOSC). Fifth, both parties were to keep an open mind on initiatives and proposals of regional states to pursue multilateral co-operation in the South China Sea “at the appropriate time”. Tests that would satisfy this clause were undefined. Sixth, promotion of bilateral functional co-operation in the areas of marine environmental protection, safety of navigation, prevention of piracy, marine scientific research, disaster mitigation and control, search and rescue operations, meteorology and marine pollution control was agreed to. The possibility of multilateral co-operation in some of these areas was also accepted. Seventh, all parties were urged to co-operate in the protection and conservation of the South China Sea’s marine resources. Finally, disputes were to be settled by the countries directly concerned without prejudice to the freedom of navigation in the Sea.
22 Ibid., pp. 19-20. 23 See Joint Statement RP-PRC Consultations on the South China Sea and on Other Areas of Cooperation, 9-10 August 1995, Manila. Reprinted in Scott Snyder, Brad Glosserman and Ralph A. Cossa, Confidence Building Measures in the South China Sea, Issues and Insights No. 2-01, Pacific Forum Center for Strategic and International Studies, Honolulu, 2001, pp. D-1 – D-2, < 244 To give substance to the commitments entered into, the joint statement went on to note that the two sides agreed to hold expert-level discussions on legal issues and economic co-operation. A specific issue nominated for discussion was fisheries co- operation in the disputed area. The importance of bilateral co-operative activities in and of themselves and as confidence-building measures was acknowledged as was the need for a pragmatic approach. The developments in Mischief Reef reportedly prompted the US to take a closer interest in the South China Sea dispute despite fears that this would be viewed negatively by China.24 Initially Washington reiterated its long-standing position opposing the threat or use of force to support claims, neutrality on the legal merits of the competing claims and a willingness to assist in resolving the Spratlys dispute. On 10 May 1995 the State Department underlined US concern about any maritime claim or restriction on maritime activity in the South China Sea that was inconsistent with international law.25 Assistant Secretary of Defence Joseph Nye extended this position in his 16 June remark that if military action in the Spratlys interfered with freedom of navigation then the US would be prepared to escort ships to assure their passage.26 An improvement in relations between Washington and Manila was another result. Fallout from the Philippines’ 1992 eviction of the US from its bases at Clark and Subic Bay had been swift. Washington’s development assistance aid to Manila was reduced by two-thirds, a joint US-Japan Multilateral Assistance Initiative valued at US$10 billion was stopped and staff numbers at the US Embassy were reduced.27 However, in the view of one American official “Mischief Reef has given a kick to issues_scs.pdf>>, accessed 4 August 2003. 24 Storey, “Creeping Assertiveness”, p. 111 and footnote 65 thereon; Nigel Holloway, “Jolt from the Blue. U.S. prodded to firm up its policy on Spratlys”, Far Eastern Economic Review, 3 August 1995, p. 22. It also raised questions about whether the US knew about China’s occupation of the reef but failed to provide this information to the Philippines: see John McBeth, “Who Knew What?”, Far Eastern Economic Review, 6 April 1995, p. 15. 25 Holloway, “Jolt from the Blue”, p. 22. 26 Ibid. 27 Frank Cibulka, “The Philippine Foreign Policy of the Ramos Administration: The Quest for Security of a Weak State”, Asian Journal of Political Science 7(1), 1999, p. 114, p. 121 and p. 125. 245 bilateral relations. This is what we wanted to happen”.28 One commentator suggests that each side sought to use Mischief Reef for different but mutually reinforcing aims.29 On the one hand Manila sought a security guarantee from the US for its Kalayaan claim. On the other hand Washington wanted access by its military to facilities in the Philippines to provide flexibility in forward-basing and power projection capacity to deal with any contingencies in the South China Sea, whether related to freedom of navigation or Taiwan.30 In this regard, Washington viewed with concern China’s launch of missiles close to Taiwan in July and August 1995 and then again in March 1996.31 Reflecting the extent of the rekindled ties, Republican Senator Larry Pressler proposed in May 1995 that the Philippines receive eleven of the twenty-eight F-16 fighters originally bought by Pakistan but whose delivery had been embargoed since 1990 because of an inability to verify that Islamabad did not possess nuclear weapons.32 Reportedly, eighteen F-16s were offered for purchase at a cost of US$240 million but Manila was unable to find the necessary funds.33 Other indicators of closer co-operation included the training by US navy commandos of Philippine troops stationed near the Spratlys, commencement of negotiations on an agreement covering visits to the Philippines by US military personnel and the issuing of a contract for the refit and resupply of US vessels as well as discussions about holding multilateral naval exercises.34 These initiatives went some way to overcoming Philippine disappointment that the US did not consider their 1951 Mutual Defence Treaty applying to the disputed Kalayaan Island Group generally or to the Mischief Reef dispute in particular.35 With the conclusion of the Philippines-China joint statement and the ASEAN foreign ministers’ communication in 1995, Manila considered that a basis now existed 28 Cited in Holloway, “Jolt from the Blue”, p. 23. 29 Greg Austin, “Unwanted Entanglement: The Philippines’ Spratly Policy as a Case Study in Conflict Enhancement?”, Security Dialogue 34(1), 2003, p. 42 and p. 49. 30 Ibid. 31 Ibid., p. 46. 32 Holloway, “Jolt from the Blue”, p. 23. 33 Storey, “Manila looks to USA for help”, p. 48. 34 Holloway, “Jolt from the Blue” p. 23. 35 See Storey, “Creeping Assertiveness”, pp. 109-11. 246 for managing the dispute. Giving impetus to this optimism was the establishment in March 1996 of three bilateral working groups covering fisheries co-operation, marine environmental protection and confidence building measures. New developments dashed this hope. Between March and May 1996 China upgraded the capability of the Mischief Reef facility with additional electronic communications and surveillance equipment.36 Then in May 1997 the Philippines protested the presence of three Chinese navy vessels in the vicinity of Kota (known as Loaita Island internationally) and Panata (Lankiam) islands and the discovery of hut-like structures built over a reef 10 km northeast of the former island.37 Suspicions that China intended to strengthen its structures on Mischief Reef emerged following the July 1997 sighting of three Chinese military vessels in the area.38 In October 1998 it was discovered that China was reinforcing its presence on Mischief Reef by building frames for concrete foundations beside two existing structures.39 A three-storey building and a helicopter landing pad were subsequently constructed, expanding the size, functionality and strength of the reef’s structures. Construction was completed in January 1999. Although Manila protested this action as a violation of the 1995 bilateral code of conduct, Beijing denied this was the case and insisted the work was undertaken to repair the existing fishermen’s shelters. This was disingenuous given the increased site coverage associated with the construction of an entirely new structure. In its defence China stated it had previously informed the Philippines Embassy in Beijing of the impending work.40 China also sought to portray the 1998 fortification as work authorised by local authorities and not the central government.41 To Philippines Defence Secretary Orlando Mercado the new development was “the farthest projection of China’s power, and a dagger at our underbelly.”42 36 Ibid., p. 98. 37 “Manila on alert over China’s Spratly presence: Ramos”, Asian Political News, 5 May 1997. 38 “Awaiting Mischief”, Far Eastern Economic Review, 28 August 1997, p. 12. 39 Storey, “Creeping Assertiveness”, p. 98; Rigoberto Tiglao, Andrew Sherry, Nate Thayer and Michael Vatikiotis, “‘Tis the Season”, Far Eastern Economic Review, 24 December 1998, p. 18. 40 Ibid. 41 Barry Wain, “Asean’s Inaction Encourages Chinese Audacity”, The Asian Wall Street Journal, 25 June 1999. 42 Tiglao, Sherry, Thayer and Vatikiotis, “‘Tis the Season”, p. 18 247 The 1995 and 1998 developments underlined three uncomfortable realities for the Philippines. First, procrastination in modernising the armed forces had severely degraded the capability to defend against external threats. Despite a 1990 recommendation by President Corazon Aquino to upgrade the defence force’s capabilities, with the navy and airforce as top priorities,43 little progress was achieved during her administration.44 This remains the case despite the enactment of the Armed Forces of the Philippines Modernisation Act in 199545 that set out a 15-year force development programme separate from the regular defence budget appropriation. Under the modernisation programme the first tranche of 50 billion pesos (US$1.23 billion) was earmarked for delivery between 1997 and 2001,46 a target that was not achieved. Partly this was because of budgetary problems associated with competing public policy priorities, such as education, health, poverty alleviation, housing and infrastructure programmes. The 1997-1999 regional financial crisis exacerbated the funding difficulty. In February 1998 Defence Secretary Fortunato Abat indicated, and President Estrada subsequently confirmed, that procurement of 70 per cent of new equipment and weapons needed to modernise the armed forces would be deferred.47 Reflecting this situation, in July 1998 bids for a multi-role fighter and offshore patrol boats were postponed.48 More tellingly, the 50 billion pesos originally budgeted has dwindled to 5.48 billion pesos.49 Modernisation of the navy and airforce has been suspended; the focus now is on bolstering the army’s capability,50 presumably to deal with internal security threats arising from the war on terrorism. 43 Renato Cruz de Castro, “Adjusting to the Post-U.S. Bases Era: The Ordeal of the Philippine Military’s Modernization Program”, Armed Forces and Society 26(1), 1999, pp. 119-20 and p. 123; Tai Ming Cheung, “Fangs of the dragon”, Far Eastern Economic Review, 13 August 1992, p. 20. 44 Storey, “Creeping Assertiveness”, pp. 104-106; Storey, “Manila looks to USA for help”, p. 48. 45 On the modernisation programme see for example, Rodney Tasker, “Ways and Means. Manila plans an expensive military upgrade”, Far Eastern Economic Review, 11 May 1995, p. 28.” 46 Robert Karniol, “Philippines seeks additional defence funding”, Jane’s Defence Weekly, 5 September 2001, p. 17. 47 Graeme Cheeseman, “Asia-Pacific security discourse in the wake of the Asian economic crisis”, The Pacific Review 12(3), 1999, p. 340. 48 Luz Baguioro, “Manila puts bulk of arms deals on hold”, The Straits Times, 3 February 1998; Damian Bristow, “Pointers-defence: Asia’s crash causes defence cuts”, Jane’s Intelligence Review, 1998, p. 7 cited in Cheeseman, “Asia-Pacific security discourse”, p. 340. 49 Robert Karniol, “Upgrade project in Philippines set for ratification”, Jane’s Defence Weekly, 19 April 2000, p. 14. 50 Ibid. 248 A modest upgrade of the three Jacinto-class corvettes purchased from the United Kingdom in 1997 following service in Hong Kong awaits approval by the Secretary of Defence.51 In the first phase, costed at US$17.05 million and expected to last two years, the vessels will be fitted with a new fire control system, improved gunnery and new navigation and communication systems.52 The navy has yet to take a decision to proceed beyond this phase. Should it do so, subsequent work would include the installation of improved engineering and safety systems as well as training and maintenance support.53 The airforce may purchase a number of F-5E fighters surplus to Taiwan’s needs, which Manila considers an interim measure until it can afford more modern planes.54 In return, Taipei sought permission for its fighters to land at Clark airbase because it does not have enough airspace at home for training.55 Notwithstanding the Mischief Reef dispute, and since 1997 contestation with China over Scarborough Shoal,56 vigorous debate about the funding of the military modernisation programme continues.57 In July 2001 Defence Secretary Angelo Reyes revealed that the Arroyo administration was considering turning the Subic Bay facility into a naval servicing and repair centre available to foreign militaries on a user-pays basis. As he put it, “[w]e have assets – real estate – that have no immediate utilization. To enable us to modernize more rapidly, we have to be creative in looking for sources of financing.”58 In late 2001 President Arroyo sought Congressional approval for a 16.5 per cent defence budget increase to 59.65 billion pesos (US$1.17 billion) for 2002. This sum represented 7.6 per cent of the overall national budget of 780.8 billion pesos.59 Disagreement about the types of military assets to be purchased has also held up 51 Robert Karniol, “Philippine Navy awaits approval on corvette upgrade”, Jane’s Defence Weekly, 25 September 2002, p. 18. 52 Ibid. 53 Ibid. 54 “RP wants Taiwan jets for ‘interim fighter fleet’”, Philippine Daily Inquirer, 16 September 2002. 55 Ibid. 56 See for example, Zou Keyuan, “Scarborough Reef: A New Flashpoint in Sino-Philippine Relations?”, IBRU Boundary and Security Bulletin 7(2), 1999, pp. 71-81. 57 Cruz de Castro, “Adjusting to the Post-U.S. Bases Era”, pp. 119-138 provides a useful overview of the political and budgetary twists and turns in the modernisation programme between 1991 and 1998. 58 Thomas Fuller, “Subic Bay May Be Up for Rent”, International Herald Tribune, 13 July 2001. See also Alan Robles, “Subic set to say ‘hello sailor’ again”, South China Morning Post, 22 July 2001. 249 appropriation to the modernisation fund. On the one hand, the military supported the purchase of extra ships to patrol the Kalayaan Island Group while Senate Finance Committee Chairman John Osmena argued that priority should be given to buying field weapons and helicopters.60 For the president, maintaining the military’s support by demonstrating progress on defence budget allocations and consultation on policy remains central to her hold on power.61 A second reality, related to the first, was that dependence on the US to guarantee the country’s external security had not been extinguished. As Defence Secretary Mercado noted in 1998: What we are saying is that in the interest of stability in the region there should be [an] American presence because if there is no American presence, we all know who would come in. Isn’t it already obvious?62 The de facto security blanket of the US presence had provided Manila a ‘free ride’ in deterring external security threats. With this blanket removed, China’s move on Mischief Reef exposed the woeful state of the Armed Forces of the Philippines (AFP) to defend against such threats. The Visiting Forces Agreement (VFA) ratified by the Philippines Senate in May 1999 provided a means to revitalise military co-operation between the two countries and provided comfort to Manila that a limited US deterrent 59 Karniol, “Philippine Navy awaits approval on corvette upgrade”, p. 17. 60 Rocky Nazareno, “John O blocks defense budget for modernization”, Philippine Daily Inquirer, 12 December 2001. 61 Precedents exist demonstrating the importance of the military’s support. Sections of the military were involved in coup attempts during the Aquino presidency while the withdrawal of the military’s support for President Estrada in favour of then Vice-President Gloria Macapagal-Arroyo during the so-called EDSA 2 rally in mid-January 2001 assisted her installation as leader. The repercussions of the military’s actions continue to reverberate: see “Macapagal defends EDSA 2 military backers”, Philippine Daily Inquirer, 17 May 2002; “EDSA 2 military leaders ready to face mutiny raps”, Philippine Daily Inquirer, 16 May 2002; Ruben B. Cal, “EDSA 2: AFP had to act swiftly to avoid a civil war”, The Manila Times, 20 January 2002. EDSA in full is Epifanio de los Santos, or Epiphany of the Saints, Avenue. It first gained recognition with the people’s power rally calling for the ouster of President Marcos. 62 “RP pushes for US presence amid row”, The Nation, 8 November 1998. The last part of Mercado’s remarks was in reference to China’s occupation and construction on Mischief Reef. 250 was now in place to hopefully check further Chinese expansion in the Spratlys. Other voices doubted the application of the VFA to this endeavour, however.63 In practical terms the US military presence in the Philippines is implemented through the annual joint ‘Balikatan’ (meaning ‘shoulder to shoulder’ in Tagalog) military exercises held within the framework of the VFA. In 2002, twelve exercises were held on Philippines territory under this arrangement.64 At the formal launch of the second Balikatan 2002 exercise in April Philippines Foreign Affairs Secretary Teofisto Guingona Junior suggested the training should be broadened.65 He proposed joint training on the protection of the country’s territorial waters and marine resources, estimating that annually US$50 billion worth of marine resources was lost to poachers and illegal fishing activities because of the inability of the AFP to conduct adequate maritime surveillance.66 The war on terrorism launched after the attacks on the US on 11 September 2001 added an extra dimension to the military co-operation between the two countries. In particular, US troops were invited to strengthen the AFP’s anti-terrorism skills and to carry out civil engineering projects to improve local infrastructure on Basilan Island. Further enhancing military co-operation between the two countries is the Mutual Logistics Support Agreement (MLSA), concluded in December 2002.67 The agreement allows the US military to forward deploy supplies to the Philippines and to use local 63 Remarks by Philippines Foreign Affairs Secretary Domingo Siazon and Commander-in-Chief, US Pacific Command Dennis Blair quoted in Storey, “Manila looks to USA”, p. 50. 64 Martin P. Marfil and Juliet L. Javellana, “2,665 US troops arriving”, Philippine Daily Inquirer, 21 march 2002. 65 Aris R. Ilagan, “Guingona opens Luzon Balikatan”, Manila Bulletin, 22 April 2002; Martin P. Marfil and Christine Herrera, “Guingona proposes change in future RP-US war games”, Philippine Daily Inquirer, 22 April 2002. 66 Ibid. 67 Raymund José Quilop, “Manila, Washington sign pact on logistic support exchange”, Jane’s Defence Weekly, 11 December 2002, p. 15. 251 bases in peace-time exercises and during times of conflict.68 This led some commentators to question whether it was a prelude to a longer term US presence in the country, including the re-establishment of bases.69 Both US Secretary of State Colin Powell and Admiral Dennis Blair, then Commander-in-Chief of the US Pacific Command, denied this.70 Powell in particular underlined this in stating: … there was something of a presumption that the United States might see a benefit of a presence in the Philippines suggesting that we are looking for some kind of permanent presence or going back to where we were previously. Not the case. … the United States is not looking for bases or new permanent presence in the Philippines or in this part of the world.71 The third reality was that the bilateral code of conduct had demonstrably failed to constrain China’s behaviour. A point of weakness (or opportunity, depending on one’s perspective) was the absence of any mechanism to handle non-compliance. Moral force and peer pressure were shown to be ineffectual. Despite Manila’s protests Beijing had achieved a fait accompli, leaving it in effective possession of Mischief Reef and with little likelihood of being dislodged or subjected to meaningful censure. In an apparent concession, in January 1999 China’s Ambassador to the Philippines, Guan Dengming, reportedly signaled that Filipino fishermen would be allowed to use the Mischief Reef 68 “When is “Not a Base” Still a Base for US?”, 3 September 2002, < 252 facility under a proposed joint use and development concept advanced by Beijing to promote a peaceful resolution to the dispute.72 At the international level, the Philippines sought support through several avenues. In the view of Blas Ople, Chair of the Philippines Senate Committee on Foreign Relations, “[w]e cannot and should not keep this issue within bilateral channels, considering its grave international implications.”73 A Philippines suggestion that the dispute be referred to the International Tribunal on the Law of the Sea (ITLOS), a body established under the LOSC, was rejected by China.74 This was in spite of China’s commitment in the 1995 bilateral code of conduct to settle disputes in accordance with international law, including the LOSC. Taking a different tack, President Estrada requested that United Nations Secretary General Kofi Annan use his ‘good offices’ to intervene and allow the Philippines to seek United Nations Security Council arbitration on the matter. Predictably, China rejected the idea.75 Another approach used by Manila was to lobby for discussion of the dispute in the 1999 Asia-Europe Meeting (ASEM) held in Berlin, despite China’s objection and the host country’s disinclination to include it on the agenda.76 In the same vein, at the 101st Interparliamentary Union Conference held in Brussels in April 1999 Philippines Senator Blas Ople demanded that China withdraw from Mischief Reef, triggering a vigorous response by the Chinese delegation.77 Disappointment sums up the Philippines’ reaction to ASEAN’s unwillingness to issue a strong response to China’s 1998 reinforcement of Mischief Reef. Unlike in 1995, ASEAN’s criticism of China’s latest action was mild. Paragraph 30 of the Hanoi Declaration from the Sixth ASEAN Summit held on 15-16 December 1998 merely 72 “Filipinos can use Mischief structures”, The Straits Times, 28 January 1999. 73 “Manila to Seek ASEAN Support over Spratlys”, Central News Agency (Taiwan), 12 December 1998. 74 Zha and Valencia, “Mischief Reef: Geopolitics and Implications”, p. 89. 75 Ibid., p. 90; Storey, “Manila looks to USA”, p. 47; Diego C. Cagahastian, “UN chief lauds Erap on Spratlys, Mindanao issues”, Manila Bulletin, 19 March 1999. 76 “Philippine diplomats told to raise South China Sea dispute at ASEM”, Agence France-Presse, 24 February 1999; Cathy Rose A. Garcia and Norman P. Aquino, “Madrid supports Manila bid to discuss Spratlys issue at Berlin meet – Ople”, BusinessWorld (Philippines), 18 February 1999. 253 reiterated the membership’s commitment to settle disputes in the South China Sea by peaceful means in accordance with international law, including the LOSC and the 1992 Manila Declaration. The last sentence of the paragraph contained an oblique reference to the recent development on Mischief Reef: “We call on all parties concerned to exercise restraint and to refrain from taking actions that are inimical to the peace, security and stability of Southeast Asia and the Asia-Pacific region.”78 An explanation for this muted response is the challenges facing the organisation at the time: the integration of Cambodia, Laos, Myanmar and Vietnam into the membership, the financial crisis afflicting the region and China’s valued contribution in addressing it. As the organisation’s Secretary-General Rodolfo Severino noted, “[w]e have bigger problems to deal with, particularly the economy.”79 Although such a remark was not unexpected given the seriousness of the financial crisis, it was nonetheless noteworthy because Severino was the former Philippines Under-Secretary of Foreign Affairs deeply involved in lobbying for ASEAN support when the Mischief Reef dispute first flared in 1995.80 China was also reaping the dividends of its diligent cultivation of neighbouring countries through a “periphery policy” (zhoubian zhengce) that began in the 1980s,81 including a concerted effort since 1991 to engage ASEAN as an organisation82 and its constituent members. By the early 1990s, China had either inaugurated or resumed 77 “Chinese mischief at Reef to IPU”, Manila Standard, 16 April 1999; “Philippines to raise issue of disputed islands at international level”, Philippine Star, 12 April 1999. 78 Association of Southeast Asian Nations, Sixth ASEAN Summit, Ha Noi Declaration of 1998, Ha Noi, Vietnam, 16 December 1998, ASEAN Documents Series 1998-1999, Supplementary Edition, Jakarta, 1999, p. 5. 79 Tiglao, Sherry, Thayer and Vatikiotis, “‘Tis the Season”, p. 18. 80 On Severino’s appreciation of ASEAN’s support for Manila’s position see “Why China is Creating Mischief in the Spratlys”, The Straits Times, 7 April 1995 cited in Storey, “Creeping Assertiveness”, p. 108. 81 The term “periphery policy” and the start date are sourced from Suisheng Zhao, “China’s Periphery Policy and Its Asian Neighbours”, Security Dialogue 30(3), 1999, p. 335. 82 China became a full ASEAN dialogue partner in July 1996 and since 1997 an ASEAN-China Summit has been held annually. On 16 December 1997 the Joint Statement of the Meeting of Heads of State/Government of the Member States of ASEAN and the President of the People’s Republic of China was signed in Kuala Lumpur. The document establishes the strategic framework for relations between the two sides. The Joint Statement is available at < 254 diplomatic relations with all the ASEAN member states.83 This approach provided a foundation for deepening and broadening diplomatic, economic, cultural, scientific and other shared interests. It also meant that individual ASEAN states would consider closely the political and economic costs and benefits to their interests of antagonising China over sensitive issues such as the South China Sea. In an address to the Rotary Club of Manila in April 1999 following a meeting between senior officials of ASEAN and China in Kunming, Philippines Undersecretary of Foreign Affairs Lauro Baja noted: On Mischief Reef, we were left alone. The other countries said that while they sympathize and understand our situation, the issue is only a [bilateral] Philippines-China problem. Even some of our ASEAN friends are either mute, timid, or cannot go beyond espousal of general principles of peaceful settlement of disputes and polite words of understanding given in the corridors of meeting rooms. Understandably, they may have their own agenda to pursue.84 The Philippines’ frustration at being left an “orphan” by ASEAN85 contrasted with the united front that the organisation’s members presented at their April 1995 meeting with Chinese officials in Hangzhou. In Lesek Busynski’s view, ASEAN has been of limited use to Manila in relation to the South China Sea dispute.86 This remark appears apt. Motivating Beijing’s implementation of the periphery policy was a desire for a stable regional environment to support the country’s economic modernisation and 83 The dates on which China established diplomatic relations with ASEAN states are Brunei (1991), Cambodia (1958), Indonesia (1950, suspended in 1967 then resumed in 1990), Laos (1961, interrupted in 1970s-mid 1980s then resumed in 1989), Malaysia (1974), Myanmar (1950), Philippines (1975), Singapore (1990), Thailand (1975) and Vietnam (1950, interrupted in the late 1970s then resumed in 1991). Data from website of Ministry of Foreign Affairs of the People’s Republic of China, < 255 national security goals.87 As Suisheng Zhao notes, the policy has “aimed at exploring the common ground with Asian countries in both [the] economic and security arenas by conveying the image of a responsible power seeking to contribute to stability and cooperation in the region.”88 On the bilateral level, Beijing always held the upper hand over Manila. While Manila proposed three options to defuse the situation -- transfer of the Chinese structures to a location outside the Philippines’ exclusive economic zone (EEZ), retention of the existing structures but disassembly of the new ones and joint development of the area -- Beijing agreed only to study them. Foreign Secretary Domingo Siazon captured the weakness of the Philippines’ position in stating: We asked them [China] to leave Mischief; they said no. We asked them if they’d be willing to have the dispute settled through international arbitration. They said no. We told them if they’d be willing to have a joint development arrangement for Mischief. They said they’ll think about it.89 Meeting in Manila on 22-23 March 1999, and again in October that year, the joint Working Group on Confidence Building Measures made little progress.90 Led by Foreign Affairs Undersecretary Lauro Baja, the Philippines delegation comprised foreign affairs and defence department officials as well as academics. In the March meeting Manila sought the dismantling of the Mischief Reef structures or at least some concession from Beijing, and an explanation of its offer of joint use of the facility.91 Assistant Foreign Minister Wang Yi, head of the Chinese delegation, insisted that evidence supported Beijing’s sovereignty over the reef.92 China refused to dismantle its structures, denied it had ever offered to share use of the facility with the Philippines and 87 Zhao, “China’s Periphery Policy and Its Asian Neighbours”, p. 336. 88 Ibid. 89 Tiglao, Sherry, Thayer and Vatikiotis, “‘Tis the Season”, p. 20. 90 See for example, Frank Ching, “Manila Foiled in Spratly Row”, Far Eastern Economic Review, 8 April 1999, p. 33. 91 “Philippines to press for concessions over Mischief Reef dispute today”, BusinessWorld (Philippines), 22 March 1999. 256 demanded a prohibition on overflight of the feature.93 In addition, China did not agree to stop building more structures on any Philippines-claimed feature and reluctantly conceded that use of the reef’s facilities would be restricted to civilians.94 Beijing’s reticence on the last point was at odds with its repeated assurances that the structures were merely fishermen’s shelters, the entrepreneurial instincts of the People’s Liberation Army (PLA) notwithstanding.95 Unsurprisingly, the delegation leaders had divergent views about the meeting outcome: Wang Yi pronounced the meeting “very successful” while Lauro Baja commented “[w]e are not deliriously happy.”96 The disappointing outcome of the meeting from Manila’s perspective contributed to the deferment of a planned trip to Beijing by President Estrada.97 It did not, however, inhibit Estrada suggesting in a May 1999 speech to the Pacific Basin Economic Council meeting in Hong Kong that China is the biggest threat to southeast Asia’s security because of its actions in the Spratlys.98 In the following months Beijing launched several bridge-building efforts. It offered to shelve the sovereignty question and to undertake joint exploration and development of the Spratlys’ resources, a proposal made initially by Deng Xiaoping in 1989 during President Aquino’s visit to Beijing and repeated subsequently by Jiang Zemin in November 1996 when he travelled to the Philippines.99 As Baviera and Batongbacal note, however, any proposal for bilateral co-operation on resource development in the Spratlys quickly confronts the problem of third party opposition 92 “Spratly Islands talks open”, BBC World Service, 22 March 1999. 93 Zha and Valencia, “Mischief Reef: Geopolitics and Implications”, p. 89; Nirmal Ghosh, “No gain for the Philippines in Spratly talks”, The Straits Times, 24 March 1999. 94 Zha and Valencia, “Mischief Reef: Geopolitics and Implications”, p. 89. 95 On the commercial activities of the PLA see for example James C. Mulvenon, Soldiers of Fortune: The Rise and Fall of the Chinese Military Business Complex, 1978-1998; M.E. Sharpe, Armonk, 2000. 96 Ghosh, , “No gain for the Philippines in Spratly talks”. 97 Luz Baguioro, “Estrada delays Beijing trip over Mischief Reef spat”, The Straits Times, 1 April 1999. 98 “Beijing is biggest security threat in region: Estrada”, The Straits Times, 19 May 1999. 99 Mario B. Casayuran, “Joint dev’t proposed by China”, Manila Bulletin, 31 March 1999; “Beijing now dangles joint exploration in Spratlys”, BusinessWorld (Philippines), 31 March 1999; Ministry of Foreign Affairs of the People’s Republic of China, “China and the Philippines”, < 257 from the other claimants.100 In June 1999, China’s Ambassador to the Philippines, Ms. Fu Ying, reportedly assured Philippine Foreign Secretary Siazon that China would not build any new structures on disputed features in the South China Sea. Philippines Defence Secretary Mercado was unconvinced about the sincerity of this statement.101 Then in July China and the Philippines agreed to launch a joint commission on fisheries research and marine environmental protection in their commonly claimed area in the Spratlys.102 The hope, according to Philippines Agriculture Secretary Edgardo Angara, was that by conducting joint research the Spratly’s problem could be placed in the broader context of their bilateral relationship.103 During 2000 and 2001 tension between China and the Philippines over their claims to Scarborough Shoal overshadowed the Mischief Reef dispute.104 In May 2000 President Estrada made his long-delayed visit to Beijing, receiving a consistent message from China’s top leadership of Jiang Zemin, Li Peng and Zhu Rongji: China does not pose a threat to the Philippines, the South China Sea dispute should be resolved through consultation and negotiation according to international law and the LOSC, there would be no action to complicate or escalate the dispute and the dispute should not overshadow the further development of bilateral relations.105 The centerpiece of the visit was the signing on 16 May by the foreign minister of each country of the Joint Statement between the Government of the People’s Republic of China and the Government of the 100 Aileen S.P. Baviera and Jay L. Batongbacal, “When Will Conditions be Ripe? Prospects for Joint Development in the South China Sea”, Paper presented to the 13th Asia-Pacific Roundtable, Kuala Lumpur, 31 May-2 June 1999, p. 5. 101 “We can’t trust China – DND”, BusinessWorld (Philippines), 30 June 1999; “Philippines says China to stop Spratlys construction activity”, Agence France-Presse, 29 June 1999. 102 “Philippines, China to research jointly in Spratlys”, Japan Economic Newswire, 12 July 1999. 103 Ibid. 104 See for example, Zha and Valencia, “Mischief Reef: Geopolitics and Implications”, pp. 90-91; “Tito: No Chinese Warships in Spratlys”, Manila Standard, 29 June 2001; Bill Gertz, “Chinese Warships Anger Philippines”, The Washington Times, 26 June 2001; “China Denies its Warships off Spratlys”, BBC World Service, 26 June 2001; Bill Gertz, “China Deploys Warships”, The Washington Times, 25 June 2001;“Navy says PRC, SRV Boats Intruded into Philippines-controlled Waters in Spratlys”, Philippine Daily Inquirer, 23 April 2001; Michael Dwyer, “Tensions Soar over Disputed Spratly Isles”, Australian Financial Review, 8 February 2000. 105 “Philippines, China agree to peaceful resolution of dispute”, Asia Pulse, 18 May 2000; Xiao Shao and Gao Wei, “China, Philippines vow regional stability”, China Daily, 18 May 2000; “Presidents call for negotiations”, China Daily, 17 May 2000. 258 Republic of the Philippines on the Framework of Bilateral Cooperation in the Twenty- First Century.106 Comprising 14 substantive paragraphs, in relation to the South China Sea dispute the statement not only reaffirmed the above sentiments but also the commitment of both sides to adhere to their 1995 bilateral code of conduct.107 This was somewhat paradoxical on China’s part given its non-complying actions in Mischief Reef. Both sides also agreed to work constructively on the development and adoption of a regional code of conduct.108 Following the installation of Gloria Macapagal-Arroyo as Philippines President in January 2001, National Security Advisor Roilo Golez signaled the launching of a new diplomatic effort to get China to dismantle its structures on Mischief Reef.109 Golez noted that although the Arroyo administration would respect the joint statement concluded with China by the previous government, an international rather than bilateral strategy to promote the Philippines’ position would now prevail.110 In his view, “[w]e should use multilateral forum [sic] to tell the world what China is doing. Our strongest weapon against a big nation like China is noise.”111 This echoed his President’s sentiments: “We intend to protect our territorial integrity and we consider portions of the Spratlys as part of the Philippines, and our main weapon here is the diplomatic route.”112 The Arroyo administration stressed it favoured co-operation over confrontation in dealing with the Spratlys dispute.113 In this spirit the President sought to downplay the seriousness of the dispute, referring to it as “one irritant in a sea of excellent relations”114 106 Joint Statement available at < 259 between Manila and Beijing that should not spoil their shared interests.115 Nesting the Spratlys dispute within the wider context of Philippines-China relations merely revalidated the reality of Manila’s weak position vis-à-vis China, however. It did not represent a substantive break with the previous administration’s policy. More broadly, the President was mindful of the importance of sustaining and indeed deepening trade and investment relations with a China on the cusp of entry to the World Trade Organisation, remarking that “[a]t no time in our history has our relationship with China been so important.”116 Meeting on 3-4 April 2001 the joint Working Group on Confidence Building Measures discussed both the Mischief Reef and Scarborough Shoal disputes. The delegations were led by Mr. Willy Gaa, Philippines Foreign Affairs Assistant Secretary and Ms. Fu Ying, Director-General of the Department of Asian Affairs in China’s Ministry of Foreign Affairs (and immediate past Ambassador to the Philippines). A key issue for Manila was the status of the “fishing shelters” on the reef, in particular whether Beijing judged that the time was right for their co-use.117 Consensus was reached on ten points.118 First, recognition of the importance of preserving marine species and habitats. There was, however, no agreement on specific measures to be implemented, such as a moratorium on fishing. Second, the establishment of direct lines of communication between the fisheries departments of both countries. Third, examination of a mechanism for settling fishery disputes using the framework of the joint Working Group on Confidence-Building Measures. Fourth, an early launch of meetings of the expert groups on fisheries co-operation and marine environmental protection. Fifth, further discussion of proposed co-operative projects on red tide analysis, capacity to undertake marine environmental protection studies and prediction of tsunami events. Sixth, expansion of 115 Ibid.; “Spratlys Issue should not Damage China-Philippines Ties: Arroyo”; “Manila to promote cooperation in the Spratlys”. 116 “Macapagal downplays Spratlys row ahead of visit to China”, Agence France-Presse, 29 October 2001. 117 Jim Gomez, “China, Philippines discuss South China Sea territorial claims”, Associated Press, 3 April 2001; Jennee G.U. Rubrico, “RP, China delegations start talks on claims over Spratlys; drug issue ‘conflicting opinion’”, BusinessWorld (Philippines), 2 April 2001; Rocky Nazareno, “RP to revive claim over Mischief Reef”, Philippine Daily Inquirer, 2 April 2001. 118 “China, Philippines reach Consensus on Confidence-Building Measures”, Xinhua, 4 April 2001. 260 bilateral military dialogue and co-operation, including exchange visits by senior defence and military officials. Seventh, an invitation for a port call by a Philippines naval vessel at a mutually convenient time to reciprocate previous visits by Chinese ships. Eighth, in the interests of maintaining regional peace and stability any actions or statements that might complicate or escalate the situation in the South China Sea should be avoided. Ninth, implementation of confidence building measures previously agreed: exchanges and information sharing on rescue operations, disaster relief and engineering technology as well as marine navigational safety. Finally, both sides agreed to strengthen their co- operation in the development and adoption of a regional code of conduct. Commendable though these points of agreement were, more telling was the silence about when China would grant joint use of the Mischief Reef facility. No breakthrough on either the dismantlement of China’s structures on Mischief Reef or shared use of the facility was achieved during President Arroyo’s visit to Beijing in October 2001. China reiterated its offer of joint development and both sides committed themselves to maintain peace and stability in the South China Sea as well as continuing their efforts to finalise a regional code of conduct.119 Projecting a desire to go beyond rhetoric, President Arroyo identified two areas for possible co-operation: marine environmental protection and oil exploration.120 To date, however, neither proposal has progressed. During 2002 no major developments occurred concerning Mischief Reef, despite an expectation that President Arroyo would raise the issue during Li Peng’s visit to Manila in mid-September. She chose not to. The Philippines military remained concerned about China’s parallel approach of diplomacy and unilateral action to reinforce its presence on occupied features. In particular, it reported a series of worrying developments, including the May 2000 establishment of the South Sea Marine 119 “President cites gains of state”, BusinessWorld (Philippines), 2 November 2001; “Philippines elated by new deals with China”, Manila Standard, 1 November 2001; Hu Qihua, “Sino-Filipino Ties to Intensify”, China Daily, 31 October 2001. 120 Marichu Villanueva, “Philippines, China agree to identify projects for joint development of Spratlys”, Philippine Star, 2 November 2001. 261 Surveillance Force to replace the South Sea Division of the China Marine Surveillance Force, with responsibility to protect Beijing’s rights and identify marine resources in the South China Sea; the imminent deployment of 20-24 new patrol boats vessels that could be used to bolster operations in the Sea; the staging of large-scale military exercises in 2001 in an area between Hainan Island and the Paracels; and an increase in Chinese intrusions in the vicinity of Scarborough Shoal.121 Having consolidated its presence on Mischief Reef and with minimal prospect of eviction, Beijing had no need to be proactive towards Manila in 2001-2002. Deflecting the Philippines’ request for joint use of the Mischief Reef facility was the only issue on which Beijing needed to focus; it was never going to accede to Manila’s demand to dismantle the structures. Beijing controlled discussion on the joint use issue with ease, frustrating Manila by claiming the time was not yet ripe to proceed. The signing of the Declaration on the Conduct of Parties in the South China Sea on 4 November 2002 in Phnom Penn was hailed as a breakthrough in the dispute (see Chapter 7). Despite Manila’s satisfaction with this outcome,122 Foreign Affairs Undersecretary Lauro Baja acknowledged that dealing with existing structures, such as in Mischief Reef, would require a separate agreement.123 In 2002 China had little reason to antagonise regional or extra-regional states with an interest in the Mischief Reef dispute. While advancement of Beijing’s security, economic and political interests in support of the country’s modernisation remains an abiding foreign policy goal,124 in 2002 several factors favoured a moderate, non- 121 “China said fortifying claims in South China Sea”, Associated Press, 17 July 2002; “China Denies Report It’s Bolstering S. China Sea Claims”, Associated Press, 17 July 2002; Dario Agnote, “China continues to fortify claims in disputed Spratlys”, Kyodo News, 12 July 2002. 122 “RP-initiated code on Spratlys signed”, Manila Standard, 5 November 2002; Jim Gomez, “Arroyo says accord on South China Sea eases danger of armed clashes”, Associated Press, 5 November 2002; Dona Pazzibugan, “Spratly pact hailed as RP success”, Philippine Daily Inquirer, 4 November 2002. 123 Leotes Marie T. Lugo, “Chinese structures to remain despite code of conduct deal”, BusinessWorld (Philippines), 6 November 2002. 124 See for example, Michael D. Swaine, The Role of the Chinese Military in National Security Policymaking, Revised Edition, RAND, Santa Monica, 1998, p. 20. He notes that China’s foreign policy focus “has been largely cautious and pragmatic” (emphasis in original) and involves multiple elements spanning diplomatic, political, economic and comprehensive security dimensions. 262 controversial stance in international affairs.125 Chief among them appeared to be Washington’s unrivalled power in international affairs and concern about the opportunity cost to China if relations with the US became tense.126 Other considerations also played a role. Co-operation with the US on the war on terrorism re-energised relations with Washington in the wake of the fallout from the April 2001 collision between an American and a Chinese military aircraft over the South China Sea. The newfound warmth between the two sides was given impetus by Jiang’s October visit to the US, culminating in an informal “barbecue summit” with President George W. Bush at his ranch in Crawford, Texas.127 At the same time, America’s establishment of air bases, use of airspace and stationing of troops in a training role in several central Asian countries as part of the war on terrorism generated mixed feelings in Beijing (and Moscow).128 Similarly, Russia’s tilt towards the west through stronger ties to the North Atlantic Treaty Organisation (NATO) and the US required careful handling, especially in relation to the implications for the Beijing-sponsored initiative of the Shanghai Co- operation Organisation.129 On the economic front an agreement to establish a China- ASEAN free trade area was in the offing, and its endorsement at the ASEAN-China Summit Meeting in November vindicated Beijing’s decision to initiate the proposal. In addition, domestic politics concentrated the leadership’s attention in 2002. This centred on the Sixteenth Party Congress in November in which power was formally transferred from the third generation group under Jiang Zemin to the fourth under Hu Jintao. 125 See for example, Dali L. Yang, “China in 2002. Leadership Transition and the Political Economy of Governance”, Asian Survey XLIII(1), 2003, pp. 25-40. 126 Susan V. Lawrence and Murray Hiebert, “Bending in the U.S. Storm”, Far Eastern Economic Review, 24 October 2002, pp. 33. 127 Zhu Feng, “Crawford Summit Ushers in a New Stage in Sino-U.S. Ties”, Beijing Review, 14 November 2002, pp. 8-10. Jiang was only the fourth head of state to be invited to Bush’s ranch at Crawford: see Susan V. Lawrence, “The Best Little Ranch in Texas for a Chinese Visitor”, Far Eastern Economic Review, 24 October 2002, p. 34. 128 See for example, Ahmed Rashid, “Trouble Ahead”, Far Eastern Economic Review, 9 May 2002, p. 16; Charles Hutzler, “Is Central Asia Big Enough for U.S., China? China Worries that a Rise in U.S. Influence There Could Harm its Interests”, The Wall Street Journal, 24 September 2001, p. 19. 129 See for example, Yu Bin, “Beautiful Relationship in a Dangerous World”, Comparative Connections, 2nd Quarter 2002: China-Russia Relations, < 263 6.2 Identifying the Decision Unit Our attention now turns to determining the decision unit in Beijing and Manila on the Mischief Reef issue. China Foreign policy decision-making in China has undergone a transition from limited participation by the top leadership in the first years after the formation of the People’s Republic to a “strong-man” model centred on Mao Zedong during the mid-late 1950s and until his death in 1976 followed by a more complex, contested approach under Deng Xiaoping “characterized by bureaucratic, sectorial and regional competition.”130 Indeed: As the Long March generation passes from the scene, the new generation of political leaders lacks both authority and charisma to dominate foreign policy decisionmaking. Foreign affairs bureaucracies have become increasingly influential. At the same time, in the process of decentralization and opening to the outside world, new actors like the defense industry, the People’s Liberation Army (PLA), and provincial authorities, which had previously played little role in foreign policy decisionmaking, have now gained a stronger voice in foreign affairs.”131 This shift deepened during Jiang Zemin’s stewardship as political leadership passed “from a generation of revolutionary politicians to a generation of technocrat politicians.”132 A manifestation of this is the shift from ideology to pragmatism in China’s foreign relations in the post-Cold War era. 130 Lu Ning, The Dynamics of Foreign-Policy Decisionmaking in China, Westview Press, Boulder and Oxford, 1997, pp. 2-3. 131 Ibid., p. 3. 132 Ibid., p. 162. 264 By mid-late 1994 when China’s construction activity on Mischief Reef occurred,133 the formal transition from the Deng to the Jiang era was concluding. As leader-designate, Jiang had the power and authority to commit or withhold the nation’s resources regarding the emerging dispute with the Philippines over the reef. It is unclear whether he established a general policy direction or took an active part in the decision process. One argument is that low ranking PLA officers carried out the operation without the consent of senior military personnel,134 or indeed the political leadership. Undermining this possibility is the logistical requirements to undertake construction so far from the Chinese mainland135 and the inevitable attention the action would attract from governments within and beyond Southeast Asia and by the international media. An alternative proposition is that senior PLA officers approved the operation and Jiang did not oppose it because of a need to strengthen his support by the military and conservative factions within the party.136 Analysis suggests the latter view is more persuasive. While the September 1994 Communist Party plenum formally marked the start of the post-Deng era,137 any claim by Jiang as paramount leader was premature. His support by the military was uncertain, his edge over rivals to succeed Deng was thin and his longevity as leader independent of the patriarch’s patronage was questionable. As Gilley notes, “Jiang was not and could not afford to be as authoritarian as Mao, or even as Deng.”138 Moreover, in meetings of the Politburo Standing Committee Jiang reportedly stated: “We are a working collective. As a leader of this working committee I have only one vote, with no special powers.”139 Frederick Tiewes suggests that while Jiang liked to refer to himself as “chief engineer”, the title “CEO” – the manager with 133 Ian Storey suggests the structures were built between June and December 1994. Storey, “Creeping Assertiveness”, p. 110. 134 Ibid., p. 100. 135 Ibid. 136 Ibid., pp. 100-01. 137 Bruce Gilley, Tiger on the Brink. Jiang Zemin and China’s New Elite, University of California Press, Berkeley and Los Angeles, 1998, pp. 227-29. 138 Ibid., p. 231. 139 Jing bao, March 1997, p. 25 cited in ibid. 265 overall responsibility for a vast enterprise” was more appropriate.140 In this vein, and in contrast to a dominating or charismatic leadership style, Jiang emphasised consensus building and reaching out to different constituencies.141 These considerations, viewed together, militate against identifying Jiang alone as the decision unit on Mischief Reef in 1995. Our attention turns, then, to consider whether the unit was multiple autonomous actors or a single group. The Mischief Reef issue does not fall within the domain of a dominant policy group. Rather, several groups have an interest. They include the Politburo Standing Committee, the Foreign Affairs Leading Small Group of the Chinese Communist Party Central Committee, the Ministry of Foreign Affairs (MFA) and the PLA. Formally, the Politburo Standing Committee has the authority to commit or withhold national resources in the area of foreign policy.142 Its membership includes the Chairman of the Chinese Communist Party, the Chairman of the Central Military Commission, the State President, the Chairman of the Standing Committee of the National People’s Congress and the Chairman of the Chinese People’s Consultative Conference.143 Comprising the core of the regime’s leadership, a decision to occupy and subsequently reinforce Mischief Reef would face little prospect of challenge by outside opposition.144 Reinforcing this was the presence in the Standing Committee between 1992 and 1997 of a senior and respected representative of the PLA, General Liu 140 Frederick C. Teiwes, “Politics at the “Core”: The Political Circumstances of Mao Zedong, Deng Xiaoping and Jiang Zemin”, China Information XV(1), 2001, p. 44. Teiwes notes that during Jiang’s time as mayor of Shanghai some residents gave him a less flattering label: “flowerpot” - decorative but ineffectual. Ibid., p. 45. 141 Remarks on Jiang’s consensual style of leadership are found in ibid., p. 63 and You Ji, “Jiang Zemin’s Command of the Military”, The China Journal 45, 2001, p. 138. Ji suggests on that page that Jiang’s lack of charisma was his major asset in an administration characterised by collective leadership, consensus and compromise. 142 Swaine, The Role of the Chinese Military in National Security Policymaking, p. 22. 143 Lu, The Dynamics of Foreign-Policy Decisionmaking in China, p. 9. 144 Although as Swaine notes, internal opposition could result in the amendment or reversal of a foreign policy decision. He goes on to state that according to his sources this has not yet occurred. See footnote 6 in Swaine, The Role of the Chinese Military in National Security Policymaking, p. 22. 266 Huaqing.145 However, not all members of the committee have influence over foreign policy. Rather, one person in the Standing Committee is usually assigned responsibility for the issue area.146 Until early 1998 this was Li Peng. Nonetheless, consultation with Jiang on certain issues was likely “to strengthen party control and coordination within the subarena and between the foreign policy, defense policy, and broader national strategic objectives subarenas.”147 Mischief Reef is a candidate issue for this type of consultation because of its sensitivity as a challenge to China’s territorial integrity, the strategic implications for relations with ASEAN and the potential fallout affecting trade and foreign investment inflows that underpin the country’s economic modernisation goal. The timing of China’s actions in Mischief Reef in 1995 and 1998 also suggest that other factors had an influence: leadership transition politics in the first case, and opportunism in the second whilst ASEAN was pre-occupied with responding to the regional financial crisis The Foreign Affairs Leading Small Group “functions as the key policy coordination, communication, supervision, and consultation mechanism between the PBSC [Politburo Standing Committee] and the foreign affairs system (xitong) of associated state and party organs at the commission and ministry levels.”148 By convention, the head of the Foreign Affairs Leading Small Group acts as the foreign policy co-ordinator in the leadership ranks.149 The Group acts as a pivot transmitting decisions downwards to the competent agencies for implementation and the elevation of key issues and information for deliberation by the Politburo Standing Committee.150 In this way, the group’s functions cut across government and party lines.151 For example, the Ministry of Foreign Affairs (MFA) reports to the head of the Foreign Affairs 145 Liu was a former navy commander and military strategist. He became a member of the Politburo Standing Committee at the Fourteenth Chinese Communist Party Congress in 1992 and retired at the Fifteenth Party Congress in 1997. 146 Swaine, The Role of the Chinese Military in National Security Policymaking, p. 22. 147 Ibid., p. 29. 148 Ibid., p. 24. There Swaine defines xitongs as “groupings of functionally related bureaucracies that deal with a broad policy area of critical importance to the senior party leadership. A leading small group usually exists for each xitong.” 149 Lu, The Dynamics of Foreign-Policy Decisionmaking in China, p. 25. 150 Ibid. 267 Leading Small Group who in turn reports to the Politiburo Standing Committee.152 Until 1998 when the task was transferred to the foreign affairs ministry, the Foreign Affairs Office of the State Council undertook many of the tasks to ensure this arrangement operated smoothly; indeed its influence in foreign policy making may in instances have rivalled that of the foreign minister.153 Li Peng, ranked second in the Politburo Standing Committee, headed the group between 1988 and March 1998. Jiang Zemin succeeded him as the group’s chair, the first time a paramount leader had done so.154 He now controlled the party, state, military and the foreign policy making apparatus. The Ministry of Foreign Affairs is responsible for implementing China’s foreign policy and representing the government in international affairs. Its influence relates to three areas. First, giving substance to framework foreign policy decisions made by the political leadership.155 Second, the development of internal policies to manage and control sensitive issues or relations with certain countries.156 And third, as information provider to the political leadership.157 Although much of the MFA’s analysis is a synthesis of material received from its missions abroad and its internal research, its sources are considered reliable. These considerations give weight to the ministry’s reports and briefings to the top leadership, such that “the MFA’s policy recommendations and opinions in a majority of cases prevail over those of other bureaucratic institutions in the battles for the hearts and minds of the central leadership.”158 The power base of senior departmental officials lies within the foreign policy community rather than extending horizontally to include other ministries.159 This 151 Ibid. 152 Ibid., p. 20 153 Ibid., pp. 25-26. In 1998 the Foreign Affairs Office of the State Council was abolished as part of a restructuring of the bureaucracy: see Stuart Harris, Globalisation and China’s diplomacy: Structure and process, Working Paper 2002/9, Department of International Relations, Research School of Pacific and Asian Studies, Australian National University, Canberra, 2002, p. 9. 154 Ibid., p. 8. 155 Lu, The Dynamics of Foreign-Policy Decisionmaking in China, p. 108. 156 Ibid., pp. 111-12. 157 Ibid., p. 117. 158 Ibid. 159 George Yang, “Mechanisms of Foreign Policy-making and Implementation in the Ministry of Foreign Affairs” in Carol Lee Hamrin and Suisheng Zhao (eds), Decision-Making in Deng’s China. Perspectives from Insiders, M.E. Sharpe, Armonk and London, 1995, p. 93. 268 reflects the fact that senior foreign ministry post holders tend to be from in-house160 rather than parachuted in from elsewhere in the bureaucracy. Reinforcing this vertical integration is the convention that the retired foreign minister is promoted to the Politburo and assumes the position of vice-premier with responsibility for foreign affairs.161 This was the case with Qian Qichen: foreign minister from 1988 to 1998162 before becoming deputy to Jiang Zemin in the Foreign Affairs Leading Small Group after 1998.163 Neither the Foreign Affairs Leading Small Group nor the MFA has the ultimate power and authority to commit the regime’s resources in relation to South China Sea issues. On most foreign policy matters both are subordinate to the Politburo Standing Committee. George Yang notes, for example, that “[i]f the issue is of a routine or less important nature that is in the competence of the Foreign Ministry to ratify, the proposal enters the implementation stage when the green light is turned on by the minister. Otherwise, it travels to the top leadership for final decision.”164 Given the sensitivity in southeast Asia and beyond to China’s actions in the South China Sea, especially for adherents of the China-threat argument, it seems unlikely that subordinate groups in Beijing’s foreign policy community would take the final decision to occupy a feature so close to the Philippines. In particular, by taking such action it should have been predictable to Chinese foreign policy analysts that not only would Manila seek to involve the US by invoking their 1951 Mutual Defence Treaty but also it would attempt to garner ASEAN’s support. The PLA’s role in foreign policy-making is neither pivotal nor insignificant.165 Arguably, its influence in the foreign policy decision-making process peaked in the 160 Ibid. 161 Ibid. 162 “Qian Qichen”, < 269 Deng-Jiang leadership transition period of the mid-1990s.166 Several avenues exist for the PLA to inject its perspectives into the foreign policy making process: through representation in the Foreign Affairs Leading Small Group, by access to key members of the Politburo including the top leadership and military representatives, through the Party’s Central Committee General Office and through informal consultations with members of the Politburo Standing Committee.167 Like the Ministry of Foreign Affairs, it is both a contributor to and implementer of foreign policy. As noted in Chapter 5, the mission of the People’s Liberation Army (PLA) as enunciated in the Political Report of the Fourteenth Party Congress held in 1992 included protection of territorial integrity.168 This provided a mandate for the military, especially the navy, to push for a more assertive approach in the Spratlys. In this context, Mischief Reef provided an opportunity for the PLA Navy (PLAN) to advance several of its interests. In addition to an increased budget allocation, these included enhancing its standing within the armed forces in line with a maritime-oriented doctrine and accelerating modernisation to enable it to play its role in fighting limited, high technology wars on China’s periphery. Recent purchases of advanced air and naval assets, summarised in Chapter 5, reflect this latter goal. While the period between 1994 and 1996 was characterised by leadership transition politics preceding Deng’s death, by 1997 Jiang had consolidated his grip as the core of the third generation leadership.169 The passing of Deng in February 1997 did not provoke any opportunism by political or military elites nor did it unearth new threats 166 Lu, The Dynamics of Foreign-Policy Decisionmaking in China, p. 3 and p. 165; John W. Garver, “The PLA as an Interest Group in Chinese Foreign Policy” in C. Dennison Lane, Mark Weisenbloom and Dimon Liu (eds), Chinese Military Modernization, Kegan Paul International, London and New York, 1996, pp. 246-81; Ellis Joffe, “How much does the PLA make foreign policy?” in David S.G. Goodman and Gerald Segal (eds), China Rising. Nationalism and Interdependence, Routledge, London and New York, 1997, pp. 54-57. 167 Swaine, The Role of the Chinese Military in National Security Policymaking, pp. 31-33. 168 Willy Wo-Lap Lam, China after Deng Xiaoping. The Power Struggle in Beijing Since Tiananmen, John Wiley and Sons, Singapore, 1995, p. 196. 169 Gilley, Tiger on the Brink, p. 295. 270 to Jiang’s leadership.170 While continuing with Deng’s economic policies, Jiang placed “renewed emphasis on fighting corruption, stoking patriotism, permitting shareholding as a form of public ownership, and strengthening the political system.”171 By the Fifteenth Party Congress in September 1997, Jiang was fully in command of the party and the military. As Gilley notes, “Jiang’s task now was not so much to accumulate authority as to preserve it.”172 His allies Wei Jianxing and Li Lanqing were appointed to the Politburo Standing Committee while others such as Zeng Qinghong were promoted to the senior ranks of the party.173 Liu Huaqing, the mentor that Deng had recalled from retirement in 1989 to sponsor Jiang’s acceptance by the military, retired from the Politburo Standing Committee at the congress. This left the military unrepresented on this body for the first time since 1949. As Ellis Joffe notes, however, this was not entirely correct. By virtue of his role as chairman of the Central Military Commission Jiang Zemin was in fact the military’s delegate and expected not to support in the Politburo Standing Committee the PLA’s views reached earlier in the Central Military Commission setting.174 At the congress Jiang declared that the PLA would to be reduced by 500,000 personnel by the year 2000, leaving an armed force of 2.5 million.175 This announcement was interpreted as symbolising his firm control over the military.176 Reinforcing this was his 1998 instruction that the PLA was to divest itself of its business interests. The analysis suggests that multiple autonomous actors comprised the decision unit in relation to Mischief Reef. Its constituents were Jiang, the Politburo Standing 170 The day after Deng’s memorial service the armed forces swore their allegiance to Jiang. Gilley argues that an indicator of the lack of political threats to Jiang’s position was the quick return by senior politicians to their duties. Ibid., pp. 295-96. 171 Ibid., p. 298. 172 Ibid., p. 309. 173 Ibid., pp. 307-08. At the Sixteenth Party Congress in November 2002 Zeng was promoted to the Politburo Standing Committee, ranking fifth among the nine member group, and at the tenth National People’s Congress in March 2003 he was appointed state vice-president. 174 Ellis Joffe, “The People’s Liberation Army and Politics: After the Fifteenth Party Congress” in Hung- Mao Tien and Yun-Han Chu (eds), China under Jiang Zemin, Lynne Rienner Publishers, Boulder and London, 2000, p. 107. 175 Gilley, Tiger on the Brink, p. 310. 271 Committee and the PLA. These actors did not combine into a single decision unit. Rather, the support of each was required before regime resources could be applied to Mischief Reef. It is suggested, however, that between the first and second Mischief Reef episodes the relative influence of decision unit members changed. In 1995, the military was the pivotal member. Jiang needed its support in the context of succession politics in train at the time. This related not only to the possibility that the military might see its interests better met in aligning with Jiang’s rivals, Li Peng, Qiao Shi or Li Ruihuan, but also to his lack of experience in the military, notwithstanding the assiduous efforts he and Deng made to cultivate support there.177 As one commentator notes: [a]s with his support in the party, Jiang’s support in the army derived from the fact that his policies largely jibed with the interests and desires of those with the potential to oppose his authority. Depoliticizing the senior ranks and improving discipline and living conditions in the lower ranks were the common aspiration of PLA professionals determined to bring the army into the twenty-first century. As with the party, Jiang could depend on the support of the army so long as he did not veer from this mainstream opinion.178 While in theory Jiang and the Politburo Standing Committee had the authority to make decisions committing state resources to Mischief Reef, in practice the PLA’s support of the project was vital. The problem for Jiang was that while he could claim to be commander-in-chief of the military this did not necessarily translate into real, as opposed to titular, control over it.179 For example, in relation to the 1995-96 Taiwan 176 Ibid. 177 See ibid., pp. 164-67 and pp. 226-27. 178 Ibid., p. 227. 179 For example, Andrew Nathan and Robert Ross question “whether Jiang, despite his formal authority, has been able to exercise full authority over senior military officers.” David Shambaugh, too, is doubtful whether Jiang controlled the military, or vice-versa. Shambaugh notes “While the PLA pays frequent homage to Jiang as commander-in-chief, it may be that the armed forces are saluting his office more than him. Jiang’s ‘control’ of the PLA may be more apparent than real.” Andrew J. Nathan and Robert S. Ross, The Great Wall and the Empty Fortress. China’s Search for Security, W.W. Norton and Company, New York and London, 1997, p. 141; David Shambaugh, “China’s Commander-in-Chief: Jiang Zemin and the 272 Straits crisis several commentators suggest Jiang followed the military rather than led it.180 This provides a clue as to why Jiang might have given tacit approval for an operation in Mischief Reef in 1995: opposing the military so soon after the culmination of his efforts to build support and loyalty within its ranks181 and the emerging Taiwan crisis would have been risky for his hold on the leadership position. The ebbing of Deng’s informal influence on the military as his health continued to fade reinforced this risk. In return for the military’s support Jiang had to deliver to it an increased budgetary allocation for modernisation and accommodate its stronger voice in foreign policy issues.182 Jiang’s position was that budget increases for the military should parallel the economy’s growth.183 This was an ambitious target. The average annual growth of China’s GDP between 1990 and 1999 was 10.7 per cent.184 By contrast, China’s reported defence expenditure185 peaked at 5.9 per cent of GDP in 1995 then PLA” in C. Dennison Lane, Mark Weisenbloom and Dimon Liu (eds), Chinese Military Modernization, Kegan Paul International, London and New York, 1996, p. 210. 180 Ibid.; Gilley, Tiger on the Brink, pp. 257-58; Jianhai Bi, “The Role of the Military in the PRC Taiwan Policymaking: a case study of the Taiwan Strait crisis of 1995-1996”, Journal of Contemporary China 11(32), 2002, pp. 558-61. 181 On Jiang’s efforts to build support within the PLA see for example, Shambaugh, “China’s Commander-in-Chief”, pp. 211-36; Ji, “Jiang Zemin’s Command of the Military”, pp. 131-137. 182 Ibid., pp. 232-34 and pp. 234-36; Bi, “The Role of the Military in the PRC Taiwan Policymaking”, p. 558. 183 You Ji, “Making Sense of War Games in the Taiwan Strait”, Journal of Contemporary China 6(15), 1997, p. 298. 184 World Bank, World Development Indicators 2001, Oxford University Press, New York and Oxford, 2001, p. 194. 185 Considerable uncertainty attaches to China’s reported figures. Their reliability is questionable because items are either unlisted or embedded within so-called non-defence related expenditure. See for example, Department of Defense, United States, Annual Report on the Military Power of the People’s Republic of China, Washington D.C., 2003, pp. 41-42, < 273 hovered between 5.3 and 5.4 per cent in the last years of the 1990s.186 The main beneficiary of defence budget allocations in the 1990s was the navy.187 Jiang’s dependence on the military’s support had lessened by 1997. The Party’s control over the military was formalised through enactment of the National Defence Law that year.188 Managed appointments and retirements of military personnel reinforced Jiang’s control. At the Fifteenth Party Congress Defence Minister Chi Haotian and Vice Chairman of the Military Affairs Commission Zhang Wannian were appointed to the Politburo. General Liu Huaqing retired from the Politburo Standing Committee and was not replaced. 186 Figures for the decade reported in successive editions of The Military Balance produced by the International Institute for Strategic Studies were: Year Defence expenditure (% of GDP) 1990 1.7 (Mil. Bal. 1991-1992); 3.1 (Mil. Bal. 1992- 1993) 1991 3.2 (Mil. Bal. 1992-1993); 5.1 (Mil. Bal. 1993- 1994) 1992 5.0 1993 5.4 1994 5.6 1995 5.7 (Mil. Bal. 1996/97); 5.9 (Mil. Bal. 1997/98) 1996 5.7 1997 5.7 1998 5.3 1999 5.4 For 1990, 1991 and 1995, figures provided in successive editions of The Military Balance differ. Figures in table sourced from International Institute for Strategic Studies, The Military Balance 1991-1992, Brasseys, London, 1991, p. 214; International Institute for Strategic Studies, The Military Balance 1992- 1993, Brasseys, London, 1992, p. 220; International Institute for Strategic Studies, The Military Balance 1993-1994, Brasseys, London, 1993, p. 226; International Institute for Strategic Studies, The Military Balance 1995-1996, Oxford University Press, Oxford, 1995, p. 266; International Institute for Strategic Studies, The Military Balance 1996/97, Oxford University Press, Oxford, 1996, p. 308; International Institute for Strategic Studies, The Military Balance 1997/98, Oxford University Press, Oxford, 1997, p. 295; International Institute for Strategic Studies, The Military Balance 1998/99, Oxford University Press, Oxford, 1998, p. 297; International Institute for Strategic Studies, The Military Balance 1999·2000, Oxford University Press, Oxford, 1999, p. 302; International Institute for Strategic Studies, The Military Balance 2000•2001, Oxford University Press, Oxford, 1999, p. 299. 187 Lam, China after Deng Xiaoping, p. 200. See also Michael Leifer, “Chinese Economic Reform and Security Policy: The South China Sea Connection”, Survival 37(2), 1995, pp.44-59. 274 By the time of the second Mischief Reef episode in October 1998, succession politics had abated. Jiang’s triumph over his rivals to succeed Deng was complete, and he was recognised internally and externally as undisputed leader. His support in the military was firm following the appointment of loyalists to the senior ranks of the Central Military Commission. As noted earlier, in March that year Jiang had succeeded Li Peng as chair of the Foreign Affairs Leading Small Group. Compared to 1995, in the second Mischief Reef period Jiang was now the pivotal member of the decision unit. One defence China invoked concerning the 1998 construction on Mischief Reef was that it was an action authorised by local authorities and not the central government. It is unclear why a local government would wish to upgrade the “fishermen’s shelter” by constructing a helipad and three-storey brick building with sophisticated communications equipment. In relation to its purported function, the scale of the facility is over-sized. The economic rationality of approving the construction is another factor. In particular, the allocation of public resources (funds, construction materials, labour, transport) to a facility used cost-free by private users (the fishermen) is economically inefficient. Given the opportunity cost, it is puzzling for a local government to forego a return on investment when scarce financial and other resources are subject to competing demands. Two motivations might explain China’s move on Mischief Reef. First, an expected benefit of low risk-high payoff. The weakness of the Philippines military was common knowledge as were the cool relations existing between Manila and Washington after 1992. Success for Beijing was inevitable, bolstering the prestige and nationalist credentials of both Jiang and the military while securing a feature in the western sector of the Spratlys. In 1998, censure by ASEAN was unlikely to be strong given the organisation’s focus on the unfolding financial crisis. Beijing’s actions to moderate the impact of the crisis, including not devaluing its currency and offering financial aid to 188 Zheng Yongnian, “The Politics of Power Succession” in Wang Gungwu and Zheng Yongnian (eds), Reform, Legitimacy and Dilemmas. China’s Politics and Society, Singapore University Press and World Scientific Publishing Co. Pte. Ltd, Singapore, 2000, p. 43. 275 countries such as Thailand, helped create a positive image of itself in the region.189 The effect was to mute criticism of China by ASEAN members, to the frustration of the Philippines. The second motivation relates to bolstering Beijing’s foreign and security policy objectives. China’s continued economic modernisation, the success of which has implications for the regime’s political legitimacy and public order, is dependent on sustaining foreign trade flows. Shipping is the dominant mode of transport, accounting for more than 90 per cent of China’s foreign trade movements.190 As the world’s second busiest international sea lane, the South China Sea region is a vital conduit for these flows and the import of raw materials and energy products.191 In this context, securing China’s sea lines of communication (SLOCs) is part of the national interest. From a strategic perspective, some scholars suggest the value to Beijing in occupying Mischief Reef is to establish a foothold in the western perimeter of the Spratlys in the manner of a ‘put’ option in any future negotiation.192 Philippines political scientist Carolina Hernandez also discerns a pattern of China occupying the outermost points in the South China Sea.193 Allen Whiting uses the analogy of the game of wei qi to describe China’s tactics in the Spratlys, in which occupancy of space without direct 189 China’s motive was not entirely altruistic. Devaluation of the yuan would have raised the cost of imported inputs for Chinese manufacturers, affecting the competitiveness of their finished products in the international market place. Thomas G. Moore and Dixia Yang, “Empowered and Restrained: Chinese Foreign Policy in the Age of Economic Interdependence” in David M. Lampton (ed.), The Making of Chinese Foreign and Security Policy in the Era of Reform, 1978-2000, Stanford University Press, Stanford, 2001, pp. 191-229. 190 Vijay Sakhuja, “Maritime Power of People’s Republic of China: The Economic Dimension”, Strategic Analysis XXIV(11), 2001, p. 2024. 191 United States Department of Energy, Energy Information Administration, South China Sea Region, Washington D.C., 2002, < 276 attack progressively isolates opposition.194 A different view is offered by Philippines scholar Benito Lim. He argues that Mischief Reef has little strategic value and that China’s occupation of the feature was a symbolic action designed to send a message that it had the capability to occupy any feature it wanted to in the area if necessary.195 Supplementary to means and motive was opportunity. The end of the Cold War saw a power vacuum emerge in Asia.196 China’s move on Mischief Reef can be viewed as “capitalising on opportunities”,197 reflecting not only the new dynamism in the contours of major power relations in Asia in which arrangements for regional order have yet to firm198 but also developments beyond the region. First, the regional financial crisis. The hitherto rapid economic growth experienced by the Asian “tigers” decelerated rapidly, with flow-on effects on military modernisation programmes.199 Between 1997 and 1998, Thailand reduced its defence spending by 39 per cent, Indonesia by 31 per cent, Malaysia by 17 per cent and the 194 Allen S. Whiting, “ASEAN eyes China: The Security Dimension”, Asian Survey XXXVII(4), 1997, p. 303. 195 Interview with Benito Lim, Professor, Asian Center, University of the Philippines, Manila, December 2001. 196 See for example, Mark J. Valencia, “Asia, the Law of the Sea and international relations”, International Affairs 73(2), 1997, pp. 263-82; Paul Dibb, The Emerging Geopolitics of the Asia-Pacific Region, Working Paper No. 296, Strategic and Defence Studies Centre, The Australian National University, Canberra, 1996; Desmond Ball, “The Post Cold War Maritime Strategic Environment in East Asia” in Dick Sherwood (ed.), Maritime Power in the China Seas. Capabilities and Rationale, Australian Defence Studies Centre, Australian Defence Force Academy, Canberra, 1994, pp. 3-34. 197 The term is Ang Cheng Guan’s. Ang Cheng Guan, “The South China Sea Dispute Revisited”, Australian Journal of International Affairs 54(2), 2000, p. 202. 198 A useful examination of the thesis that a new security order is emerging between China and southeast Asia centred on the Spratlys dispute is Liselotte Odgaard, Maritime Security between China and Southeast Asia. Conflict and cooperation in the making of regional order, Ashgate Publishing Ltd, Aldershot, 2002. See also Liselotte Odgaard, “Deterrence and Co-operation in the South China Sea”, Contemporary Southeast Asia 23(2), 2001, pp. 292-306. 199 See for example, Sheldon W. Simon, The Economic Crisis and ASEAN States’ Security, Strategic Studies Institute, U.S. Army War College, Carlisle, 1998. For commentary on trends between the mid- 1980s and mid-1990s see Desmond Ball, “Arms and Affluence. Military Acquisitions in the Asia-Pacific Region”, International Security 18(3), 1993, pp. 78-112; Desmond Ball, “Regional maritime security” in David Wilson and Dick Sherwood (eds), Oceans Governance and Maritime Strategy, Allen and Unwin, St. Leonards, 2000, pp. 63-69. 277 Philippines by 7 per cent.200 Overall, ASEAN’s defence expenditure fell from approximately US$15 billion in 1997 to about US$10 billion in 1998.201 While the financial crisis also affected China,202 its defence spending grew rather than contracted. Beijing’s estimated defence expenditure rose from US$36.6 billion in 1997 to US$37.5 billion in 1998, an increase of 2.4 per cent. In 1999, it rose again to US$39.5 billion, a 5.3 per cent jump on the previous year.203 Second, a pre-occupation on internal affairs by several key non-claimants in 1998. The US was focused on President Clinton’s impeachment hearing,204 developments in Iraq, North Korea and the nuclear tests conducted by India and 200 Anthony Bergin, “East Asian naval developments – sailing into rough seas”, Marine Policy 26(2), 2002, p. 121. See also Tim Huxley and Susan Willett, Arming East Asia, Adelphi Paper 329, Oxford University Press, Oxford, 1999, pp. 15-22. 201 Defence Intelligence Organisation, Defence Economic Trends in the Asia-Pacific 1998, Commonwealth of Australia, Canberra, 1998, p. 3 cited in Cheeseman, “Asia-Pacific security discourse in the wake of the Asian economic crisis”, p. 340. Beginning in 2000, indications of a revival in acquisitions by ASEAN members emerged. This was despite considerable uncertainty in the regional (and global) economic outlook. See for example, Glen Schloss, “Market for War Turns Bullish”, South China Morning Post, 16 March 2000; David Saw, “Defending Malaysia - A Return to Procurement”, Asian Military Review 8(2), 2000, pp. 4-10; Michael Richardson, “East Asians Acquiring Submarines to Guard Sea- Lanes”, International Herald Tribune, 15 January 2001; Malcolm R. Davis, “Back on Course”, Jane’s Defence Weekly, 24 January 2001, pp. 22-27; “Singapore Builds Up Naval Strength”, Far Eastern Economic Review, 12 April 2001, p. 10; David Saw, “Regional Naval Review – Awaiting Real Action”, Asian Military Review 9(8), 2001-2002, pp. 34-40; David Lague, “”We All Live for Another Submarine”, Far Eastern Economic Review, 15 August 2002, pp. 12-14; Richard Scott, “Singapore reveals Project Delta frigate”, Jane’s Defence Weekly, 27 November 2002, p. 14; John Dikkenberg, “The Malaysian Scorpion – a submarine with regional implications”, Asia-Pacific Defence Reporter 28(9), 2002-2003, pp. 42-43; Gordon Bendall, “Malaysia’s air power capabilities to soar with Su-30MK/Super Hornet purchases”, Asia-Pacific Defence Reporter 29(1), 2003, pp. 26-27. 202 On the implications of the crisis see for example, Xiao-ming Li, “China’s Macroeconomic Stabilization Policies Following the Asian Financial Crisis. Success or Failure?”, Asian Survey XL(6), 2000, pp. 938- 57; Yu Yongding, “China’s Deflation during the Asian Financial Crisis, and Reform of the International Financial System”, ASEAN Economic Bulletin 17(2), 2000, pp. 163-74. 203 Author’s calculation derived from expenditure figures for China in International Institute for Strategic Studies, The Military Balance 2000·2001, p. 194; International Institute for Strategic Studies, The Military Balance 1999·2000, p. 186. As noted in Footnote 185 in this chapter, considerable uncertainty attaches to China’s reported figures. 204 Bruce Gilley, Shawn Crispin and Matt Miller, Peter Landers, Susan V. Lawrence, Salil Tripathi, Ahmed Rashid and Shiraz Sidhva, “Asia Ignored”, Far Eastern Economic Review, 1 October 1998, pp. 22-26. 278 Pakistan.205 In Japan, a worsening economic situation and party political instability concentrated Tokyo’s attention on domestic politics.206 Philippines The Mischief Reef dispute spans the presidencies of Fidel Ramos, Joseph Estrada and Gloria Macapagal-Arroyo. In determining the decision unit in Manila, the first step is to consider whether a predominant leader was the ultimate decision-maker. A graduate of the US Army Academy at West Point, former Chief of the Armed Forces and Secretary of Defence, Fidel Ramos was sworn in as President on 30 June 1992. Immediate challenges confronting his administration included a moribund economy, the political and economic fallout from the decision to evict the US from its bases at Clark and Subic Bay, continuing threats to internal security and a series of natural disasters.207 Ramos proved equal to the task.208 Deregulation and privatisation of state assets, and increasing trade and investment links with neighbouring countries provided a policy framework conducive to economic growth. Chronic infrastructural impediments to productivity, particularly power shortages, were addressed. Reforms to the political system and a peace process with communist, Muslim and military rebels yielded some success. And political stability was established, a welcome break with the uncertainty that characterised Corazon Aquino’s term. 205 See for example, Robert A. Scalapino, “The United States and Asia in 1998. Summitry amid Crisis”, Asian Survey XXXIX(1), 1999, pp. 1-11. 206 Robert Uriu, “Japan in 1998. Nowhere to Go but Up?”, Asian Survey XXXIX(1), 1999, pp. 114-24. 207 Greg Sheridan, Tigers. Leaders of the new Asia-Pacific, Allen and Unwin, St. Leonards, 1997, p. 44; Alex B. Brillantes, Jr., “The Philippines in 1992. Ready for Take Off?”, Asian Survey XXXIII(2), 1993, pp. 224-30. 208 The following synthesis derives from Segundo E. Romero, “The Philippines in 1997. Weathering Political and Economic Turmoil”, Asian Survey XXXVIII(2), 1998, pp. 196-202; Carolina G. Hernandez, “The Philippines in 1996. A House Finally in Order?”, Asian Survey XXXVII(2), 1997, pp. 204-11; Carolina G. Hernandez, “The Philippines in 1995. Growth Amid Challenges”, Asian Survey XXXVI(2), 1996, pp. 142-51; Jeffrey Riedinger, “The Philippines in 1994. Renewed Growth and Contested Reforms”, Asian Survey XXXV(2), 1995, pp. 209-16; Jeffrey Riedinger, “The Philippines in 1993. Halting Steps Toward Liberalization”, Asian Survey XXXIV(2), 1994, pp. 139-46. 279 When the Mischief Reef dispute emerged in 1995 Ramos’ background in the defence and security arenas predisposed him to take a strong personal interest in, and participate actively in decision-making on, the issue. In addition, the dispute resonated with one of his key public policy agenda items: to re-orient the country’s development focus from the terrestrial to the marine environment by promoting the Philippines’ status as an archipelagic state.209 Under Executive Order Number 186 of 12 July 1994 Ramos renamed the pre- existing Cabinet Committee on the Law of the Sea as the Cabinet Committee on Maritime and Ocean Affairs (CCMOA).210 Subordinate bodies to the CCMOA include a Maritime and Ocean Affairs Unit within the Department of Foreign Affairs and an inter- departmental technical committee. Reporting to the technical committee was a maritime affairs research community comprising a co-ordinating council and four working level groups dealing with law, administration and enforcement; marine economy and technology; diplomacy and security; and environment, coastal management and education.211 On 8 November 1994r the committee released a National Marine Policy. This emphasised five points: the archipelagic status of the Philippines in development planning, specification of coastal and marine areas as the focal point of community ecology and resources, implementation of the LOSC within the framework of the National Marine Policy, the co-ordination and consultative roles of the Cabinet Committee on Maritime and Ocean Affairs and the identification of four priority concerns.212 These concerns were definition of the extent of national territory, protection of the marine environment, management of the marine economy and development of 209 Interview with Francisco Mier, Assistant Director-General for Policy and Strategy, National Security Council, Manila, December 2001. The Philippines and Indonesia successfully promoted the archipelagic state concept in negotiations on the Third United Nations Conference on the Law of the Sea between 1973 and 1982. 210 The committee is chaired by the Secretary of Foreign Affairs, with the Secretary of Environment and Natural Resources as vice-chair. Other members are the Secretary’s of Finance, Justice, Agriculture, National Defence, Trade and Industry, Transportation and Communication, Economic Planning, Budget and Management, Science and Technology, Interior and Local Government, Energy, the Director-General of the National Security Council and an Executive Secretary. The Executive Order establishing the committee and a list of its members is reproduced in Cabinet Committee on Maritime and Ocean Affairs, National Marine Policy, 8 November 1994, Foreign Service Institute, Manila, pp. 15-19 211 Ibid., p. 19. 280 technology and, lastly, assuring maritime security.213 The latter was defined as “a state wherein the country’s marine assets, maritime practices, territorial integrity and coastal peace and order are protected, conserved and enhanced.”214 China’s occupation of, and construction in, Mischief Reef cut across all the priority concerns listed in the National Marine Policy. Soon after the discovery of Chinese structures on the reef Ramos announced the transmittal of an advisory note to Beijing, ordered the reinforcement of Filipino military forces in other areas claimed by Manila and called for increased aerial surveillance of the reef. Dialogue and diplomacy were to be the cornerstone of the Philippines’ approach to resolving the dispute.215 Moreover, Ramos proposed the South China Sea be demilitarised with each disputed feature placed under the stewardship of the party closest to it. On this basis, functional co-operation could be contemplated.216 Reflecting his emphasis on diplomacy, in mid-March 1995 he sent Foreign Affairs Undersecretary Rodolfo Severino to Beijing to discuss the dispute with Chinese officials. The talks failed to make any progress.217 Displaying a more assertive tone, in April Ramos was quoted as saying “I will not hesitate to take the necessary protective measures for our territory” following the removal of Chinese markers on several disputed features.218 This was a hollow threat: at the time the Philippines had seven aged F-5 jet fighters, one frigate and nine offshore patrol vessels.219 Nonetheless, it indicated Ramos’ patience with diplomacy was not limitless. 212 Ibid., pp. 6-7. 213 Ibid., pp. 7-12. 214 Ibid., p. 11. 215 B. Raman, “Chinese Territorial Assertions: The Case of the Mischief Reef”, < 281 Ramos also lobbied for, and received, congressional endorsement of a defense upgrade programme under the auspices of the 1995 Armed Forces of the Philippines Modernisation Act. In addition, he proposed an alliance of Asia-Pacific middle powers grouping ASEAN, Australia and New Zealand to act as a counter-weight to the region’s major powers, especially China.220 Another response was to encourage the Philippines Senate to ratify a February 1998 Visiting Forces Agreement signed on behalf of the Philippines and the US by Secretary of Foreign Affairs Domingo Siazon and Ambassador Thomas Hubbard respectively. Although the agreement’s scope is limited to joint military exercises, the Ramos administration (and his successor, Estrada, who ironically in 1991 as a senator had voted for the closure of the US bases) considered a US presence to have a deterrent value to limit further Chinese actions in the South China Sea.221 Vigorous debate in the Philippines Senate and vocal public opposition ensued but the agreement was ratified on 27 May 1999. A select group of senior advisers counselled Ramos but they did not hold veto power over decision-making. They were Jose Almonte, who was concurrently the Director-General of the National Security Council and National Security Adviser, Foreign Affairs Secretary Roberto Romulo and his successor, Domingo Siazon,222 and Undersecretary Rodolfo Severino.223 Almonte, whose association with Ramos stretched back more than 25 years, was considered a major behind-the-scenes influence in shaping the president’s views and actions on a range of policy issues.224 Romulo, Siazon and Severino provided the foreign policy expertise, especially concerning the marshalling of support internationally for the Philippines’ position. For example, Siazon and Severino 220 Cheng-Yi Lin, “Taiwan’s South China Sea Policy”, Asian Survey XXXVII(4), 1997, p. 337. 221 The deterrent argument has several weaknesses, however. See Storey, “Manila looks to USA for help”, p. 50. 222 Romulo was Secretary between June 1992 and April 1995. Siazon succeeded him in May 1995 and held the position until January 2001. 223 Severino was appointed Secretary-General of ASEAN in January 1998, stepping down in 2002. 224 See for example, Cibulka, “The Philippine Foreign Policy of the Ramos Administration”, p. 129; Jose Manuel Tesoro and Antonio Lopez, “From Behind the Throne: A Top Adviser Quietly Struggles to Reshape a Nation”, Asiaweek, 15 March 1996; Wilfrido V. Villacorta, “The Curse of the Weak State: Leadership Imperatives for the Ramos Government”, Contemporary Southeast Asia 16(1), 1994, p. 71 and p. 88. 282 successfully lobbied ASEAN foreign ministers to issue the March 1995 statement expressing concern about developments in the South China Sea. Joseph Estrada succeeded Ramos as President in June 1998. Following the second Mischief Reef episode in October 1998 Estrada paralleled his predecessor’s approach in relying on diplomacy and dialogue. Meeting in November 1998 on the sidelines of the Asia-Pacific Economic Co-operation (APEC) Summit in Kuala Lumpur, Presidents Estrada and Jiang agreed to settle their dispute in the Spratlys in a peaceful manner through diplomacy.225 It was agreed, firstly, that the Working Group on Confidence Building Measures should be activated and, secondly, that the respective ministers of foreign affairs should be responsible for leading this effort.226 During their March 1999 meeting Estrada sought, unsuccessfully, to gain the support of UN Secretary-General Kofi Annan to intervene in the South China Sea dispute. Then in November 1999 as host of the Third ASEAN Informal Summit, Manila made a concerted effort to unite ASEAN behind a code of conduct for presentation to China. Beijing declined to sign it (see Chapter 7). Despite high profile meetings on the issue with Jiang and other leaders within and beyond the region, Estrada’s regular and active involvement in decision-making on Mischief Reef was limited. Part of the reason was pressure on Estrada in 1998-99 to focus on economic and public governance challenges.227 Reportedly, in the 21 January 1999 meeting of the National Security Council, the first convened after his installation as President and at which Mischief Reef was high on the agenda, Estrada dozed throughout most of it.228 Nonetheless, China’s reinforcement of the structures on the reef boosted the president’s argument for Senate ratification of the Visiting Forces Agreement. Key advisers to Estrada in this period were Foreign Affairs Secretary 225 Diego Cagahastian, “RP, China agree to settle conflicting claims peacefully”, Manila Bulletin, 18 November 1998. 226 Ibid. 227 See for example, Miriam Coronel Ferrer, “The Philippines. Governance Issues Come to the Fore”, Southeast Asian Affairs 2000, 2000, pp 241-55; Gabriella R. Montinola, “The Philippines in 1998. Opportunity and Crisis”, Asian Survey XXIX(1), 1999, pp. 64-71. 228 Terry McCarthy, “Reef Wars”, Time (Asia), 8 March 1999. 283 Domingo Siazon and Undersecretary Lauro Baja and Defence Secretary Orlando Mercado. In January 2001 Gloria Macapagal-Arroyo replaced Estrada as President when he was forced to step down in the wake of corruption allegations. Contrary to initial signals,229 in October 2003 she confirmed her candidacy for the 2004 presidential election.230 Continuity with the Ramos and Estrada emphasis on diplomacy characterises her approach to the South China Sea dispute. Following a state visit to Beijing in October 2001, she remarked “I expressed the Philippine foreign policy regarding the South China Sea: We want to have a solution that is peaceful and to the mutual satisfaction of all claimants.”231 As noted earlier, she has sought to characterise the South China Sea dispute as an “irritant” in the broader context of Sino-Philippines relations. At least two factors underlie this view. First, the potential to strengthen economic linkages associated with China’s entry into the World Trade Organisation (WTO). The value of Philippines-China trade increased from US$354 million in 1993 to US$1.41 billion in 2000, with the trade balance in favour of China.232 Endorsement by ASEAN and China at the Eighth ASEAN Summit in November 2002 to establish a free trade area in the next decade is expected to open market access opportunities for Philippines products such as seafood, foodstuffs, alcohol, tobacco, consumer goods.233 Second, a preoccupation with internal security leaves few resources to devote to external problems such as the Spratlys dispute.234 Manila warmly welcomed the November 2002 signing of the Declaration on the Conduct of Parties in the South China Sea. Reasons for this probably included reflected prestige, having championed since 229 “Sic transit Gloria”, Economist, 4 January 2003, p. 24. 230 “The Philippines. Surprise, surprise”, Economist, 11 October 2003, pp. 32-33. 231 “President cites gains of state”. 232 Ellen H. Palanca, “Forging Closer ASEAN-China Economic Relations in the Twenty-First Century. National Report Philippines”, ASEAN-China Expert Group on Economic Cooperation, Forging Closer ASEAN-China Economic Relations in the Twenty-First Century, 2001, p. 82, < 284 1999 a regional code of conduct, and the prospect that a multilateral instrument, albeit a non-binding one, could exert stronger peer pressure. And compared to a bilateral instrument, it spread the burden of monitoring compliance. Relating these observations to Figure 1 in Chapter 2, it is suggested that the predominant leader, Ramos, was the decision unit in the first (1995) Mischief Reef episode. He displayed an active interest and involvement in foreign and defence issues. For example, he undertook thirty-six overseas visits during his term of office,235 promoted the 1995 Armed Forces of the Philippines Modernisation Act and pushed for revived military co-operation with the US through the 1996 launch of negotiations on the Visiting Forces Agreement. Mischief Reef highlighted the inadequacies of the Philippines military to defend the country’s sovereignty claim in the Kalayaan Island Group. In the absence of any meaningful capability to exert economic and military pressure on China, diplomacy was the primary response. Evidence of high level diplomacy relates to several outcomes. First, the successful lobbying of ASEAN foreign ministers to issue a collective statement one month after the first Mischief Reef episode. Second, the establishment of a united ASEAN position in the April 1995 meeting with senior Chinese officials in Hangzhou, prompting Beijing to make several concessions. Third, agreement by China in August that year to a joint statement setting out principles for a bilateral code of conduct in the South China Sea. Ramos’ regular, active participation in the decision process included attendance at National Security Council meetings to discuss the Mischief Reef issue and seeking advice from selected experts such as Jose Almonte and the senior most officers in the Department of Foreign Affairs. In the 1998 episode, and since then, there is less evidence supporting the predominant-leader-as-decision-unit argument. This is despite the President being the decision-maker in foreign policy generally.236 While Presidents Estrada and Arroyo have taken an active interest in foreign and defence policy issues, they do not appear to have 235 Figure for overseas visits sourced from Romero, “The Philippines in 1997”, p. 201. 285 exhibited regular, active participation in the decision process on the Mischief Reef issue in particular. Their style combines high level diplomacy, as evidenced in their willingness to bring up the South China Sea dispute in discussions with Jiang Zemin and Zhu Rongji,237 and general statements supporting a peaceful resolution to the matter. Estrada preferred the advice of the Department of Foreign Affairs over other inputs238 whereas Arroyo appears to favour the counsel of her National Security Adviser, Roilo Golez, over the foreign ministry. In light of this, we consider whether a single group or multiple autonomous actors constituted the decision unit. The mission of the Department of Foreign Affairs (DFA) is “[t]o advance the interests of the Philippines and the Filipino people in the world community”.239 Within this, key political strategies are to “contribute to the enhancement of national security and protection of territorial integrity and national sovereignty”, “promote Philippine interests by working closely with other countries in addressing threats to national security and human rights” and “assist national government in enhancing its defense capabilities.”240 Within the department, Secretary Domingo Siazon and Undersecretaries Roldofo Severino and Lauro Baja were responsible for advising on the Philippines’ strategy on South China Sea issues and acting as the country’s interlocutors in ASEAN, the ARF and in bilateral dialogue with China. The Department of National Defence (DND) has sometimes taken a hardline stance on South China Sea issues. For example, in relation to the 1998 Mischief Reef episode Defence Secretary Mercado dismissed China’s assurance to Foreign Affairs 236 Salvador P. Lopez, “The Foreign Policy of the Republic of the Philippines” in Raul P. De Guzman and Mila A. Reforma (eds), Government and Politics of the Philippines, Oxford University Press, Singapore, Oxford and New York, 1988, p. 241. 237 See for example, Xiao Rui, “Zhu Rongji, Estrada Discuss South China Sea Issue”, Xinhua, 26 November 1999. 238 Interview with Aileen San Pablo-Baviera, Associate Professor, Asian Center, University of the Philippines, Manila, December 2001. 239 Department of Foreign Affairs, The Philippines, “DFA Strategic Plan 2001-2004”, < 286 Secretary Siazon that it would not erect any new structures in the Spratlys.241 Armed Forces of the Philippines Chief of Staff Joselin Nazareno also portrayed a stronger Philippines position in announcing an 8 million peso renovation of the facilities on Thitu Island.242 Nonetheless, the defence force is not the ultimate decision unit. Armed Forces Chief of Staff General Diomedio Villanueva acknowledged this in 2001, stating that foreign policy making is the responsibility of the political leadership: “we reiterate that we are subordinate to the decisions of our political leaders.”243 The next group is a senior official’s level inter-agency group known as Cluster E. As noted in Chapter 4, under Corazon Aquino’s presidency a number of clusters were established.244 Cluster E deals with security and political development. In relation to South China Sea issues Cluster E has been the lead official’s group. Its members include the Secretaries of Foreign Affairs, National Defense, Interior and Local Government and Justice, the Director-General of the National Security Council (concurrently the National Security Adviser), the Executive Secretary of the President, a representative of the Presidential Management Secretariat and the President’s spokesperson. Representatives of other agencies such as the Central Bank or the National Economic and Development Authority (NEDA) are invited to meetings and deliberations as appropriate.245 A mini Cluster E also exists. In relation to South China Sea issues it comprises representatives of the National Security Council, the Department of National Defense, the Department of Foreign Affairs, the Department of Fisheries, the Department of Environment and Natural Resources and the National Mapping and Resource Information Authority.246 241 Cathy Rose Garcia and Y.L.G. Arpon, “PRC’s Reassurance to end Spratlys Constructions Dismissed”, Philippine Daily Inquirer, 30 June 1999; “We can’t trust China – DND”, BusinessWorld (Philippines), 30 June 1999. 242 Ibid. The Philippines refer to Thitu Island as Pagasa Island. 243 “Philippines fires protest against China over fishing boats in disputed shoals”, Philippine Star, 20 March 2001. 244 Interview with Emma Sarne, Director, Department of Foreign Affairs, Manila, November 2001. 245 Interview with Francisco Mier, Assistant Director-General for Policy and Strategy, National Security Council, Manila, December 2001. 246 Interviews with Emma Sarne, Director, Department of Foreign Affairs, Manila, November 2001 and Aileen San Pablo-Baviera, Associate Professor, Asian Center, University of the Philippines, Manila, December 2001. 287 Cluster E acts as an advisory committee to the President and the Cabinet and is not a decision-making group. A further group is the National Security Council (NSC) located within the Office of the President. The President chairs the executive committee of the NSC; other members include the Senate President, the Speaker of the House of Representatives, the secretaries of defence, foreign affairs, justice and interior and local government, the National Security Adviser and the Director-General of NEDA. Former presidents and serving politicians may be invited to attend meetings on an ad hoc basis. Concerning Mischief Reef, the NSC met several times, including in November 1995 (during the Ramos administration), January 1999 (the first meeting under the Estrada presidency)247 and March 2000. At the January 1999 meeting it was agreed that a combination of bilateral and multilateral diplomatic initiatives would be used to pressure China.248 Other peaceful initiatives would be evaluated and modernisation of the AFP would continue. Beyond the specific issue of Mischief Reef, the NSC has yet to define a coherent strategy addressing the Philippines’ broader claim in the Spratlys.249 In 1999 it delegated this task to the Cabinet Committee on Maritime and Ocean Affairs, chaired by the Secretary of Foreign Affairs.250 Roilo Golez, a congressman since 1992, was appointed Director-General of the NSC and National Security Advisor under the Arroyo administration. Previously, retired military officers had monopolised the position. In the Ramos presidency, Dr. Jose Almonte, a former Brigadier-General, held the post while Estrada appointed Major- General Alexander Aguirre. As noted earlier, Almonte was a confidant of Ramos; Aguirre did not have a similarly close relationship with Estrada. Golez sought to differentiate himself from Almonte and Aguirre by characterising the approach of previous administrations on South China Sea issues as being too diplomatic and quiet. 247 “Trouble brews on Mischief Reef”, BBC News, 22 January 1999; Michael Richardson, “Philippines is Stymied in Dispute with China”, International Herald Tribune, 21 January 1999. 248 “Trouble brews on Mischief Reef”. 249 Francisco N. Cruz, “A Strategy for the KIG”, Office of Strategic and Special Studies Digest, Armed Forces of the Philippines, 1st and 2nd Quarter, 2001, p. 21. 288 He favoured “creating noise” in international forums to amplify the Philippines’ position and support for it in a bid to stop China’s expansionary moves.251 By virtue of its membership the NSC included everyone within the regime whose support was essential to commit or withhold regime resources on the Mischief Reef issue. Its decisions were not readily reversible by outside opposition. In particular, it was led by Estrada and included the advisers on whom he relied heavily, Secretary of Foreign Affairs Domingo Siazon and Secretary of Defence Orlando Mercado. Accordingly, a single group, the NSC, is identified as the decision unit in the second (1998) Mischief Reef episode. 6.3 The Decision Unit and Foreign Policy Behaviour China In this section we examine how the multiple autonomous actors decision unit comprised of Jiang Zemin, the Politburo Standing Committee and the PLA influenced the government’s foreign policy behaviour on the Mischief Reef issue. For this decision unit type the relationship among the actors is the key variable in explaining behaviour.252 On the one hand, a multiple autonomous actors decision unit in which the principal explanation for foreign policy behaviour lies within the group is termed self- contained.253 The relationship among the actors is characterised as zero-sum: each holds strong beliefs about how to handle a given situation in international affairs and does not favour compromise or incremental progress towards a goal.254 Deadlock may result because no member is willing to cede its position.255 In this case, predicted foreign 250 Ibid. 251 Johnna Villaviray, “NSC wants strong drive on Spratlys”, The Manila Times, 23 February 2001. 252 Margaret G. Hermann and Charles F. Hermann, “Who Makes Foreign Policy Decisions and How: An Empirical Inquiry”, International Studies Quarterly 33(4), 1989, p. 364. 253 Ibid. 254 Ibid., p. 373. 255 Ibid., p. 375. 289 policy behaviour is passive behaviour, a low commitment of regime resources and a preference for diplomacy.256 On the other hand, if the decision unit is sensitive to external influences the behaviour of the government is likely to be characterised by moderation and incrementalism, reflecting recognition of the uncertainties associated with launching an action.257 The relationship among the actors is termed non-zero-sum because compromise is possible. Theoretically, behaviour in this case is characterised by co- operation, a moderate commitment of regime resources and the use of a range of instruments of statecraft.258 The identified decision unit was unlikely to compromise on issues involving territorial integrity. Against a backdrop of succession politics involving competition for the military’s support, acting tough to uphold territorial integrity was not unhelpful. Seizing Mischief Reef would fall within this, and especially as Manila was not in a position to respond in any meaningful way. Beijing had responded robustly to the Philippines Department of Energy’s May 1994 granting of a six-month oil exploration permit to the American company Vaalco Energy covering an area 400 km west of Palawan, even if it was only for a desk-top study. 259 China’s Assistant Foreign Minister Wang Mingfan lodged a protest and the Ministry of Foreign Affairs immediately issued a statement restating China’s sovereignty over the area.260 Beijing may have been concerned that Manila’s next step would be the authorization of site exploration, providing a way for Manila to bolster its assertion of effective control and authority in the area. If so, this would have similarities with China’s approach in May 1992 when it granted a concession to American oil company Crestone Energy Corporation to explore 256 Ibid. 257 Ibid., pp. 375-6. 258 Ibid., p. 376. 259 Roberto Tiglao, “Troubled Waters. Philippine offshore oil search roils China”, Far Eastern Economic Review, 30 June 1994, pp. 20-21. 260 Ibid., p. 20. 290 in an area between Vanguard Bank and Prince of Wales Bank, about 160 nautical miles off Vietnam’s coast and apparently extending into Hanoi’s claimed continental shelf.261 Upholding territorial integrity might unite the decision unit members, but their motivation for invoking it in the Mischief Reef case probably differed. For Jiang, fending off rivals for the leadership required the declared support of the military. As David Bachman noted at the time: “… the People’s Liberation Army can sit back and allow the politicians to compete for its support or at least its neutrality.”262 How the issue of nationalism was projected was of particular sensitivity to the People’s Liberation Army.263 Bachman suggests the military and its leaders were willing to intervene in succession politics if they considered the politicians were “betraying the officially sanctioned version of nationalism.”264 This, he asserts, promoted a hardline stance by the leadership on disputed territorial claims and issues of Chinese sovereignty.265 Supporting, or at least not obstructing, action on Mischief Reef was a way for Jiang to demonstrate this. For the military, Mischief Reef provided an opportunity to promote its demand for extra budgetary resources as part of the drive to modernise the navy within its mission to protect China’s territorial integrity. And in the bureaucratic battle with the Ministry of Foreign Affairs for influence in South China Sea policy, moving on Mischief Reef was a demonstration of resolve to stand firm on China’s claim. Unity by the multiple autonomous actors decision unit on handling perceived challenges to China’s territorial integrity is one indicator of it being self-contained. As Hermann and Hermann note, self-contained decision units typically have strong views about what should be done and are ready to undertake the necessary action; their 261 Mark J. Valencia, Jon M. van Dyke and Noel A. Ludwig, Sharing the Resources of the South China Sea, Martinus Nijhoff Publishers, The Hague, 1997, p. 27. 262 David Bachman, “Succession Politics and China’s Future”, Journal of International Affairs 49(2), 1996, p. 381. 263 Ibid. 264 Ibid., pp. 381-82. 265 Ibid., p. 382. 291 approach is direct. 266 The theoretical behaviour associated with a self-contained multiple autonomous actors decision unit is passivity, commitment of few regime resources and reliance on diplomacy.267 For China, the theoretically predicted and actual behaviour show no fit. Instead of passive behaviour, China was noticeably active through twice undertaking construction work on Mischief Reef. The second episode in 1998 significantly strengthened the facilities materially and functionally. In addition, rather than the hypothesised low commitment of regime resources the reverse occurred. Seven naval vessels268 transported building materials, communications equipment and construction workers more than 1100 km to the reef.269 Logically, the materials transported in 1998 must have exceeded that in 1995 because the resulting facility was stronger, covered a larger area and had improved communications capability; 100 workers reportedly undertook the construction work.270 In another departure from theoretically predicted behaviour, rather than favouring diplomacy Beijing relied on it intermittently as and when necessary. After both the issuance of statement of concern by ASEAN foreign ministers in March 1995 after the first Mischief Reef episode and the unified stance adopted by senior ASEAN foreign ministry officials in their April 1995 meeting with their Chinese counterparts at Hangzhou China resorted to diplomacy to reduce tension. For example, in July China’s Foreign Minister Qian Qichen indicated that Beijing was willing to use international law, including the LOSC, to guide negotiations on the Spratlys and to discuss the South China Sea dispute with all the ASEAN claimants.271 Then in August, China and the Philippines issued a joint statement on consultations on the South China Sea and other areas of co-operation, a so-called bilateral code of conduct (see section 6.1). In November 1996 Jiang Zemin made an official visit to the Philippines, during which he called for a peaceful resolution to the South China Sea 266 Hermann and Hermann, “Who Makes Foreign Policy Decisions and How”, p. 373. 267 Ibid., p. 375. 268 Dzurek, “China Occupies Mischief Reef in Latest Spratly Gambit”, p. 67. 269 Dzurek gives a distance of 1110 km between China’s Hainan Island and Mischief Reef. Ibid., p. 65. 270 Tiglao, Sherry, Thayer and Vatikiotis, “‘Tis the Season”, p. 19. 271 Valencia, van Dyke and Ludwig, Sharing the Resources of the South China Sea, p. 88. 292 dispute. This did not constrain Beijing from upgrading its structures on Mischief Reef in late 1998, a development to which Manila could not respond in any meaningful way. Zhu Rongji’s state visit in November 1999 came in the wake of the second Mischief Reef episode and on the heels of Manila’s ratification in May of the Visiting Forces Agreement. In bilateral discussions, Beijing continually rebuffed Manila’s calls for the structures to be dismantled and its request for joint use of the facility. Philippines As noted earlier, two different decision units were identified: in 1995 it was the predominant leader, President Ramos, while in 1998 it was the National Security Council. In relation to foreign policy behaviour concerning the first Mischief Reef episode, the key factor is whether the predominant leader was sensitive or insensitive to inputs from the external environment.272 A number of factors suggest Ramos was sensitive to such information, making him externally influenceable. As noted earlier, the Director-General of the National Security Council and National Security Adviser Jose Almonte was very close to Ramos. In addition, the President valued the advice of Foreign Affairs Secretary Domingo Siazon and Undersecretary Rodolfo Severino. Another source of influence may have been his sister, Leticia Shahani. Besides being her brother’s foreign policy adviser, she was also a senator in the Philippines congress and had been an Assistant Director-General of the United Nations.273 Seeking the inputs of such advisers was not a recent trait of Ramos; a consultative and consensus-building approach to decision-making characterised his style from his military days.274 Likely other influences on Ramos included recognition of the weak state of the Philippines 272 Hermann and Hermann, “Who Makes Foreign Policy Decisions and How”, pp. 364-65. 273 Villacorta, “The Curse of the Weak State”, p. 84. 274 Ibid., p. 83. 293 military, the high political and economic cost of any military confrontation,275 the views of the National Security Council and loss, or at least erosion, of the moral high ground. The theoretically predicted foreign policy behaviour of a government based on a predominant leader decision unit who is externally influenceable is a co-operative or neutral position, commitment of a moderate amount of regime resources and reliance on diplomacy.276 Predicted and actual behaviour showed a close fit. The co-operative stance adopted by Manila towards the Mischief Reef dispute recognised that this was the only realistic option in dealing with Beijing; no meaningful capability existed to exert economic or military pressure. From Manila’s perspective, the conclusion of the August 1995 bilateral code of conduct vindicated the co-operative approach. Underscoring this was China’s agreement in March 1996 to establish three joint working groups on fisheries co-operation, marine environmental protection and confidence building measures. The effectiveness of these groups in relation to addressing the Mischief Reef dispute is questionable, however.277 Co-operative behaviour was evident in the effort Ramos made to re-establish a relationship with the US, primarily through the launch of negotiations on a visiting forces agreement.278 In addition, deeper engagement with ASEAN as an organisation and with its constituent members was reinforced as a foreign policy priority.279 This paid dividends in 1995 when ASEAN foreign ministers supported the Philippines through the issuance of a statement of concern about developments in the South China Sea and referred to Mischief Reef. 275 Aileen S.P. Baviera, Bilateral Confidence Building with China in Relation to the South China Seas Dispute: A Philippine Perspective, Report prepared for International Security Research and Outreach Programme, International Security Bureau, Department of Foreign Affairs and International Trade, Canada, Ottawa, 2001 (February), pp. 7-8, < 294 A moderate amount of state resources was committed to dealing with Mischief Reef. Free-riding on the US military presence in the archipelago had allowed Manila to concentrate on internal security threats. The departure of the US military presence exposed the woeful state of the Philippines armed forces to deal with external threats. After the discovery of China’s occupation of Mischief Reef, Ramos ordered increased surveillance of the feature by the Philippines air force and the launch of a concerted bilateral and multilateral diplomatic effort. Although Manila relied on diplomacy, Aileen Baviera notes an important limiting factor: in territorial and maritime dispute negotiations the Philippines had limited experience to draw on for guidance.280 For the 1998 Mischief Reef episode a single group, the National Security Council, was identified as the decision unit. In this case the key determinant of a government’s foreign policy behaviour is the promptness with which consensus in decision-making is reached.281 Theoretically, if consensus is reached quickly the decision unit is considered self-contained.282 The predicted foreign policy behaviour is a conflictual stance, either a strong commitment or denial of state resources and the deployment of economic and military as well as or instead of diplomacy.283 After the discovery of China’s reinforced structures on Mischief Reef, the Philippines reconfirmed its focus on bilateral and multilateral diplomacy. Few other alternatives existed. This lack of options suggests quick agreement by the decision unit to maintain the pre-existing strategy, making it self-contained. Hypothesised and actual foreign policy behaviour showed a weak fit. Rather than a conflictual stance, Manila adopted a co-operative position. Underlining the justification for this stance, Foreign Affairs Secretary Siazon hinted at Manila’s relatively weak position in its dialogue with China (see section 6.1). A strong commitment of regime resources, involving primarily the President, politicians and the diplomatic corps, was evident. Senior officials of the 280 Baviera, Bilateral Confidence Building with China in Relation to the South China Seas Dispute, p. 25. 281 Hermann and Herman, “Who Makes Foreign Policy Decisions and How”, pp. 364-65. 282 Ibid., p. 373. 295 Department of Foreign Affairs lobbied for support in ASEAN and the ARF. President Estrada and Senate President Blas Ople appealed to the US and Japan respectively to take an active interest in the dispute. Estrada also invited UN head Kofi Annan to use his “good offices” to intervene. And politicians attempted to raise the South China Sea dispute in forums such as the seventh annual meeting of the Asia-Pacific Parliamentary Forum in Lima, the Asia-Europe Meeting in Berlin284 and the Interparliamentary Union Conference in Brussels. 6.4 Domestic Politics as a Contextual Influence China Plucked from relative obscurity as mayor of Shanghai, in 1989 Jiang Zemin replaced Zhao Ziyang as the anointed successor to Deng Xiaoping in the wake of the Tiananmen protests.285 Despite Deng’s patronage Jiang was by no means assured of support within and outside the government, especially by the military. Unlike Mao and Deng, Jiang was the first post-revolution leader who did not have a personal link to, or a powerbase in, the military. In this context, one of Deng’s and Jiang’s priorities was securing the latter’s appointment as head of the Central Military Commission (CMC). This was achieved on 9 November 1989 after the party plenum accepted Deng’s resignation from the chairmanship of the CMC and his replacement by Jiang.286 Jiang consolidated his leadership position as General Secretary of the Chinese Communist Party and Chairman of the Central Military Commission in 1992.287 283 Ibid. 284 Francisco S. Tatad, Guarding the Public Trust. The Making of Public Policy, Raya Books, Quezon City, 2000, pp. 150-57. 285 For discussion of Zhao’s fall and the elevation of Jiang as General Secretary of the Chinese Communist Party see Gilley, Tiger on the Brink, pp. 129-34, p. 138 and pp. 145-48. 286 Ibid., pp. 165-66. 287 The former resulted from Deng Xiaoping’s successful sponsorship of Jiang as the core of the third generation of China’s leaders, while the second came after the 1992 purge of Yang Baibing, Secretary- General of the Central Military Commission and a Jiang rival for control of the military, and a wide ranging reshuffle of senior military personnel. Ibid., pp. 145-48, p. 166 and pp. 193-97. 296 Nonetheless, the potential for factionalism within the military to derail political stability saw Deng initiate several changes in 1992 and 1993.288 After the Fourteenth Party Congress in October 1992 not only were senior positions in the PLA better balanced among the army but also a number of promotions were made on merit rather than political connections.289 Of greater interest to this study was the growth in the navy’s influence vis-à-vis the army. By electing six naval representatives as full or alternate members of the party’s Central Committee at the Fourteenth Party Congress, this service dominated the military composition.290 This was not without reason: “it … mirrored the fact that much of the power projections of the country in the 1990s would take place over the deep blue seas.”291 It was also no coincidence that Admiral Liu Huaqing, a driving force behind the shift in China’s naval strategy from coastal defence to a blue water capability,292 was appointed to the Politburo Standing Committee at the same congress. In 1989 at age 73 Liu had been recalled from retirement by Deng to serve as his “eyes and ears” on the CMC in the role of Second Vice-Chairman.293 Liu also served as Jiang’s mentor in the CMC to facilitate his acceptance by the military and to counter the influence of Yang Baibing, Secretary-General of the commission, and his half- brother Yang Shangkun who was both its First Vice-Chairman and State President.294 Both Yang brothers were relieved of their military posts at the Fourteenth Party Congress.295 Liu’s standing with the military was strong and his involvement in the politics of the leadership transition evident in the 1995-96 Taiwan Straits crisis.296 By then Liu’s usefulness to Jiang was nearing an end and he was retired for a second time at the Fifteenth Party Congress in 1997. 288 Lam, China after Deng Xiaoping, p. 221. 289 Ibid. 290 Ibid. 291 Ibid. 292 On the shift to a blue water ambition see Bernard D. Cole, The Great Wall at Sea. China’s Navy Enters the Twenty-First Century, Naval Institute Press, Annapolis, 2001; Bernard D. Cole, “China’s Maritime Strategy” in Susan M. Puska (ed.), People’s Liberation Army After Next, Strategic Studies Institute, US Army War College, Carlisle, 2000, pp. 279-325; You Ji and You Xu, “In Search of Blue Water Power: The PLA Navy’s Maritime Strategy in the 1990s”, Pacific Review 4(2), 1991, pp. 137-149. 293 Gilley, Tiger on the Brink, p. 166. 294 Ibid. 295 Ibid., p. 195. 297 By 1993, Jiang held simultaneously the three senior-most posts in the country: General-Secretary of the Chinese Communist Party, head of the Central Military Commission and State President. The formal transition to the post-Deng era was completed in 1994, with the communiqué of the party’s central committee plenum in September that year noting “[t]he party has already completed the transfer from the second generation of central leadership collective to the third.”297 Despite Jiang’s control of the political and military levers of power, however, there remained concern that without Deng’s influential behind-the-scenes presence the new leader’s authority remained open to challenge.298 In this context, as the core of the third generation of China’s leadership Jiang’s task was to balance continuity and change, conservatism and innovation in the political, economic and security spheres. Formalisation of the transition to the Jiang era meant that by 1995 he had the political authority to define a vision of China’s future.299 A major challenge was the articulation of his distinctive contribution while continuing with the Deng reformist agenda.300 Jiang identified strengthening patriotism, fighting corruption, rejuvenating the party, promoting social development and defining the state’s new role in the economy as priority issues.301 Progress in these areas would hopefully sustain the Communist Party’s hold on power and lay the foundations for what Gilley terms a “developmental dictatorship”, permitting economic and social liberalisation but not a loosening of political and media controls.302 Strengthening patriotism received early attention.303 As Deng’s influence faded with the decline in his health during 1994-1995,304 succession politics involving Jiang and his rivals, Li Peng, Qiao Shi and Li Ruihuan, 296 Bi, “The Role of the Military in the PRC Taiwan Policymaking”, p. 566 and p. 572. 297 Quoted in Gilley, Tiger on the Brink, p. 228. 298 Ibid. 299 Ibid., p. 240. 300 Ibid., p. 239. 301 Ibid., p. 240. 302 Ibid. 303 Ibid., p. 241. Implementing anti-corruption measures was another early initiative. 304 In February 1994 Deng made his first public appearance in a year. As it turned out, it was also his last. It was, in Gilley’s view, a “sickly sight … Deng’s eyes wandered and his mouth hung open. … A final 298 intensified. Li Peng and Qiao were ranked two and three respectively in the Politburo Standing Committee; the former held the post of Premier and the latter Chairman of the Standing Committee of the National People’s Congress. Both had ambitions to succeed Deng but their involvement in suppressing the Tiananmen protests neutered their candidacy in 1989.305 Deng’s encouragement to them to endorse Jiang’s elevation to party general secretary carried weight in 1989306 but over time their support dissipated.307 Li Ruihuan was also a contender to succeed Deng.308 By the Fourteenth Party Congress in 1992 he ranked fourth in the Politburo Standing Committee, immediately below Qiao. The influence of these men in the leadership transition politics of the 1994-96 period was not trivial as their role in the Taiwan Straits crisis of 1995-96 attests.309 For example, in late 1995 Li Peng, Qiao and Li Ruihuan and another Politburo Standing Committee member, Liu Huaqing, as well as CMC vice-chairman General Zhang Zhen criticised Jiang’s soft approach on reunification with Taiwan. The military joined with their view.310 Views differ about the reasons behind this development. On the one hand, Bi suggests the threat posed by Jiang’s rivals and the possibility of the military shifting its allegiance to them compelled him to adopt a photograph of Deng watching the National Day fireworks display on 1 October made it clear that he was nearing death.” Ibid., p. 228. 305 Ibid., p. 131and p. 147. 306 Ibid., p. 138. 307 For example, Qiao pushed for greater political reforms in China, opposed Jiang’s 1996 plan to resurrect the post of party chairman, complained about the impotence of the National People’s Congress, China’s parliament, and warned of the risks of Jiang heading simultaneously the party, military and state. Li, on the other hand, sought to undermine Jiang by taking control of economic policy making as early as mid- 1990. Uneven economic performance in the early 1990s attracted much criticism of Li’s policies, however, and when he suffered a heart attack in April 1993 Zhu Rongji took take control of the economic portfolio. After 1993 Li’s influence on economic policy making was minimal but he remained a political force, albeit diminished. Ibid., pp. 171-73, p. 197, pp 203-05, p. 305, p. 306 and p. 334. 308 Ibid., p. 132 309 After 1992 the Taiwan issue became the party’s main priority. By 1995 pressure on Jiang to show leadership on the issue had intensified because of the rejection by Taiwan President Lee Teng-hui in April that year of his eight point proposal for reunification and the granting of a visa in May the same year by the Clinton administration enabling Lee to attend a June reunion at Cornell University. Lee had received his Ph.D. there in 1968. Losing hope of negotiating with Lee and responding to the army’s call for a show of strength, in July 1995 Jiang authorised the PLA to commence missile drills in the Taiwan Strait. This activity was repeated in August. Combined service war games were held in October and November and again in March 1996. Ibid., p. 248-57; Bi, “The Role of the Military in the PRC Taiwan Policymaking”, pp. 558-61 and pp. 567-72. 310 Ibid., p. 566, p. 572. 299 hardline stance and to authorise a show of force in the Taiwan Straits.311 You Ji on the other hand plays down the jockeying-for-position thesis and places greater emphasis on nationalism underlying an abiding consensus among the top leaders about reunification with Taiwan, and the means to achieve it: peacefully if possible, by force if necessary.312 While succession politics might divide aspirants as each seeks to gain an advantage over the other, core national interest issues such as territorial integrity appear indivisible. Both Ji and Shee, for example, invoke the importance of nationalist sentiments concerning threats to China’s territory.313 Indeed, Shee suggests that China’s occupation of Mischief Reef is part of its broader strategic and political plans in the Asia-Pacific region.314 Viewed in this light, adopting a robust approach to defending territorial integrity had the advantage of seizing the high ground of patriotism from political opponents and narrowing room for policy differentiation. An opponent who advocated a softer approach could be criticised for showing weak resolve or being unpatriotic. In the context of a leadership transition and the need to shore up support within both the Communist Party and the military, no aspirant could afford to be accused of either. It also highlights the co-option of the ideology of nationalism to serve domestic political and foreign policy agendas.315 As Zheng Yongnian notes, “ideology has been increasingly used as a “tool” by the leadership to legitimize its policy packages.”316 Launching action on Mischief Reef can be considered against this backdrop. It served to signal Jiang’s firmness in upholding Beijing’s “indisputable” sovereignty in the Spratlys. It also provided a useful opportunity for him and the military to press their respective interests. For Jiang, an avenue to steal a march on his political rivals by 311 Ibid., p. 572. 312 Ji, “Making Sense of War Games in the Taiwan Strait”, p. 289. 313 Ibid; Shee Poon Kim, “The South China Sea in China’s Strategic Thinking”, Contemporary Southeast Asia 19(4), 1998, p. 371. 314 Ibid. 315 A useful examination of Chinese nationalism and its role in conditioning China’s foreign policy behaviour is Suisheng Zhao, “Chinese Nationalism and its International Orientations”, Political Science Quarterly 115(1), 2000, pp. 1-33. 316 Zheng, “The Politics of Power Succession”, p.30. 300 reaffirming his status as ‘first among equals’ and to reinforce his nationalist credentials with party conservatives and the military. The action also meshed with Jiang’s call to strengthen patriotism.317 For the PLA, the action fell within its mandate to protect China’s territorial integrity and provided an opportunity to push its bureaucratic and political interests. Following the military’s forceful intervention in Tiananmen Square in May and June 1989 the PLA’s status as defender of the party was enhanced.318 Mindful, however, of the effects on the Soviet political regime following its implosion in 1991 China’s leaders sought to strengthen control over, and loyalty within, the PLA.319 Military representation on the Chinese Communist Party Central Committee elected at the Fourteenth Party Congress in 1992 increased to 24.3 per cent320 compared to 18 per cent at the previous congress in 1987.321 In addition, after the 1992 congress Deng authorised ten generals to attend Politburo meetings.322 And by stressing technological modernisation, professionalism and merit-based promotions, Jiang enhanced his standing with the armed forces; increased budget allocations also helped.323 By 1994 Jiang had completed a major reshuffle of the military’s senior ranks, replacing many officers with his allies.324 Jiang may also have sought to test the mettle of Presidents Ramos and Estrada through a low risk-high benefit move on Mischief Reef. A former defence secretary, Ramos had first-hand knowledge of the AFP’s limitations. This constrained his options, a consideration presumably not lost on Beijing. In addition, it provided a test of the extent to which the US would respond to Ramos’ attempt to draw it into the dispute in a context where he personally had longstanding good relations with Washington but state- 317 Gilley, Tiger on the Brink, p. 240. 318 Lam, China after Deng Xiaoping, p. 194. 319 Ibid; Gilley, Tiger on the Brink, p. 167. 320 Li Cheng and Lynn White, “The Army in the Succession to Deng Xiaoping: Familiar Fealties and Technocratic Trends”, Asian Survey XXXIII(8), 1993, p. 758. 321 Lam, China after Deng Xiaoping, p. 196. 322 The favoured generals included Zhang Zhen, Chi Haotian, Zhang Wannian, Yu Yongbo and Fu Quanyou, all members of the Central Military Commission. Ibid., p. 197. 323 Gilley, Tiger on the Brink, p. 167, p. 194 and p. 226. 301 to-state interactions were cool following the bases eviction in 1992.325 In the case of Estrada, Beijing may have sought an early litmus test of the new president’s capabilities in international politics. In particular, only four months had elapsed between his election in June 1998 and the reinforcement of China’s structures on the reef. Beijing may also have calculated that the likelihood of an intervention by other powers was small in both 1995 and 1998. In the case of the US, not only had its military left the Philippines in 1992 but also China was careful not to threaten freedom of navigation, a core US interest. Indeed, Washington had signaled that Mischief Reef was not of vital security interest to it since this was unlikely to be affected.326 Organised by Philippine officials, the December 1998 fly-over of the reef by American congressman Dana Rohrabacher generated negative and positive comment in Washington, Beijing and Manila but no shift in the US position. As noted earlier, at the time of the second Mischief Reef episode the US was focused on domestic politics and international issues elsewhere of higher priority. Seeking to get Tokyo’s support, Manila appealed to its economic self-interest in open sea lines of communication. This call went unanswered.327 Philippines Given that the Philippines government defends its claim to Mischief Reef on the basis that the feature is located within the country’s EEZ, and therefore an integral part of its territory, no president can afford to be seen as soft on the issue. Speaking after the 1998 discovery of a fortified Chinese structure on Mischief Reef, the then Chair of the Senate Foreign Relations Committee Blas Ople suggested 324 More than 300 senior officers at headquarters and 1000 regional commanders were either reassigned or retired. Ibid., p. 196, p. 225. 325 On Ramos’ good standing in Washington, see Sheridan, Tigers. Leaders of the New Asia Pacific, p. 42 and p. 56. On whether the US might have known of the 1995 Mischief Reef construction before Manila discovered it, see John McBeth, “Who Knew What?”, Far Eastern Economic Review, 6 April 1995, p. 15. 326 Storey, “Creeping Assertiveness”, p. 111. 327 “Manila asks Tokyo for Support in Spratly Dispute with China”, Asia Pulse, 7 December 1998. See also “AFP chief sees likely ally in Japan to keep status quo in Spratlys”, BusinessWorld (Philippines), 16 July 1999. 302 “there is no question that the national honor is engaged on this speck of rock.”328 He went on to categorise players within the Philippines government as either ‘hawks’ or ‘doves’. Among the former were Defence Secretary Mercado, with his characterisation of China’s actions as a creeping invasion of Philippine territory.329 On the other hand Foreign Affairs Secretary Domingo Siazon was labelled a dove, with a clear preference for bilateral diplomacy to settle the dispute. President Estrada, in Ople’s view, straddled both camps. He did not favour conflict but was not going to retreat from a test to the country’s sovereignty and honour. The politicians could also be divided. On the one hand, those in the Senate were watchful but cautious. The House of Representatives on the other hand was more impulsive, as evidenced by its call for a re-examination of the Philippines’ adhesion to a one-China policy. In Ople’s view, it was fortunate for the President that the House played no role in foreign policy making.330 Strong statements by Filipino politicians and officials against China’s move on Mischief Reef were made in both 1995 and 1998. As one scholar notes, however, these remarks were mainly intended for a domestic audience and rather than helping defuse tension, may have enflamed them.331 Opposition political parties seek to gain “mileage” from South China Sea issues but unless a crisis occurs there they do not place it very high on their agenda.332 Invoking China as a bully generated headlines but it did not lead to concerted public pressure on the government to alter its parallel strategy of bilateral dialogue and seeking international support. If the politicians’ intent was to stir nationalist feelings among the general population and key opinion-formers to drive a policy change, it failed. Wide knowledge of the military’s weak capability may be a partial explanation; another element may relate to the dispute failing to resonate strongly beyond the relatively small circle of the political, military and policy elites. 328 Blas F. Ople, “The gravity of Mischief Reef”, Manila Bulletin, 13 November 1998. 329 Ibid; “Philippines accuses China of creeping invasion”, BBC World Service, 9 November 1998. 330 Ople, “The gravity of Mischief Reef”. 331 Baviera, Bilateral Confidence Building with China in Relation to the South China Seas Dispute, p. 11. 332 Interviews with Francesco Mier, Assistant Director-General for Policy and Strategy, National Security Council and Aileen San Pablo-Baviera, Associate Professor, Asian Center, University of the Philippines, Manila, December 2001. 303 Domestic politics has been invoked as a reason why President Estrada sought to keep bilateral tension with China high at the end of 1998.333 By identifying a potential Chinese threat to Philippine national security in the Spratlys the President was able to underline to the Senate the benefits of renewing military co-operation with the US through the Visiting Forces Agreement.334 At the same time, Manila’s resources were stretched. It was simultaneously confronting two security problems. First, a resurgence of internal security problems. Second, external difficulties with China over Mischief Reef and Scarborough Shoal, and with Malaysia over Investigator Shoal and Erica Reef. Bureaucratic politics were also evident. One commentator suggests that the Department of National Defense played up the sovereignty threat in the Spratlys to argue for more resources. Keeping the Defense Department’s demands in check were the Congress, who control budget appropriations, and non-governmental organisations, who monitor the share of funding received by different public policy sectors.335 The Department of National Defense and the Department of Foreign Affairs also have their differences. The former opposed the foreign ministry’s focus on bilateral talks with China on joint use of the Mischief Reef facility, arguing that this implicitly recognised Beijing’s claim to the feature.336 (The reverse argument could also be made.) Another area of contention concerned Defence Secretary Mercado’s June 1999 recommendation to President Estrada that the Philippines should follow the construction path of China (on Mischief Reef) and Malaysia (on Investigator Shoal) by building lighthouses and marine environmental protection centres in its claimed area of the Spratlys to shore up its physical presence and to deter other claimants.337 In dismissing the idea, Foreign 333 “Tensions between the Philippines and China Continue to Simmer”, 4 December 1998, < 304 Affairs Secretary Siazon termed it “mere speculations” and reiterated that diplomatic channels should first be exhausted to settle the dispute rather than joining in a “construction boom”.338 Siazon opposed construction of structures because not only would it divert budgetary resources away from meeting the basic needs of Filipinos339 but also it undermined the moral high ground Manila had claimed internationally.340 He was also wary of antagonising ASEAN members ahead of the meeting of its foreign ministers on 23-24 July 1999 and the ARF meeting on 26 July, where Manila hoped to garner support for its draft code of conduct in the South China Sea.341 In the end, Siazon’s view prevailed.342 This highlights a more general problem. Beyond the position of defending Philippines sovereignty over Mischief Reef and relying on diplomacy to advance this, there appear few other common points of understanding within the government on handling South China Sea issues. A coherent whole-of-government position is lacking.343 Lack of continuity in political and policy circles because of routine rotations of bureaucrats and changes in administration personnel after Presidential elections may partially explain this.344 6.5 Summary 338 Ibid. 339 Ibid. 340 Dario Agnote, “Manila drops plan to build structures in the Spratlys”, Japan Economic Newswire, 8 July 1999. 341 “RP backs off anew in Spratlys row”, BusinessWorld (Philippines), 9 July 1999. 342 Agnote, “Manila drops plan to build structures in the Spratlys”. 343 Cesar Pobre, a Filipino academic and formerly a colonel in the armed forces, has presented ten policy options to strengthen Manila’s position on the Spratlys issue. The government’s response to them is unknown. In a similar vein, American academic Mark Valencia has outlined a five-step strategy that Manila might adopt. See Cesar P. Pobre, “RP-China Relations with Focus on the Spratly Islands Group Dispute”, National Security Review XIX(2), 1999, pp. 33-36; Mark J. Valencia, “Mischief at the Reef”, Far Eastern Economic Review, 20 May 1999, p. 31. 344 Interviews with Francesco Mier, Assistant Director-General for Policy and Strategy, National Security Council; Aileen San Pablo-Baviera, Associate Professor, Asian Center, University of the Philippines; and Emma Sarne, Director, Department of Foreign Affairs, Manila, December 2001. 305 This chapter focused on the bilateral dispute between the Philippines and China over Mischief Reef. China seized the feature in 1995 and consolidated its hold in 1998. It is firmly in possession of the feature with little prospect of being evicted. In Beijing the decision unit on this issue was identified as multiple autonomous actors. Its members were Jiang Zemin, the Politburo Standing Committee and the PLA. Between the 1995 and 1998 Mischief Reef episodes the relative influence of decision unit members changed. In 1995, the military was the pivotal member. Jiang needed its support in the context of succession politics in train at the time. By 1998, succession politics had abated. Jiang’s triumph over his rivals to succeed Deng was complete and he held simultaneously the top three positions of power in the party, military and state as well as being foreign policy supremo through his position as head of the Foreign Affairs Leading Small Group. His support by the military was firm. In contrast to 1995, Jiang was now the pivotal member of the decision unit. The decision unit was self-contained, which meant the principal explanation for foreign policy behaviour lay within the group. Predicted and actual foreign policy behaviour did not match. Instead of passive behaviour China twice undertook construction activity on Mischief Reef despite protests by the Philippines. In addition, rather than the hypothesised low commitment of regime resources the reverse occurred. Ships transported building materials, communications equipment and personnel more than 1100 km to the reef. In another departure from theoretically predicted behaviour, rather than reliance on diplomacy Beijing relied on it intermittently as and when necessary. Beijing used diplomacy to reassure Manila through the 1995 bilateral code of conduct. It also recognised ASEAN’s concern and its apparent unity by halting further physical action in the reef, albeit temporarily. In 1998 China moved again, reinforcing and expanding its structure on the reef. Since then Beijing has continually rebuffed Manila’s calls for dismantlement or joint use of the facility. In the domestic politics sphere, succession politics was cited as a factor behind China’s 1995 move on Mischief Reef. It served to signal Jiang’s firmness in upholding 306 Beijing’s “indisputable” sovereignty in the Spratlys. It provided a low risk-high payoff opportunity for him and the military to press their respective interests: the former to steal a march on his political rivals by reaffirming his status as ‘first among equals’ and to reinforce his nationalist credentials with party conservatives and the PLA. It also meshed with his call to strengthen patriotism. The bureaucratic and political interests of the PLA were assisted by moving on Mischief Reef. In the context of the mandate of the Political Report of the Fourteenth Party Congress held in 1992 to protect territorial integrity it reinforced its demands for extra resources, demonstrated its resolve to defend China’s “indisputable” sovereignty in the Spratlys and underlined its stronger voice in foreign policy issues. In the case of the Philippines, in the first Mischief Reef episode the decision unit was identified as the predominant leader, President Ramos. Several factors suggested he was externally influenceable. Advisers such as Director-General of the National Security Council and National Security Adviser Jose Almonte, Foreign Affairs Secretary Domingo Siazon and Undersecretary Rodolfo Severino were regularly consulted by Ramos. Other factors included Ramos’ awareness of the weakness of the Philippines military, the high political and economic cost of any military confrontation, the views of the National Security Council and the loss of the moral high ground. The predicted and actual foreign policy behaviour showed a close fit. A co- operative stance was evident through the emphasis on diplomacy. In addition, Ramos made strong efforts to re-establish a relationship with the US through the launch of negotiations on a visiting forces agreement. In addition, deeper engagement with ASEAN as an organisation and its constituent members was reinforced as a foreign policy priority. A moderate amount of state resources was committed to the issue. After the discovery of China’s structure on the reef, Ramos ordered increased surveillance of the feature by the Philippines air force, and the launch of a concerted bilateral and multilateral diplomatic effort. For the 1998 Mischief Reef episode, a single group was identified as the decision unit: the National Security Council. It grouped President Estrada and others 307 within the regime on whom he relied most heavily, including Secretary of Foreign Affairs Domingo Siazon and Secretary of Defence Orlando Mercado. After the discovery of the reinforced structures on Mischief Reef, the Philippines reaffirmed its response strategy based on bilateral diplomacy and internationalisation of the issue. Given the lack of options, it suggests quick agreement among decision unit members to maintain the pre-existing strategy. In this sense, the unit was self-contained. Predicted and actual foreign policy behaviour showed a weak fit. Rather than a conflictual stance, Manila adopted a co-operative position. A high commitment of regime resources, primarily political and diplomatic outreach, was evident. There was no resort to economic or military instruments of statecraft. Domestically, no Philippines president can afford to be seen as being soft on Mischief Reef. Statements by Filipino politicians and officials against China’s move on the feature were grandstanding to a domestic audience rather than driven by considered analysis. Invoking China as a bully generated headlines but it did not lead to public pressure on the government to alter its approach based on diplomacy. Nor did the issue provoke demonstrations of nationalism. China’s actions, however, did help build support for a long-term programme to modernise the armed forces and the 1999 ratification of the Visiting Forces Agreement. Finally, a coherent whole-of-government approach for handling Mischief Reef and the South China Sea dispute more broadly has yet to be defined. The result is ad hoc, ‘fire-fighting’ responses to events. 308 7.0 REGULATING CONDUCT IN THE SOUTH CHINA SEA The negotiation of a multilateral instrument between the Association of Southeast Asian Nations (ASEAN) and China to regulate conduct in the South China Sea breaks with the pattern of bilateralism evident in the codes of conduct concluded between the Philippines and China in August 1995 and between the Philippines and Vietnam in November 1995. While China’s preference was to handle the South China Sea dispute through bilateral interactions, an approach that Lam Peng Er characterises as a “one giant-one pygmy” formula,1 it showed pragmatism by joining the negotiation of a regional instrument.2 This chapter looks behind the negotiation of a regional instrument of conduct by focusing on who in Beijing, Kuala Lumpur and Manila made decisions on the issue and how the decision unit influenced government behaviour. This differentiates the analysis from previous works that examine the draft code of conduct in the South China Sea,3 although I draw on them. Another point of difference is the chapter’s discussion of the most recent development: the Declaration on the Conduct of Parties in the South China Sea signed by ASEAN and China on 4 November 2002. We begin by considering the need for an instrument to regulate conduct in the South China Sea. Following this the development of a regional instrument is traced over three phases. First, from 1991 to 1999. During this period the idea of a code of conduct was given substance, starting from the Second Informal Workshop on Managing Potential Conflicts in the South 1 Lam Peng Er, “Japan and the Spratlys Dispute. Aspirations and Limitations”, Asian Survey XXXVI(10), 1996, p.1007. 2 Dario Agnote, “China Urges ASEAN to Speed up Adoption of S. China Sea Code”, Kyodo News, 26 July 2001; “China says agreement ready on disputed S. China Sea islands”, Kyodo News, 18 July 2001; “Spokesman: Code of conduct needed for South China Sea”, China Daily, 31 August 2000; Barry Porter, “Beijing still wants to see Spratly code. Pragmatic approach urged in developing islands”, South China Morning Post, 30 November 1999; Connie Er, “Beijing has not rejected Spratlys code”, The Straits Times, 30 November 1999. 3 See for example Nguyen Hong Thao, “Vietnam and the Code of Conduct for the South China Sea”, Ocean Development and International Law 32(2), 2001, pp. 105-30; Kriangsak Kittichaisaree, “A Code of Conduct for Human and Regional Security Around the South China Sea”, Ocean Development and International Law 32(2), 2001, pp. 131-47; Clive Schofield, “A Code of Conduct for the South China Sea?”, Jane’s Intelligence Review 12(11), 2000, pp. 36-40; Yann-huei Song, “Codes of conduct in the South China Sea and Taiwan’s stand”, Marine Policy 24(6), 2000, pp. 449-59. 309 China Sea held in 1991 in Bandung, Indonesia to ASEAN’s endorsement of a draft code at its Third Informal Summit of Heads of State/Government in 1999. That year China also presented a draft code for ASEAN’s consideration. The second phase, spanning 2000 and 2001, focuses on the efforts by ASEAN and China to reconcile their draft texts. The third phase begins in 2002. It focuses on a new approach proposed by Malaysia to break the deadlock on the code of conduct: a non-binding declaration of conduct. The penultimate section of the chapter identifies the decision unit in each country, how it shaped government behaviour and the role of domestic politics. A summary of the chapter’s key points is then presented. 7.1 Why the Need for a Regional Instrument to Regulate Conduct in the South China Sea? It has been argued that existing multilateral and bilateral instruments already provide a framework for the conduct of ASEAN member states and China in the South China Sea.4 Relevant multilateral instruments cited to support this view are ASEAN’s 1976 Treaty of Amity and Co-operation in Southeast Asia (TAC) and its 1998 Second Protocol that provides for non-ASEAN states to accede to the treaty, and the 1995 Southeast Asia Nuclear Weapon-Free Zone Treaty (SEANWFZ). 5 In addition, the United Nations Convention on the Law of the Sea (LOSC) is invoked because apart from Cambodia and Thailand all the countries bordering the South China Sea have now ratified it.6 It has also been suggested that China considers the December 1997 Joint Statement of the Meeting of Heads of State/Government of the Member States of ASEAN and the President of the People’s Republic of China establishes sufficient ‘rules of the game’ to guide behaviour in the South China Sea.7 On the bilateral front, two agreements to manage the dispute have been concluded, as noted in the introductory 4 Kriangsak, “A Code of Conduct for Human and Regional Security Around the South China Sea”, pp. 131-32, p. 140 and p. 145. 5 Ibid., pp. 134-36. 6 Ibid., p. 136. Both Cambodia and Thailand are signatories to the Law of the Sea Convention. 7 Ibid., pp. 131-32. The Joint Statement of the Meeting of Heads of State/Government of the Member States of ASEAN and the President of the People’s Republic of China agreed on 16 December 1997 in Kuala Lumpur is available at < 310 remarks. Given the existence of these various instruments, it has been asserted that the challenge is to implement them rather than to produce a new one.8 In light of these considerations, why has ASEAN invested so much diplomatic prestige and effort in promoting a regional instrument of conduct? Three reasons are suggested. First, while it is correct that several relevant instruments already exist, they do not deal explicitly with the South China Sea dispute. They are too broad in scope and their language too general. This is not to say that they should be cast aside. Rather, they form the contextual reference for a dedicated instrument on regulating behaviour in the South China Sea. Second, a specific instrument complements other pillars for confidence-building among the parties to the dispute and sets out their commitments even if they are non- binding. In this way, a regional instrument provides a reference point for measuring claimants’ performance in forums such as the ASEAN-China dialogue process, the ASEAN Regional Forum (ARF), the Workshop on Managing Potential Conflicts in the South China Sea series and the Maritime Co-operation Working Group of the Council for Security Co-operation in the Asia Pacific (CSCAP). A third reason is that the successful conclusion of an instrument demonstrates the willingness and ability of ASEAN and China to reach agreement without the involvement of extra-regional powers.9 Both China and Malaysia have consistently 8 Kriangsak, “A Code of Conduct for Human and Regional Security Around the South China Sea”, p. 131 and p. 140. 9 Remarks by Ali Alatas, former Foreign Minister of Indonesia to the Council on Foreign Relations, New York, 20 December 1996 cited in Song, “Codes of conduct in the South China Sea and Taiwan’s stand”, pp. 452-53. 311 opposed the involvement of outsiders.10 In this regard, agreement on an instrument has symbolic as well as political value. It supports the argument that ASEAN continues to be relevant in regional affairs despite its haphazard performance in dealing with the financial crisis that afflicted its members during 1997-1999, the haze problem in 1997- 1998 arising from uncontrolled forest burning in Kalimantan, Borneo and Sumatra and its silence on events in East Timor before and after the referendum on independence from Indonesia. It reaffirms the role of ASEAN’s norms and the so-called ‘ASEAN Way’ that includes but is not limited to consensus building, the pacific resolution of disputes and non-interference in members’ internal affairs.11 This is especially the case in the South China Sea issue where China is seen to be challenging at least two of ASEAN’s norms: the non-use of force and of restraint.12 An agreed instrument also demonstrates that ASEAN and China are able to deal with each other pragmatically.13 And it represents an incremental step towards the publicly declared desire of all parties to achieve a peaceful settlement of the South China Sea dispute. 10 On China’s opposition to the involvement of non-South China Sea states or the United Nations in the dispute see Thalif Deen, “China warns outsiders to keep out of Spratlys dispute”, Asia Times, 8 December 1999; Lee Lai To, China and the South China Sea Dialogues, Praeger, Westport, 1999, pp. 61-62. On Malaysia’s opposition to such involvement see Statement by H.E. Datuk Seri Syed Hamid Albar, Minister of Foreign Affairs, Malaysia at the 32nd ASEAN Ministerial Meeting, 23 July 1999, Singapore, Paragraph 15, < 312 7.2 Phase I: Unilateral Drafts of a Code of Conduct in the South China Sea, 1991-1999 The roots of a regional instrument of conduct lie in the Bandung Principles adopted at the second Workshop on Managing Potential Conflicts in the South China Sea, held in July 1991 in Bandung, Indonesia.14 ASEAN member states, China, Taiwan and Vietnam participated in the meeting.15 The six elements comprising the Bandung Principles are: 1. Without prejudice to territorial and jurisdictional claims, to explore areas of cooperation in the South China Sea. 2. Such areas of cooperation may include cooperation (a) to promote safety of navigation and communication; (b) to combat piracy and armed robbery; (c) to promote the rational utilization of living resources; (d) to protect and preserve the marine environment; (e) to conduct marine scientific research; and (f) to eliminate illicit traffic in drugs in the South China Sea. 3. In areas where conflicting territorial claims exist, the relevant states may consider the possibility of undertaking cooperation for mutual benefit, including exchange of information and joint development. 4. Any territorial and jurisdictional dispute in the South China Sea should be resolved by peaceful means through dialogue and negotiation. 5. Force should not be used to settle territorial and jurisdictional disputes. 6. The parties involved in such disputes are urged to exercise self-restraint in order to avoid complicating the situation.16 Within ASEAN the effort to develop a code of conduct was led by the Philippines. In his opening address to the twenty-fifth ASEAN Ministerial Meeting (AMM, bringing together the foreign ministers of member states), held in July 1992 in Manila, Philippines President Fidel Ramos reiterated the need for a solution to the overlapping claims in the South China Sea and for the United Nations to play a stronger 14 See Hasjim Djalal, “Indonesia and the South China Sea Initiative”, Ocean Development and International Law 32(2), 2001, p. 99. 15 Ibid. 16 Ibid., p. 100. 313 role in conflict resolution.17 The latter remark reflected the Philippines’ desire to internationalise the dispute by involving non-claimants and/or international organizations (se also Chapter 4). However, within ASEAN this was not the consensus view. Malaysia’s Foreign Minister Syed Hamid Albar reiterated his country’s position that third parties should not become involved in the dispute, with issues within the ASEAN group confined to discussion and decision among the member countries.18 Malaysia, like China, consistently opposed discussion of the dispute in the ASEAN Regional Forum (ARF), maintaining the body was too broad and multilateral a forum.19 In the event, ASEAN foreign ministers affirmed their support for: all parties concerned to apply the principles incorporated in the Treaty of Amity and Cooperation in Southeast Asia as the basis for establishing a code of international conduct over the area [the South China Sea]. The Foreign Ministers decided to issue a separate Declaration on this matter. 20 The ASEAN Declaration on the South China Sea is a modified version of the Bandung Principles.21 Known as the Manila Declaration, it comprises five elements.22 First, it emphasises the need to resolve all sovereignty and jurisdictional issues relating to the South China Sea by peaceful means, eschewing the use of force. Second, all parties are to exercise restraint to create a “positive climate” for the eventual resolution of all disputes. Third, without prejudice to the sovereignty and jurisdiction issues the parties resolve to explore possible co-operation in the South China Sea concerning the safety of maritime navigation and communication, protection against marine pollution, co-ordination of search and rescue operations, and combating piracy, armed robbery and illicit trafficking in drugs. Fourth, the parties are to apply the principles of ASEAN’s 17 Joint Communique, 25th ASEAN Ministerial Meeting, Manila, Philippines, 21-22 July 1992, Paragraph 8, < 314 Treaty of Amity and Co-operation as the basis for establishing a code of conduct in the South China Sea. Finally, all parties are invited to subscribe to the declaration. Signed by the foreign ministers of Brunei, the Philippines, Indonesia, Singapore, Malaysia and Thailand, the Manila Declaration was the first at an intergovernmental level to promote the establishment of a code of conduct in the South China Sea. Vietnam endorsed the declaration even though at that time it was not a member of ASEAN.23 China’s reaction was more circumspect.24 It did not associate itself with the declaration at the time and has yet to do so. Nonetheless, it was indirectly associated with it through the Non-Aligned Movement’s endorsement of the document at its summit meeting in Jakarta in September 1992.25 As one commentator notes: … it was obvious that the Chinese did not agree with everything in the Declaration. They considered that parts of the South China Sea, notably the Pratas and Paracels, were not really related to ASEAN affairs. They were also concerned that the formal Declaration might be a precursor to discussions on jurisdiction and sovereignty issues, a move that the Chinese would refuse to entertain as this would compromise their claim over the whole Spratly area.26 ASEAN foreign ministers meeting in July 1993 urged “all parties directly concerned to subscribe to the principles” of the declaration,27 a veiled reference to China. In August 1995 the ARF held its second meeting, at which the Philippines raised the idea of developing a multilateral code of conduct in the South China Sea.28 Philippines Secretary of Foreign Affairs Domingo Siazon suggested that as an interim 23 Lee, China and the South China Sea Dialogues, p. 26. 24 Ibid., p. 25. 25 On China’s unsuccessful opposition to the Non-Aligned Movement Summit Meeting endorsing the 1992 ASEAN Declaration on the South China Sea see Charles Smith and Suhaini Aznam, “Reason and rhetoric”, Far Eastern Economic Review, 17 September 1992, p. 11. 26 Lee, China and the South China Sea Dialogues, p. 26. 27 Joint Communique of the Twenty-sixth ASEAN Ministerial Meeting, Singapore, 23-24 July 1993, Paragraph 13, < 315 measure to settling the sovereignty issue the countries involved in the South China Sea dispute should seek to develop a code as an informal arrangement to guide their behaviour in the area.29 The Chairman’s Statement from the meeting did not record this proposal, however. Rather, the relevant part of the statement merely commended the workshop series on managing potential conflicts in the South China Sea as a contribution to improving dialogue and co-operation and encouraged all claimants to reaffirm their commitment to the principles of relevant international laws and conventions, and ASEAN’s 1992 Declaration on the South China Sea.30 The twenty-ninth AMM held in Jakarta in July 1996 gave impetus to developing a code of conduct. In Paragraph 11 of the communique from the meeting ASEAN foreign ministers expressed their concern about developments in the South China Sea,31 an implicit reference to China’s 1995 occupation of Mischief Reef within the Philippines’ claimed 200 nautical mile exclusive economic zone (EEZ). They “endorsed the idea of concluding a regional code of conduct in the South China Sea which will lay the foundation for lone [sic] term stability in the area and foster understanding among claimant countries.”32 The ministers also reiterated the importance of freedom of navigation and overflight in the South China Sea.33 At the Sixth ASEAN Summit held in Hanoi on 15-16 December 1998, heads of state and government of the member states adopted the Hanoi Plan of Action. This identified activities to realise the objectives of the ASEAN Vision 2020 strategy endorsed at the Second ASEAN Informal Summit held in December 1997. Part VII of the Plan of Action concerns strengthening regional peace and security. Paragraphs 13 to 16 of this part focus on the South China Sea dispute, with the latter paragraph urging 29 Ibid. 30 See Chairman’s Statement. The Second ASEAN Regional Forum, Brunei Darulsalam, 1 August 1995, Paragraphs 10 and 11, < 316 members to “[p]romote efforts to establish a regional code of conduct in the South China Sea among the parties directly concerned.”34 To give effect to this request, in May 1999 the ASEAN Senior Officials Meeting (ASEAN SOM)35 invited the Philippines and Vietnam to prepare a draft code of conduct. Manila took the lead and prepared a first draft that committed the parties to exercise self-restraint and to refrain from unilateral actions that would increase tensions or complicate the situation, including the occupation of new islands, reefs or other features and the expansion of occupied territory. Activities requiring the construction of new permanent structures or facilities were to be carried out on a co-operative bilateral or multilateral basis. In addition, the draft called for bilateral and multilateral co- operation in marine environmental protection, marine scientific research, navigational safety, meteorological research, search and rescue operations and combating transnational crime. Pending a resolution of the dispute, the parties were to engage in dialogue and consultations to explore ways to build trust and confidence. Another feature of the initial draft was an invitation to concerned parties outside the region to subscribe to the code. Exchanges among military officers to discuss confidence-building and conflict prevention measures, such as the voluntary reduction of forces and establishment of communication’s ‘hotlines’, were also called for.36 The first draft of the code was presented to both the AMM and ARF at their meetings in July 1999. Following the thirty-second AMM held in Singapore on 23-24 July 1999 Paragraph 39 of the joint communique noted that several issues in the South China Sea remained a source of concern. The paragraph recalled not only the 1996 endorsement by ASEAN foreign ministers of developing a code of conduct but also the consensus of Paragraph 16 reached at the Sixth ASEAN Summit (see above). Of greater interest was the subsequent mix of process and declaratory language: 34 Association of Southeast Asian Nations, Sixth ASEAN Summit, Ha Noi Plan of Action, Ha Noi, Vietnam, 15 December 1998, < 317 Pursuant to these agreements, we noted that as a follow-up to the ASEAN SOM recommendation in May 1999, the Philippines has submitted a draft Regional Code of Conduct for the immediate consideration of the ASEAN SOM Working Group on ZOPFAN and SEANWFZ at its next meeting. We recognised the positive contribution of the ongoing bilateral and multilateral consultations among the parties concerned at the intergovernmental level, the extensive consultations at the ASEAN-China Dialogue and the regular exchange of views in the ARF, and the on-going Informal Workshops on Managing Potential Conflicts in the South China Sea and encouraged their continuance.37 This mix of messages departed from the approach of previous ministerial communiques. An explanation of the procedural directive relates to tensions that surfaced in the ASEAN Senior Officials Meeting prior to the Singapore meeting of foreign ministers. Both Malaysia and Vietnam were concerned about how the Philippines was managing the process of formulating the draft code. To Malaysian officials it appeared that the Philippines was intent on fast-tracking the approvals process by seeking to submit the draft code to ASEAN foreign ministers, and subsequently to political leaders, without any prior discussion at the senior officials level.38 Rather than ASEAN rushing to endorse the document, Malaysia’s view was that it should go through the usual review process.39 Moreover, in the view of Malaysia’s Foreign Minister Syed Hamid Albar the style of the draft code presented by the Philippines was overly legalistic rather than being a political document with guidelines. He commented: Because the draft looks like a treaty, we need to study each and every article in it. … How can you adopt it when there is no form and substance yet. … In Asean there is no pushing but only consensus. We always discuss behind the doors to 37 Joint Communique, The 32nd ASEAN Ministerial Meeting, Singapore, 23-24 July 1999, Paragraph 39, < 318 achieve some form of agreement. … We have no problem about having the code of conduct which we have agreed but now, we want to discuss the form and substance.40 Vietnam was also unhappy with the perceived intention of the Philippines to accelerate the process. Reportedly, this was why Hanoi declined to be identified as the co-author of the draft code.41 This was reflected in the absence of Vietnam’s name in the relevant paragraph in the communique from the foreign ministers’ meeting (see above). In addition, both Malaysia and Indonesia opposed the Philippines’ intention to table a framework paper rather than a draft code as directed by the ASEAN SOM.42 A framework paper would be more restrictive because the scope for negotiation was narrower.43 In response to the objections, the Philippines presented a draft of the code and a further document entitled “Explanatory Notes on the Code of Conduct in the South China Sea”.44 Philippines Foreign Secretary Domingo Siazon indicated there had never been an intention to circumvent the review process by senior officials.45 ASEAN foreign ministers declined to endorse the first draft of the code at the thirty-second AMM in July 1999. In emphasising that it was never the intention of that meeting adopt the code, the Chair, Singapore’s Foreign Minister Professor S. Jayakumar, accentuated the positive: “Most Ministers only saw the code a few days ago … it requires the examination of various agencies by [sic] member countries. But what is significant is that everyone is unanimous in wanting the draft code to be studied by a working group.”46 Domingo Siazon, Syed Hamid Albar and Ali Alatas, respectively the foreign ministers of the Philippines, Malaysia and Indonesia, supported Jayakumar’s 40 “Code of Conduct Does Not Reflect Original Spirit, Says Syed Hamid”. 41 “Malaysia feels members should not be rushed on proposed code”. 42 Ibid. 43 Ibid. 44 Ibid. 45 Jacob, “Manila presses Asean to adopt code of conduct”. 46 Ravi Nambiar and Ramlan Said, “Peaceful settlement of disputes urged”, The New Straits Times, 25 July 1999. 319 statement.47 As noted above, these officials were at the centre of disagreement about the form of and process for progressing the draft code. The ARF also did not endorse the draft code at its meeting on 26 July because of opposition by China and Malaysia, who argued that the Spratlys dispute should be confined to bilateral discussion by the parties concerned.48 The forum did acknowledge ASEAN’s on-going efforts to draft a regional code of conduct.49 China reacted coolly to the idea of a regional code of conduct. As China’s Ambassador to the Philippines, Ms. Fu Ying, put it: “Since we have already signed so many documents at this stage, we don’t see why we should have another.”50 China’s preference was to promote as an alternative Paragraph 8 of the Joint Statement of the Meeting of Heads of State/Government of the Member States of ASEAN and the President of the People’s Republic of China, agreed on 16 December 1997 in Kuala Lumpur. This states: Recognizing that the maintenance of regional peace and stability served the interests of all parties, they undertook to resolve their differences or disputes through peaceful means, without resorting to the threat or use of force. The parties concerned agreed to resolve their disputes in the South China Sea through friendly consultations and negotiations in accordance with universally recognized international law, including the 1982 UN Convention on the Law of the Sea. While continuing efforts to find solutions, they agreed to explore ways for cooperation in the areas concerned. In the interest of promoting peace and stability as well as enhancing mutual confidence in the region, the parties concerned agreed to continue to exercise self-restraint and handle relevant differences in a cool and constructive manner. They further agreed not to allow existing differences to hamper the development of friendly relations and cooperation.51 47 Paul Jacob, “Spratlys” Call for peaceful resolution”, The Straits Times, 25 July 1999. 48 Nambiar and Said, “Peaceful settlement of disputes urged”. 49 Chairman’s Statement, The Sixth Meeting of the ASEAN Regional Forum, Singapore, 26 July 1999, < 320 At the Fifth ASEAN-China SOM in Kunming in April 1999 Philippines Foreign Affairs Undersecretary Lauro Baja raised the idea of a regional code of conduct52 but was dismayed by the lack of support from his ASEAN colleagues.53 China signalled its preference for the 1997 joint statement.54 Subsequently, Ms. Yang Yanyi, Councilor, Department of Asian Affairs in China’s Ministry of Foreign Affairs stressed that Beijing considered the joint statement “as the genuine, highest-level political code of conduct” to resolve disputes between the two sides.55 At the 1999 ARF meeting in Singapore, Ms. Zhang Qiyue, spokesperson for China’s Ministry of Foreign Affairs, reaffirmed China’s opposition to discussing a regional code of conduct in that forum: China is not in favor of discussing this issue [the code of conduct] at any multilateral forum because this can only lead to further complications of the matter. … The consistent position of China on this issue is that the dispute in the South China Sea should be resolved through bilateral negotiations between countries concerned in [sic] peaceful means.56 She went on to note that in the ASEAN-China Post-Ministerial Consultation (ASEAN-China PMC) China’s Foreign Minister Tang Jiaxuan would propose recourse to the 1997 joint statement as an alternative to a code of conduct.57 Clearly, the Chinese felt more comfortable with the vaguer wording of Paragraph 8 of the joint statement than the more specific text in the draft code of conduct such as no new construction or expansion on structures and no occupation of uninhabited features. Beijing had little to lose in promoting the joint statement because it had already rejected the draft ASEAN code in the preceding ARF meeting. 52 Cathy Rose Garcia, “Other States’ Inclusion in Spratlys Code of Conduct Urged”, World Reporter, 19 April 1999. 53 “Concern over Spratlys statement”, The Straits Times, 27 April 1999. 54 Song, “Codes of conduct in the South China Sea and Taiwan’s stand”, p. 454. 55 “China Cool to Asean Spratlys Code”, The Nation, 8 July 1999. 56 “China rejects ASEAN ‘code of conduct’ for Spratlys”, Asian Political News, 2 August 1999. See also “China: Spokeswoman opposes South China Sea “code of conduct””, BBC Worldwide Monitoring, 26 July 1999. 57 Ibid.; Paul Jacob, “Support for code of conduct on S. China Sea”, The Straits Times, 27 July 1999. 321 China’s agreement to discuss the Spratlys dispute in the July 1999 ASEAN-PMC meeting, which included claimant and non-claimant states of ASEAN, broke with its previous insistence that the issue be restricted to bilateral discussions with the directly concerned parties.58 Two factors may have played a role in this decision. First, China appreciated that there was little incentive for ASEAN leaders to pressure it on the South China Sea issue at the time. ASEAN was grateful that while Japan and the US could not or would not offer economic support during the Asian financial crisis,59 China had done so by not devaluing its currency. Had China done so, the potential existed for a spiral of devaluations across the region as countries sought to maintain their relative export competitiveness. In light of China’s practical support during this period and the weak regional economic rebound that was emerging in 1999, antagonising China as not helpful. The second reason why China may have agreed to discuss the dispute in the ASEAN-PMC was its restricted membership. Major non-claimant states such as Australia, Japan, India, Russia and the US were absent, unlike in the ARF. A number of these states had made clear their position on the draft code at the earlier ARF meeting while the likely reaction of others could be estimated taking into account their regional security interests and partnerships.60 In September 1999 the Philippines submitted a second draft of the code for comment by ASEAN members. As well as reiterating the commitment to a peaceful resolution of sovereignty and jurisdictional issues related to the dispute and resiling from 58 Leslie Lopez, “China to Discuss Spratlys in Talks with Claimants”, The Asian Wall Street Journal, 27 July 1999. 59 Indirectly the two countries offered support by endorsing the assistance programmes prepared by the International Monetary Fund, the World Bank and the Asian Development Bank. 60 On Australia’s support for a code, see Transcript, Press conference by the Hon. Alexander Downer MP, Minister for Foreign Affairs at the ASEAN Regional Forum, Singapore, 26 July 1999, < 322 the use of force or the threat to do so, parties were to exercise self-restraint in carrying out activities in the disputed areas and not undertake acts that would cause regional instability. The parties were also to commit themselves to building trust and confidence through refraining from occupying presently uninhabited features in the disputed area, ensuring the just and humane treatment of citizens of other parties who were in the disputed areas, organising dialogues and exchanges among defence and military officials, voluntarily informing other parties of important policies and measures affecting the disputed areas and promoting functional co-operation.61 Both Malaysia and Vietnam gave their qualified support of the text. Indeed, the speed of Malaysia’s positive response took Philippines Foreign Affairs Undersecretary for Policy Lauro Baja by surprise.62 Thailand prepared a consolidated revised draft of the code for the meeting of ASEAN Senior Officials in Bangkok on 9 October 1999. There was agreement to the no new occupations provision but divergence about the area to which the code applied and the proposed freeze on construction or expansion of structures on occupied features. While the Philippines supported the term “South China Sea” to denote the code’s area of coverage, Malaysia argued this was too vague. Kuala Lumpur argued that its ownership of parts of the South China Sea was not in dispute and also the Sea overlapped its territorial waters near Sabah and Sarawak. Malaysia sought to restrict the code’s scope to the Spratly Islands excluding its claimed area. Vietnam proposed the term “disputed areas in the South China Sea”.63 This would enable it to argue that the code applied to the Paracel Islands, which it contests with China and Taiwan. Malaysia’s response merits closer examination. A month prior to the July 1999 AMM it erected a rectangular platform supporting a helipad, several buildings and a 61 Song, “Codes of conduct in the South China Sea and Taiwan’s stand”, pp. 454-55. See also “Positive ASEAN response to proposed code of conduct in the South China Sea noted”, BusinessWorld (Philippines), 14 September 1999. 62 Ibid. 63 “East Asia-ASEAN ‘Declaration on Cooperation’ to be Signed”, World Reporter, 19 October 1999; “Asean warms to Spratlys code of conduct”, Manila Standard, 18 October 1999; Sa-Nguan Khumrungroj, “Malaysia backs South China Sea Code”, The Nation, 10 October 1999. 323 tower with a radar facility on Investigator Shoal.64 (see also Chapter 5.) Prime Minister Mahathir defended the occupation by stating the facilities were within Malaysia’s EEZ and their purpose was to support climate research and marine studies as well as to prevent ship collisions.65 Some commentators suggested, however, that the occupation was retaliation for Philippines President Joseph Estrada’s public support for former Malaysian deputy prime minister Anwar Ibrahim, a motivation denied by Malaysian officials.66 Rather, Mahathir suggested that Malaysia had built the structures because it feared other countries would do so, as had happened on several other reefs in the past.67 China, the Philippines, Taiwan and Vietnam lodged protests against Malaysia’s action.68 Soon after, Malaysia seized Erica Reef. The same parties that claim Investigator Shoal also claim this feature. Predictably they filed protests. The timing of Malaysia’s actions suggested its strategy might have been to occupy the two features before entering into negotiation of the draft code.69 Pre-emptive action to secure the two uninhabited features would not only represent a fait accompli but also forestall criticism that it was acting contrary to the spirit of the negotiation. China may have been reluctant to consider a code of conduct but it could also see that pressure was mounting each time ASEAN leaders and foreign ministers referred to it in their meeting communiqués, and also in the context of the ARF’s discussions. As a proactive measure, in late October 1999 during a meeting in Beijing between Philippines Undersecretary of Foreign Affairs Lauro Baja and Chinese diplomat Wang Yi to discuss confidence-building measures in the Spratlys China proposed its own version of a code 64 The facilities located on the shoal are described in “ASEAN wants support of conduct code in S. China Sea”, Asian Political News, 26 July 1999. 65 “Structure is on Malaysian Territory – Dr. Mahathir”, Bernama, 27 June 1999. See also Rigoberto Tiglao, “Seaside Boom”, Far Eastern Economic Review, 8 July 1999, p. 14. 66 Ibid. 67 “Structure is on Malaysian Territory – Dr. Mahathir”. 68 Tiglao, “Seaside Boom”, p. 14; “Spokeswoman says Spratly Islands Sovereignty Indisputable”, Xinhua, 29 June 1999; Statement of the Ministry of Foreign Affairs, Republic of China, 13 July 1999, < 324 of conduct (reproduced as Appendix III).70 The preamble to the Chinese draft code included statements of general principle, such as each side’s determination to strengthen friendship and co-operation by establishing a partnership of good neighbourliness and mutual trust, recognition of the common benefits of and responsibility for permanent peace, stability and prosperity in southeast Asia and the desire to “establish a peaceful, friendly and harmonious environment in the South China Sea” and to create favourable conditions for a resolution of differences and disputes between the countries concerned.71 The last paragraph of the preamble states that the draft code proceeds from the objectives and principles set forth in the 1997 joint statement between leaders of the ASEAN member states and the President of the People’s Republic of China, resurrecting its position at the July 1999 ASEAN-PMC meeting. Substantively, the Chinese draft code comprised twelve paragraphs.72 It invoked the Charter of the United Nations, the Five Principles of Peaceful Coexistence and principles of international law as the norms governing international relations. These referents, together with equality and mutual respect, were to guide the exploration of ways for building trust and confidence and for resolving peacefully differences or disputes. Parties were to refrain from the use or threat of force, or other action that could affect relations among countries and regional stability. Disputes concerning the Spratly (Nansha) Islands were to be resolved by the sovereign states directly concerned through bilateral consultations and negotiations and in accordance with universally recognised international law, including the LOSC.73 The exercise of self-restraint and the handling of disputes in a considered and constructive manner through diplomatic channels was called for, as well as the avoidance of actions that “will complicate or magnify the disputes.”74 In the spirit of setting aside the disputes and engaging in joint development, the parties were to explore or undertake co-operation in marine environmental 70 “China pushes own draft of regional security code”, Asian Political News, 1 November 1999; Song, “Codes of conduct in the South China Sea and Taiwan’s stand”, p. 454 71 China’s Draft Code of Conduct in the South China Sea, October 1999. 72 Ibid. The following is a summary of the draft code’s provisions. 73 Effectively sidelining Taiwan’s claim and precluding involvement by others, whether non-claimant states or international organisations. 74 China’s Draft Code of Conduct in the South China Sea, Paragraph 5. 325 protection, marine scientific research, safety of navigation and communication at sea, exploration and exploitation of resources, search and rescue operations and combating transnational crimes. The parties were also to develop fisheries co-operation bilaterally and to establish channels for consultation and dialogue. In addition, parties were to refrain from the use or threat of force or using coercive measures, including the seizure, detention or arrest of fishing or other civilian vessels and their nationals, “engaged in normal operation in the disputed areas”.75 Just and humane treatment was to be given to these nationals. Dialogue and exchange of views between senior defence and military officials of the countries concerned were called for. A specific paragraph related to the conduct of military exercises. Parties were to refrain from such activity directed against other countries in the Spratly Islands and their adjacent waters and from “carrying out any dangerous and close-in military reconnaissance. Military patrol activities in the area shall be restricted.”76 Safety of navigation and freedom of navigation of ships and aircraft in normal passage in accordance with international law and the LOSC was affirmed. The parties committed themselves to continue their dialogue to ensure transparency, harmony, mutual understanding and co-operation as well as to adhere to the instrument and take actions consistent with it. The Chinese version received a lukewarm response, especially from the Philippines. In November 1999, Manila presented a third draft of the code prior to the Third Informal Summit of the ASEAN Heads of State/Government in Manila (reproduced as Appendix IV). The text was similar to the September draft. Both Malaysia and Vietnam reiterated their concerns about the geographic scope of the code but eventually agreed to the text on 24 November, removing the last obstacle to ASEAN consensus. The preamble to the document referred to the need to promote a peaceful, friendly and harmonious environment in the South China Sea to enhance regional stability, economic growth and prosperity, the commitment of the parties to the spirit and principles of international law, the United Nations Charter, the LOSC, the TAC, the Five Principles of Peaceful Coexistence and the ASEAN Declaration on the South China 75 Ibid., Paragraph 7. 76 Ibid., Paragraph 9. 326 Sea. In addition, respect for the freedom of navigation and air traffic in the Sea was reaffirmed together with the objective of strengthening the principles and objectives of the 1997 joint statement agreed by the heads of ASEAN countries and the President of China noted.77 The code was to apply to “the disputed areas of the Spratlys and the Paracels in the South China Sea”,78 referred to as “the Disputed Area.”79 Substantively, the draft code comprised seven paragraphs. First, the parties agreed to resolve sovereignty and jurisdictional disputes in the disputed area by peaceful means, eschewing the use of force or threat of use of force consistent with recognised principles of international law, including the LOSC. Second, the occupation or erection of structures on presently uninhabited islands, reefs, shoals, cays and other features in the disputed area was to be avoided. Third, self-restraint was to be exercised concerning activities that affect peace and stability in the disputed area and differences are to be handled constructively. Fourth, the parties were to intensity efforts to find a “comprehensive and durable solution to the disputes over the Disputed Area”.80 Without prejudice to existing sovereignty and jurisdictional claims they undertook to build trust and confidence by holding dialogues and exchanges of views among defense and military officials, voluntarily informing other parties of significant policies and measures that affected the disputed area and ensuring just and humane treatment of nationals of other parties who were either in danger or distress in the disputed area. Fifth, the parties could explore or carry out activities in the disputed area covering marine environmental protection, marine scientific research, safety of navigation and communication, search and rescue and combating transnational crime. Bilateral and multilateral co-operation was to be agreed upon before an activity was launched. Sixth, the parties agreed to hold consultations and dialogues concerning the disputed area, including on the observance of the code. Finally, other countries and international organisations were invited to subscribe to the principles of the code. 77 ASEAN’s Draft Code of Conduct in the South China Sea, 25 November 1999, Preamble. 78 Ibid. 79 Ibid. 80 Ibid., Paragraph 4. 327 China declined to endorse the ASEAN draft code at a senior officials meeting on 25 November81 but did agree to use it as a basis for further discussion restricted to the two sides.82 This suggested China’s insistence on bilateral discussion of the dispute was elastic; it could mean dialogue between two countries or between China and ASEAN as an entity. The Chinese side indicated it would not be rushed into signing a code, with foreign ministry spokesman Zhu Bangzhao citing major differences between China and other parties and new obstacles erected by the latter.83 The differences centred on four points.84 First, the ASEAN draft code included both the Spratly and Paracel Islands within the definition of the “disputed area”. China considered the code should apply only to the Spratlys because the Paracels were a bilateral dispute between it and Vietnam. Second, the ASEAN draft proposed no new occupation of or construction on presently uninhabited features. This provision was absent in the Chinese version of a code. Third, the Chinese draft called on parties to refrain from conducting military exercises directed against other countries in the Spratly Islands area and their adjacent waters, from carrying out close-in military reconnaissance and restricting patrol activities in the area. This was a veiled reference to America’s intelligence gathering flights and military exercises with its allies. Fourth, the ASEAN draft referred in broad terms to the just and humane treatment of nationals of other parties in danger or distress in the disputed area. China’s proposal on the other hand only mentioned the treatment of fishing or other civilian vessels and their crew. At the Third Informal Summit of ASEAN leaders held in Manila on 28 November 1999 China and ASEAN reaffirmed their support for a regional code of conduct. ASEAN presented its consensus text to China for endorsement. Beijing 81 “Joseph Brady, “China Snubs Island Peace Code”, Sydney Morning Herald, 27 November 1999; David Willis, “Chinese hard line on Spratlys”, BBC News, 27 November 1999; Jeerawat Na Thalang. “China rejects ASEAN draft code”, The Nation, 26 November 1999; “PRC Objections Thwart Spratlys Deal at ASEAN Summit”, World Reporter, 25 November 1999. 82 Vaudine England, “Spratlys behaviour code hinges on China”, South China Morning Post, 26 November 1999; “China Okays Further Consultations on Draft Code of Conduct on S. China Sea”, Bernama, 26 November 1999; “China agrees to talks with Southeast Asia group on South China Sea code”, BBC Worldwide Monitoring, 25 November 1999. 83 “China won’t be rushed into signing Spratlys code”, Muzi Lateline News, 26 November 1999. 84 See also Song, “Codes of conduct in the South China Sea and Taiwan’s stand”, p. 455. 328 declined to do so. Paragraph 10 of the Chairman’s Press Statement noted that ASEAN had developed a draft regional code of conduct and that further consultations would be undertaken to support its adoption.85 This meant discussion with China. Following the informal summit Chinese officials stressed that Beijing had not rejected the idea of a code of conduct. For example, during his visit to Singapore immediately after the summit Chinese Premier Zhu Rongji stated that Beijing had adopted a positive and supportive attitude towards the code and had not rejected signing such a document.86 Indeed, the Chinese called for in-depth negotiations with ASEAN to begin.87 By the end of 1999, development of a code of conduct was in transition from the first to second phase. The related to two areas. First, the shift from a unilateral (ASEAN and China preparing separate drafts of a code) to a bilateral (ASEAN and China working on a consolidated text) focus. For ASEAN the first phase saw a crystillisation of the code from concept to text. China’s view of a code of conduct underwent a perceptible shift, especially between April and October 1999. Initially it opposed the development of such an instrument, promoting the 1997 Joint Statement of ASEAN leaders and the President of China as sufficient to guide the behaviour of the claimants. By October 1999 it had shifted its position. It presented its own version of a code, albeit one that excluded issues that ASEAN felt strongly about such as a moratorium on new occupations and expansion of existing structures. China’s shift indicated it was pragmatic, recognising that its initial position was inadequate. China’s refusal to endorse ASEAN’s November 1999 draft code was variously portrayed as a “hard line” stance88, a “snub”89 and the behaviour of a “bully up to mischief again”.90 From China’s perspective, however, several factors militated against endorsing the ASEAN draft. 85 Chairman’s Press Statement on ASEAN 3rd Informal Summit, Manila, Philippines, 28 November 1999, Paragraph 10, < 329 First, it did not incorporate key proposals from China’s October version. Indeed, China believed that ASEAN had not responded formally to its October draft.91 Second, China was being asked to endorse a text to which it had been a party in its development. Despite these problems China indicated its willingness to engage in further talks with ASEAN to narrow their differences and reiterated its offer to shelve the dispute and jointly develop the Spratlys.92 The second aspect of the transition related to the change in channels of interaction, reflecting the shift from the code as a concept to negotiation of a specific text. During phase one reciprocities between the formal (‘track one’) and informal (‘track two’) channels were evident. The formal channel was the inter-governmental ASEAN-China dialogue while the informal included the Workshop on Managing Potential Conflicts in the South China Sea and its Technical Working Group on Legal Matters. For example, the second (held in Chiang Mai, Thailand, 12-16 May 1997), third (Pattaya, Thailand, 12-16 October 1998), fourth (Koh Samui, Thailand, 27-18 September 1999) and fifth (Cha Am, Thailand, 31 October-4 November 2000) meetings of the TWG-LM considered the concept and elements of a code of conduct.93 Given that participants included government officials attending in their personal capacity there was scope to inject the deliberations of these meetings into the ‘track one’ discussions, and vice-versa. The Council for Security Cooperation in the Asia Pacific (CSCAP) has also played a role. From its establishment in 1995 CSCAP’s Maritime Cooperation Working Group has included discussion of the South China Sea dispute on its agenda. The summary report of the group’s first meeting notes that: 91 See remarks attributed to Chinese foreign affairs spokesman Zhu Bangzao cited in Porter, “Beijing still wants to see Spratly code”. 92 On this offer see ibid. 93 Song, “Codes of conduct in the South China Sea and Taiwan’s stand”, p. 451 and p. 453; Statements, The Technical Working Group on Legal Matters in the South China Sea, South China Sea Informal Working Group, University of British Columbia, Canada, “Meeting Statements”, < 330 • The problems of conflicting maritime territorial claims in the Asia-Pacific region – particularly in the South China Sea – are destabilising to regional security. Hence the need to establish mechanisms to manage these disputes. • The difficulties in resolving territorial problems have wider consequences since they involve further questions of extended maritime jurisdiction. The less contentious issues, such as problems pertaining to resource competition, rather than sovereignty issues may be easier. • In particular, the problems relating to the Spratly Islands need to be considered within the overall context of regional maritime security.94 This working group provided an additional informal platform for discussion of a code of conduct in the South China Sea, with deliberations fed into the ARF’s Maritime Cooperation Inter-Sessional Group meetings. Participants in the working group recognised that other forums were discussing the dispute in detail and that the body’s unique contribution lay in the broader area of promoting comprehensive maritime co- operation in the region.95 Despite a number of achievements, the implementation of track two diplomacy in the Asia-Pacific faces several problems. They relate to issues of independence and innovation associated with blurring of the distinction between official and non-official channels, funding, inter-penetration of agendas, encouragement/discouragement of ‘policy-relevant’ studies, the narrow state-centric focus of the security discourse and the club-like exclusivity of the forums with their largely unchanging cast of participants.96 Some of these issues apply also to discussion of the South China Sea/Spratly Islands dispute within CSCAP and its Maritime Cooperation Working Group. For example, one 94 Sam Bateman and Stephen Bates (eds), Calming the Waters. Initiatives for Asia Pacific Maritime Cooperation, Canberra Papers on Strategy and Defence No. 114, Strategic and Defence Studies Centre, Research School of Pacific and Asian Studies, The Australian National University, Canberra, 1996, pp. 185-86. 95 Ibid., p. 5. Note, however, that the broader ambition risks being unfulfilled despite the conclusion of several memoranda on various aspects of maritime co-operation. See Sheldon W. Simon, “Evaluating Track II approaches to security diplomacy in the Asia-Pacific: the CSCAP experience”, The Pacific Review 15(2), 2002, p. 182 and pp. 190-91. 96 Herman Joseph S. Kraft, “The Autonomy Dilemma of Track Two Diplomacy in Southeast Asia”, Security Dialogue 31(3), 2000, pp. 346-49; Simon, “Evaluating Track II approaches to security diplomacy in the Asia-Pacific”, p. 172, p. 189 and p. 190. 331 of China’s conditions for agreeing to enter CSCAP was no discussion of the disputed sovereignty claims in the South China Sea.97 7.3 Phase II: Negotiating a Consolidated Draft Code of Conduct, 2000-2001 To launch the process of preparing a consolidated draft code an informal consultation between ASEAN and China took place at Hua Hin, Thailand on 15 March 2000. Both sides agreed that the code should be non-binding and establish guidelines to manage the behaviour of parties.98 Consensus was reached on the need for a code and key elements to be included in it, although no details were discussed.99 Agreed elements included reference to the principles of the United Nations Charter, the Five Principles of Peaceful Co-existence, the TAC and the LOSC. Reference to confidence-building measures and areas of co- operation was also agreed to, “starting with those that are least controversial and easiest to implement.”100 Such measures could include consultations and dialogues, including among defence officials, information exchange, the humane and just treatment of each other’s nationals and functional co-operation. In addition, it was agreed that no new occupation of presently uninhabited features in the South China Sea should occur. One commentator suggests that because this could be construed domestically in China as a concession the political leadership sought to justify it by indirect means. This relied on an argument that to promote the country’s economic modernisation a peaceful regional environment and good neighbourly relations were essential. However, this did not mean that China was 97 Ibid., p. 195. 98 Bhanravee Tansubhapol, “Code for sea disputes takes shape: Guidelines seen as vital for Spratlys”, Bangkok Post, 16 March 2000. 99 The following is a summary of “Press Release. ASEAN and China Held a Successful Consultation on Regional Code of Conduct in the South China Sea.” See also Song, “Codes of conduct in the South China Sea and Taiwan’s stand”, p. 456. 100 Press Release. ASEAN and China Held a Successful Consultation on Regional Code of Conduct in the South China Sea. 332 relinquishing any part of its claim in the South China Sea; it was merely deferring its enforcement of it.101 Another reason why China could agree to the provision was that it froze the status quo, ruling out occupation by others of Scarborough Shoal which Beijing considers of strategic importance.102 Subsequently, at the sixth meeting of the ASEAN-China Senior Officials Consultation held in Kuching, Malaysia on 25-26 April 2000 it was agreed to establish a joint working group to prepare specific text and negotiate the substance of the code.103 The first meeting of this group, the Working Group of the ASEAN-China Senior Officials Consultations on the Code of Conduct, took place a month later in Kuala Lumpur and prepared a consolidated working draft as a basis for further discussion.104 China conceded several points in its October 1999 draft. It agreed to the deletion of references to, first, the avoidance of military exercises and patrols in the Spratly Islands and their adjacent waters and, second, parties to refrain from the use or threat of force or application of coercive measures against fishing boats or other civilian vessels and their crew.105 Differing positions remained on the geographic scope of the code and the text on the no-new-occupation provision, however.106 Concerning the former, China opposed including the Paracels within the geographical area to which the code should apply while Vietnam argued for its retention. China also raised an objection about the use of the term “occupation”, stating that in Chinese it meant an illegal activity.107 Beijing was also concerned about the retrospective application of the provision to the features it occupied108, mindful of the controversy surrounding its recent occupation of and consolidation on Mischief Reef. Nonetheless, China’s foreign ministry spokesman Zhu 101 Interview with Chu Shulong, Professor, Department of International Relations, Tsinghua University, Beijing, October 2001. 102 Interview with Zhiguo Gao, Executive Director, State Oceanic Administration, Beijing, October 2001. 103 “China now open to Spratlys code”, Philippine Daily Inquirer, 2 May 2000. 104 “Positive step toward an ASEAN-China code of conduct in the South China Sea”, < 333 Bangzao reaffirmed Beijing’s interest in concluding a code: “We are ready to reach a code of conduct acceptable to all countries, to all parties concerned.”109 ASEAN foreign ministers and their counterparts attending the seventh meeting of the ARF in July 2000 reciprocated this sentiment. They commended the progress made by ASEAN and China towards a code of conduct and the development of a consolidated draft.110 China’s Foreign Minister Tang Jiaxuan raised expectations by expressing optimism that the code could be concluded before the end of the year111 as did Vietnam’s Ambassador to the Philippines, Nguyen Thac Dinh.112 A further meeting of the working group took place on 24-25 August 2000 in Dalian, China. Little progress was made.113 Philippines Undersecretary for Foreign Affairs Lauro Baja attributed this to all officials taking part in the meeting lacking a mandate.114 In this context, he proposed that the ASEAN SOM take up the matter at their meeting in Hanoi in October.115 China’s foreign ministry spokesman Zhu Bangzao attempted to deflect criticism by calling on parties to show political sincerity and flexibility, and noted that in hosting the meeting China had reinforced its good faith and active participation in the development of the code.116 Zhu stated that a narrowing of differences between the two sides on the content of the code was evident and he reiterated that it was a political document aimed at promoting good neighbourly friendship and regional stability rather than a legal document for resolving disputes.117 109 “FM Spokesman on Territorial Disputes in South China Sea”, Agence France-Presse, (Beijing), 13 July 2000. 110 See Joint Communique of the 33rd ASEAN Ministerial Meeting, Bangkok, Thailand, 24-25 July 2000, Paragraph 24, < 334 Song notes an important nuance on the latter point. Even though a code of conduct at the international level is generally considered to be a political document rather than having legal binding force, “if certain parts of a bilateral or multilateral code of conduct are based on relevant rules of international law, they will have binding effect on the parties that sign or agree to the code.”118 As he goes on to note, the draft code of conduct for the South China Sea contains references to several legal instruments that confer obligations on states party to them: the United Nations Charter, the LOSC, the TAC, the 1995 ASEAN Declaration on the South China Sea, the 1995 joint statement of China-Philippines consultations on the South China Sea and other areas of co-operation, the 1997 joint statement of ASEAN-China Co-operation and the 1998 Hanoi Plan of Action.119 Accordingly, although the code: if adopted, would be a voluntary political document governing the concerned states’ behaviour in the Spratlys/South China Sea area, it would also have binding legal effect on the parties concerned to the extent that it embodies the provisions of other binding instruments.120 Following the disappointing results of the Dalian meeting, the Philippines indicated to China that it would scuttle work on the draft code if the latter did not agree to a no-new-occupation provision.121 Undersecretary Baja stated “[t]here must be specific mention on the principle of no new occupation. Otherwise, [we] don’t want a written code of conduct.”122 The third meeting of the Working Group of the ASEAN- China Senior Officials Consultations on the Code of Conduct held in Hanoi on 11 October 2000 did not achieve a breakthrough on this issue nor on the definition of the geographical area to which the code should apply. Consensus was limited to general principles on the peaceful resolution of disputes, the non-use of force, avoidance of acts that might affect adversely regional peace and stability and co-operation in a number of 118 Song, “Codes of conduct in the South China Sea and Taiwan’s stand”, p. 450. 119 Ibid., p. 451. 120 Ibid. 121 “Philippines for “no occupation” provision in Spratlys code”, The Times of India, 11 October 2000. 122 Ibid. 335 functional areas. Zhu Bangzao of China’s foreign ministry stated that Beijing had shown “maximum sincerity and flexibility” in negotiating the code but the major impediment to its finalisation was certain ASEAN members holding different views on its scope.123 This referred to Vietnam’s insistence on including the Paracels in the code’s coverage. Malaysia joined with China in opposing this124 even though Kuala Lumpur had no direct interest in the island group. The impasse at the Hanoi meeting precluded any hope of Chinese Premier Zhu Rongji and ASEAN leaders signing the code at the November 2000 ASEAN+3 Summit in Singapore.125 In his remarks to the meeting, however, Zhu noted the positive progress in developing a code and expressed Beijing’s desire for an early conclusion to the consultations.126 The press statement issued by the Chair of the Summit made no comment about the code. Further discussion of the code did not occur until March 2001 when the ASEAN SOM convened in Ho Chi Minh city, Vietnam. Delegates agreed to deepen bilateral and multilateral talks with the aim of concluding an early agreement with China on the code.127 ASEAN Secretary-General Rodolfo Severino was more specific, expressing optimism that the code could be finalised by November.128 However, despite a further meeting of the working group charged with developing the code in June in Boao on China’s Hainan Island a resolution to the outstanding problems proved elusive. In an effort to break the deadlock, in July the Philippines presented a new draft code at an ASEAN SOM held before the thirty-fourth AMM in Hanoi in July 2001. This called on parties to exercise self-restraint, including refraining from inhabiting presently 123 “China Calls for Early Finalization of South China Sea Code of Conduct”, Xinhua, 17 October 2000. 124 Achara Ashayagachat, “Deal on South China Sea not to be signed”, Bangkok Post, 22 November 2000. 125 The ASEAN+3 dialogue brings together ASEAN members, China, Japan and South Korea. 126 “China pushes peace, mum on Spratlys”, The Times of India, 26 November 2000, < 336 unoccupied features and to handle their differences constructively. The text contained no reference to the geographical coverage of the instrument.129 Malaysia’s Foreign Minister Syed Hamid Albar stated that the code was intended to focus on the disputed areas in the Spratlys, “[s]o why must you expand it?”130 The joint communique from the ministerial meeting merely welcomed progress in ASEAN-China consultations on the code rather than signaling a conclusive outcome,131 attesting to the inability of ASEAN to reach consensus. China was not a disinterested party to this debate since it opposed inclusion of the Paracels in the code’s scope. In reaffirming its support for a code China portrayed its co-operative stance and willingness to quickly conclude the instrument as being held hostage by ASEAN’s internal differences.132 According to Fu Ying, Director-General of the Department of Asian Affairs in China’s Ministry of Foreign Affairs, whether the code covered the South China Sea or just the Spratly Islands, “[f]or China, both are OK but some ASEAN countries have differences among themselves. I don’t know yet if there will be a final conclusion but I think it’s near, it’s not very difficult.”133 During President Arroyo’s visit to Beijing in late October 2001 both she and President Jiang Zemin reaffirmed their support for a code of conduct and agreed there should be no provocative action in the Spratlys.134 They also agreed to identify specific projects for joint development, possibly including marine conservation and oil exploration. 129 “Philippines bends to diluted S. China Sea code of conduct”, Kyodo News, 18 July 2001. 130 “China, ASEAN working on code of conduct to ease tensions in South China Sea”, World Reporter, 26 July 2001. 131 See Joint Communique of the 34th ASEAN Ministerial Meeting, Hanoi, 23-24 July 2001, Paragraph 20, < 337 Neither the Seventh ASEAN Summit nor the follow-on Fifth ASEAN+3 Summit held on 5-6 November 2001 in Brunei discussed the draft code of conduct in any depth.135 Nonetheless, Zhu Rongji reiterated China’s preparedness for an early conclusion to consultations with ASEAN on the code.136 7.4 Phase III: Declaration on the Conduct of Parties in the South China Sea, 2002 Continuing disagreement about the geographic scope of the draft code impeded any progress in the early part of 2002. China opposed the compromise wording developed by the Philippines to allay Malaysia’s concern that the code’s scope could include its non-disputed areas in the South China Sea. As reported, this wording read: We hereby adopt the Code of Conduct without prejudice to the territorial or maritime jurisdictions or regimes recognized under the United Nations Convention on the Law of the Sea or other internationally recognized principles of international law.137 During the annual Philippines-China bilateral dialogue, held in Beijing in the first week of July, China’s Deputy Foreign Minister Wang Yi indicated that it could not agree to the inclusion of the phrase “territorial or maritime jurisdictions or regimes.”138 In an effort to break the impasse, in mid-July Malaysian Foreign Minister Syed Hamid Albar indicated that at the thirty-fifth AMM in Brunei on 29-30 July 2002 he 135 For example, the press statement by the Chairman of the Seventh ASEAN Summit and the Three ASEAN+1 Summits merely notes “[o]n the South China Sea, we reaffirmed our resolve to address the issue through dialogue and consultations.” Press Statement by the Chairman of the 7th ASEAN Summit and the Three ASEAN+1 Summits, 6 November 2001, Bandar Seri Begawan, < 338 would propose a new instrument: a declaration of conduct in the South China Sea.139 In his view this would declare ASEAN’s position and signal that it was doing something to ease tension,140 which had been fuelled by the release in March of a report prepared by the Philippines military alleging China was continuing to bolster its claim through continued construction on occupied features while simultaneously using negotiations to build up hopes of a peaceful settlement.141 One motivation for Malaysia’s initiative may have been to reinforce its informal leadership aspirations in ASEAN. Although the Philippines had spearheaded the drafting of a code of conduct on the ASEAN side progress had stalled despite three years of negotiations. Success through a non-binding declaration would strengthen Malaysia’s informal leadership credentials within ASEAN at a time when Indonesia’s grip was on the wane following the departure of President Soeharto (see Chapter 6). Malaysia’s push for the establishment of an ASEAN+3 secretariat in Kuala Lumpur coupled with its offer of $10 million to build its offices and to fund its operations for the first five years could also be considered within this context.142 On 24 July 2002 officials from ASEAN and China met in Brunei to again discuss the consolidated draft code of conduct. Philippines Foreign Affairs Undersecretary Lauro Baja indicated that if the talks were inconclusive Manila would consider standing down from the facilitator role it had carried out over the past three years. In his view, “[t]his will be … a make or break session.”143 139 “Malaysia Toying with Idea of Declaration to Solve Disputed Areas”, Bernama, 23 July 2002; “Malaysia seeks “code of conduct” for Spratlys, Reuters, 24 July 2002. 140 Ibid. 141 Dario Agnote, “China continues to fortify claims in disputed Spratlys”, Kyodo News, 12 July 2002. A rebuttal by China of the Philippines report is “China Denies Report It’s Bolstering S. China Sea Claims”, Dow Jones International News, 17 July 2002. 142 At the thirty-fifth AMM held in Brunei in July 2002, Indonesia, Singapore and Thailand opposed the establishment of a new secretariat. See Tim Dodd, “As Ever, Disunity is in the Detail”, Australian Financial Review, 31 July 2002; Brendan Pereira, “Asean fears a new secretariat will dilute group”, The Straits Times, 30 July 2002; “ASEAN Rift May Thwart Malaysia’s Designs on Regional Power”, 31 July 2002. < 339 A working dinner of ASEAN senior officials was held on 25 July. Malaysia’s Foreign Ministry Secretary-General, Ahmad Fuzi Abdul Razak, proposed replacing the draft code with a non-binding political Declaration on the Conduct of Parties in the South China Sea.144 Malaysia’s Foreign Minister Syed Hamid Albar formally introduced the declaration proposal at the ministerial meeting. This acknowledged that there had been no breakthrough on the issue of the code’s coverage.145 In Ahmad Fuzi Abdul Razak’s view calling the proposed instrument a declaration rather than a code “would be easier for [ASEAN] member countries to support and accept” and be “least objectionable to all the countries, particularly the claimant countries.”146 Some countries considered Malaysia’s proposal favourably but both the Philippines and Vietnam requested time to study it further.147 The former proposed inclusion of text that the declaration’s provisions would not be prejudicial to territorial claims and maritime regimes or jurisdictions recognised under the LOSC,148 which was accepted. Vietnam argued, unsuccessfully, for the document to be titled a declaration on a code of conduct in the South China Sea.149 The proposed declaration was similar in content to the consolidated draft code. It affirmed respect for the freedom of navigation and overflight in the South China Sea, the resolution of disputes relating to sovereignty and jurisdiction by peaceful means without resort to the use or threat of the use of force and the exercise of self-restraint in the conduct of activities that would complicate or escalate disputes and affect regional peace and stability. Differences were to be handled in a constructive manner. In addition, parties were to avoid inhabiting presently uninhabited features, implement measures to build trust and confidence by holding regular dialogues among concerned officials, notify each other of forthcoming military exercises in the area, ensure just and humane 144 Saiful Azhar Abdullah and Sheridan Mahavera, “Breakthrough in island claims”, Business Times, 27 July 2002; Jasbant Singh, “ASEAN weighs scaled-back code of conduct over Spratly disputes”, Associated Press, 26 July 2002. 145 “ASEAN Countries Agree to Study Malaysia’s Proposal on Spratlys”, Bernama, 26 July 2002 146 Ibid. 147 Ibid.; Singh, “ASEAN weighs scaled-back code of conduct over Spratly disputes”. 148 Martin Abbugao, “Rules of behaviour in South China Sea lack legal bite”, Agence France-Presse, 27 July 2002. 149 “ASEAN vows to work with China on South China Sea Code”, Agence France-Presse, 29 July 2002. 340 treatment of each other’s nationals who are in danger or distress and to co-operate in marine environmental protection, marine scientific research, safety of navigation, search and rescue and combating transnational crime. The term “disputed areas in the South China Sea” was used to denote the geographic coverage of the declaration rather than reference to the Spratlys or Paracels or the South China Sea as a whole. As one ASEAN diplomat noted, the compromise wording meant that “[e]ach member could have their own interpretation.”150 The phrase “without prejudice to territorial claims or maritime jurisdictions or regimes” was retained despite China’s earlier signal that it opposed this wording. ASEAN officials recognised the proposed declaration represented a dilution from a code. Nonetheless, they considered it a breakthrough, setting requirements on parties that were at least morally binding.151 As Malaysia’s Foreign Minister Syed Hamid Albar put it: There must be some rules of engagement or rules of procedure. If there is, so why must we do it in the form of a legal document which is so difficult even to define what is the geographical (scope) … what is the thing in dispute. (So) Malaysia [sic] suggestion, why can’t it (Malaysian proposal) be more acceptable? It contains the same thing … the Code of Conduct in term [sic] of procedures and call it a declaration which is a political document.152 He reinforced this latter remark in noting: “Declaring is a very clear statement on how the parties conduct themselves with respect to the South China Sea. So I think it is an important political statement or commitment politically by all the countries concerned.”153 150 Brian Rhoads, “ASEAN moves on pact to ease South China Sea tension”, Reuters, 27 July 2002. 151 Abbugao, “Rules of behaviour in South China Sea lack legal bite”; Marc Lerner, “ASEAN reaches Spratlys consensus”, The Washington Times, 29 July 2002. 152 “Claimant countries Accept Malaysia’s Declaration”, Bernama, 28 July 2002. 153 Takehiko Kajita and Puy Kea, “ASEAN wants to issue document on S. China Sea with China”, Kyodo News, 29 July 2002. 341 The thirty-fifth ASEAN Ministerial Meeting on 29-30 July 2002 considered the declaration proposal. In the meeting Malaysia’s Foreign Minister noted that “we cannot approve a code of conduct but we can approve a declaration that stipulates a code of conduct. It is a finality or nothing at all.”154 However, ministers were unable to sign the declaration because of disagreement about its wording, a desire for more time to study the text and the inability to obtain approval expeditiously from all member governments.155 Vietnam reiterated its earlier opposition to the title of the document and also argued that a code of conduct would have stronger legal force. It eventually conceded both points but requested time to re-examine some of the terms in the proposed declaration.156 As a result, Paragraph 40 of the joint communique from the meeting was ambiguous. It stated, inter alia, that foreign ministers: reaffirm that the adoption of a code of conduct in the South China Sea would further promote peace and stability in the region and agreed to work towards a Declaration on the Conduct of Parties in the South China Sea. In this regard, we agreed to work closely with China with a view to adopting the Declaration.157 The first sentence was ambiguously worded because of an inability to resolve contending positions about the status of the code vis-à-vis the declaration. In particular, whether the code was supplementary to or superceded by the declaration. On the one hand, Vietnam considered a code of conduct the ultimate goal and the declaration was a step towards this.158 On the other hand, countries like Malaysia seemed to consider a declaration as an end in itself and the best that could be achieved.159 The obfuscation of the first sentence of Paragraph 40 reinforced a perception of ASEAN members in 154 “Consensus on South China Sea code”, Business Times, 30 July 2002. 155 See Martin Abbugao, “ASEAN to continue work on South China Sea declaration despite setback”, Agence France-Presse, 30 July 2002. 156 “Signing of South China Sea declaration put off”, Borneo Bulletin, 30 July 2002. 157 Joint Communique of the 35th ASEAN Ministerial Meeting, Bandar Seri Begawan, 29-30 July 2002, Paragraph 40, < 342 disarray on the issue.160 Indeed, the Chair of the AMM, Brunei’s Foreign Minister Prince Mohamed Bolkiah was unable to explain the reasons for the shift from a code to a declaration.161 The change in title from a code to a declaration was more than semantic. It signaled a dilution in political will among ASEAN members to conclude an instrument that had some ‘bite’. In stressing the morally binding nature of the declaration, ASEAN officials accentuated the positive. They overlooked the negative, which was the lack of a mechanism to deal with non-compliance. ASEAN’s inability to project a unified voice against China’s reinforcement of its structures on Mischief Reef in 1998 in spite of a code of conduct between the Philippines and China was an obvious recent example. The shift to a declaration was also symptomatic of an inability within ASEAN to accommodate the objections of Malaysia and Vietnam. The compromise wording of Paragraph 40 of the joint communique kept alive the code of conduct idea162 but it also underscored the disunity within ASEAN. Meeting in Hanoi on 11 September 2002 parliamentarians attending the ASEAN Inter-Parliamentary Organisation called for the revival of the code of conduct, with a declaration being a preparatory step towards this ultimate goal.163 China responded pragmatically to the declaration proposal. Foreign Minister Tang Jiaxuan indicated that although Beijing would review the draft document before commenting, it was immaterial whether it was called a code, declaration or resolution. Rather, in his view “What matters are the contents”.164 During discussion of the declaration in the ASEAN-China Post Ministerial Conference on 31 July 2002 China indicated that it accepted the principle of a declaration instead of a code but reiterated 160 See also Barry Wain, “Asean Faces Difficulty in Beijing Negotiations – Divisions Within Group Block Consensus on Code For the South China Sea”, The Asian Wall Street Journal, 1 August 2002. 161 Ibid. 162 Pereira, “Spratlys conduct code worries Hanoi”. 163 “ASEAN Group Revives Notion of Treaty for South China Sea”, Associated Press, 11 September 2002. 164 Ted Anthony, “Chinese foreign minister takes wait-and-see attitude on Spratlys document”, Associated Press, 30 July 2002. 343 that it wanted to consider the detail. Following ASEAN’s inability to find consensus on the wording of the declaration at the preceding AMM, the Chinese were aware that this internal problem had first to be overcome before any negotiation between the two sides could commence. From China’s perspective, this removed any urgency to commit itself to the declaration. Nonetheless Beijing would not have been unhappy with the shift in emphasis: a diluted, non-binding political declaration was more in line with its original push for general guidelines rather than a code of conduct with more precise wording and stronger legal force. Stemming from these developments, the Chairman’s Statement from the ninth meeting of the ARF on 31 July reflected the ambiguous text of Paragraph 40 of the AMM joint communique. Paragraph 20 of the Chairman’s Statement noted that the adoption of a code of conduct would further promote peace and stability in the region, recorded the agreement of ASEAN members to pursue a declaration as a new approach and welcomed the organisation’s determination to work closely with China on the matter. In addition, the parties’ continued commitment to exercise self-restraint and to resolve peacefully disputes in the South China Sea in conformity with international law including the LOSC was welcomed.165 China’s position became clearer during Li Peng’s 12-15 September visit to the Philippines. Li expressed to Philippines House of Representative Speaker Jose de Venecia Beijing’s willingness to sign a code of conduct, with the schedule and date of the signing to be determined by the foreign ministers of ASEAN member states and China.166 In the joint statement issued after their meeting they reaffirmed their commitment to a peaceful settlement of the dispute and “pledged their continued 165 Chairman’s Statement, Ninth Meeting of the ASEAN Regional Forum, Bandar Seri Begawan, 31 July 2002, Paragraph 20, < 344 endeavor to seek an early acceptance of the proposed Code of Conduct in the South China Sea by China and the ASEAN countries.”167 ASEAN senior officials endorsed the declaration at their meeting on 31 October in Phnom Penh.168 China gave its assent on 1 November.169 This paved the way for the signing of the document at the ASEAN-China Summit on 4 November 2002 by ASEAN foreign ministers and China’s Vice-Minister of Foreign Affairs, Wang Yi. The declaration is reproduced as Appendix V. Comprised of a preamble and ten substantive paragraphs, the Declaration’s main text begins by reaffirming the parties’ commitment to the United Nations Charter, the LOSC, the TAC, the Five Principles of Peaceful Coexistence and other universally recognised principles of international law.170 Freedom of navigation in and overflight above the South China Sea are affirmed. Territorial and jurisdictional disputes are to be resolved by peaceful means without resort to force through consultations and negotiations by sovereign states directly concerned. The parties are to exercise self- restraint to avoid complicating or escalating disputes, including refraining from inhabiting presently unoccupied features and handling their differences in a constructive manner. Measures to build trust and confidence are encouraged, such as dialogue and exchange of views between defence and military officials, ensuring just and human treatment of all persons in danger or distress, notifying other parties on a voluntary basis of any impending joint military exercises and exchanging relevant information. The parties may explore or undertake co-operative activities in areas such as marine environmental protection, marine scientific research, safety of navigation and 167 Joint Press Statement of the Standing Committee of the National People’s Congress of the People’s Republic of China and the House of Representatives, Congress of the Republic of the Philippines, Xinhua, 14 September 2002. 168 Mergawati Zulfakar, “Consensus on code of conduct”, The Star, 2 November 2002. 169 Mergawati Zulfakar, “Asean and China to sign declaration on Spratlys”, The Star, 3 November 2002; “China Backs Spratly Islands Accord”, Associated Press, 2 November 2002; Muin Abdul Najib and Tham Chow Lin, “ ASEAN, China to Seal South China Sea Declaration”, Bernama, 2 November 2002. 170 Declaration on the Conduct of Parties in the South China Sea, 4 November 2002, < 345 communication at sea, search and rescue and combating transnational crime. The modalities, scope and locations of bilateral and multilateral co-operation should be agreed upon by the parties concerned before being implemented. Dialogue on compliance with the declaration is anticipated. Finally, a code of conduct is identified as the eventual goal with the parties committing themselves to work towards this on the basis of consensus. Claimants and non-claimants hailed the signing of the declaration. President Arroyo claimed it was a “major Philippine success”171 while Foreign Minister Blas Ople considered it provided “a strong foundation for future negotiations with China and our other ASEAN partners on maritime security and territorial issues.”172 Prime Minister Mahathir of Malaysia acknowledged the declaration might have been less than some had hoped but argued it was “a good agreement”.173 China expressed satisfaction with the outcome, its signatory Vice Foreign Minister Wang Yi stating the declaration would “send a positive signal to the outside world that China and ASEAN have full capability to resolve disputes among themselves, peacefully through dialogue”174 and that “is a symbol that would lead to new relations between China and ASEAN.”175 Premier Zhu Rongji also described it as an important advance in relations between the two sides, marking a higher level of political trust that would contribute to regional peace and stability.176 Australia’s Foreign Minister Alexander Downer welcomed the agreement and encouraged all parties to meet their commitments under it.177 171 Quoted in Genalyn D. Kabiling, “Accord on China Sea dispute hailed”, Manila Bulletin, 4 November 2002; Dona Pazzibugan, “Spratly pact hailed as RP success”, Philippine Daily Inquirer, 4 November 2002. 172 Department of Foreign Affairs, The Philippines, “Ople Lauds Signing of Declaration on the Conduct of Parties in the South China Sea”, Press Release No. 246-02, 4 November 2002, < 346 From a strategic perspective conclusion of the declaration enabled ASEAN and China to re-focus on the economic dimension of their relationship.178 This was affirmed by the signing on the day after the declaration had been concluded of a Framework Agreement on Comprehensive Economic Co-operation between the Association of South East Asian Nations and the People’s Republic of China. The goal of the agreement is the establishment of an ASEAN-China free trade area phased in over two periods: by 2010 for China, Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand and by 2015 for Cambodia, Laos, Myanmar and Vietnam.179 Commenting on the Summit outcomes, Cambodian diplomat and session chair of the negotiating group on the declaration, Dr. Chem Widhya characterised the free trade agreement the economic pillar of ASEAN-China ties and the South China Sea declaration the political pillar.180 Several weaknesses are apparent in the declaration. First, the area to which the code applies is unidentified: the entire South China Sea, the Paracel and Spratly Islands, only the Spratly Islands. Second, reference to resolving territorial and jurisdictional disputes through consultation and negotiation by sovereign states directly concerned excludes Taiwan. Taipei’s foreign ministry quickly issued a statement reaffirming its claim in the South China Sea and its willingness to set aside the sovereignty issue and undertake joint development. It also expressed its protest and discontent to ASEAN and China for ignoring Taiwan’s rights and for signing the declaration without inviting it to participate in the discussion.181 The reference to states directly concerned rules out any intervention by non-claimant ASEAN states such as Indonesia, Singapore or Thailand, extra-regional states such as Japan or the US and international organisations such as the United Nations. Third, while the parties are to refrain from occupying new features there is no prohibition on erecting or consolidating structures on territory already 178 See Barry Wain, “Taking Charge”, Far Eastern Economic Review, 14 November 2002, p. 26. 179 Framework Agreement on Comprehensive Economic Co-operation between the Association of South East Asian Nations and the People’s Republic of China, 5 November 2002, < 347 occupied. Philippines Undersecretary of Foreign Affairs Lauro Baja acknowledged this problem in noting that structures such as those on Mischief Reef would require a separate agreement.182 ASEAN, and especially Vietnam, had pushed for a prohibition on building or expanding existing structures but China opposed it. The compromise was an explicit reference in the declaration to a code of conduct as a shared ultimate goal.183 Nonetheless, China gained more than it conceded because it managed to insert an important qualifier about any future work on a code (see below). Fourth, other countries are not invited to associate themselves with the declaration. They are merely encouraged to respect the principles in the instrument. Fifth, while there is agreement to work towards an eventual code of conduct, this must be “on the basis of consensus” by the parties.184 This qualification provides scope for delay. The declaration was probably the best that could be achieved even if its provisions suggested a lowest common acceptable denominator approach. While in itself the process of negotiating the code/declaration of conduct helped build confidence among the parties it also exposed fissures within the ASEAN membership and between ASEAN and China. With the declaration now concluded, the challenge is to move from aspiration to compliance.185 7.5 The Decision Unit, Foreign Policy Behaviour and Domestic Politics Having traced the evolutionary shift from a code to declaration of conduct, our attention now turns to identifying the decision unit in Beijing, Kuala Lumpur and Manila and its influence on foreign policy behaviour. The decision units methodology outlined 182 Leotes Marie T. Lugo, “Chinese structures to remain despite code of conduct deal”, BusinessWorld (Philippines), 6 November 2002. 183 Tham Choy Lin and Muin Abdul Majid, “ASEAN Consensus on South China Sea Declaration”, Bernama, 1 November 2002. 184 Reportedly, China demanded this phrase be included. “Progress made on Sea Code of Conduct pact”, Business Times, 2 November 2002. 185 See also Joint Communique of the 36th ASEAN Ministerial Meeting, Phnom Penh, 16-17 June 2003, Paragraph 26, < 348 in Chapter 2 informs the analysis. In addition, consideration is given to domestic politics as a contextualising factor. China China’s leadership recognised the issue of a code/declaration of conduct as one that engaged the country’s national interest. Both President Jiang Zemin and Premier Zhu Rongji indicated their support for a code. For example, during Philippines President Arroyo’s visit to Beijing in October 2001 Jiang restated his support for the instrument.186 Zhu indicated his support on several occasions, including in a meeting with President Estrada of the Philippines in November 1999,187 at the Fourth ASEAN Informal Summit held in Singapore in November 2000188 and the Fifth ASEAN+3 Summit in November 2001 in Brunei.189 As a foreign policy priority, the code/declaration of conduct is probably of a lower rank than the Taiwan issue,190 management of Sino-US relations, international economic relations and promotion of a multipolar world order. Nonetheless, for China’s leadership the South China Sea dispute holds political and emotional value as a rallying point for a number of themes that support retention of legitimacy and power. They include the themes of sovereignty and protection of territorial integrity, irredentism and resumption of major power status.191 Invoking the themes is a double-edged sword, however. Externally they nourish concerns about a China threat especially in the context of an apparent strategy of “creeping assertiveness”192 to occupy features. This is despite an offer first made in 1990 by former Premier Li Peng and repeated on a number of 186 “China, the Philippines to Advance Formulation of Code of Behavior on South China Sea”, Xinhua, 30 October 2001; “Philippines, China agree to identify projects for joint development of Spratlys.” 187 “Chinese PM bids for time on ‘Code’”, Manila Standard, 26 November 1999. 188 “China pushes peace, mum on Spratlys”. 189 “Zone to promote regional economy”. 190 On the higher ranking of the Taiwan question, see for example Jianwei Wang, “Chinese Perspectives on Multilateral Security Cooperation”, Asian Perspective 22(3), 1998, p. 121. 191 See for example, Chen Jie, “China’s Spratly Policy With Special Reference to the Philippines and Malaysia”, Asian Survey XXXIV(10), 1994, pp. 893-94. 192 The term is Ian James Storey’s. Ian James Storey, “Creeping assertiveness: China, the Philippines and the South China Sea dispute”, Contemporary Southeast Asia 21(2), 1999, p. 95. 349 occasions since by senior Chinese officials to jointly develop the Sea’s resources. Domestically, the leadership risks losing ‘face’ and the support of the PLA and the public if it makes concessions on China’s “indisputable sovereignty” in the Spratlys (and Paracels), with implications for the regime’s legitimacy.193 Despite an interest in foreign and defence policy issues, there is little evidence that Jiang exhibited regular, active participation in the decision-making process on China’s position on the code/declaration. His remarks were confined to general statements of support and reassurances that China sought a peaceful resolution of the dispute.194 Nonetheless, in initially seeking to persuade ASEAN to adopt Paragraph 8 the 1997 Joint Statement of ASEAN Heads of State/Government and the President of China to guide behaviour in the disputed areas of the South China Sea rather than developing a code of conduct, Chinese officials invoked a general policy position to which Jiang had committed his country. The code/declaration did not appear to be of high personal interest to Jiang compared to other foreign policy issues. The perception that Jiang delegated oversight responsibility on the code/declaration was reflected by the fact that China’s senior-most interlocutors on the issue in discussions with ASEAN and the ARF were Premier Zhu Rongji and Foreign Minister Tang Jiaxuan. This is not to suggest that Jiang was uninformed about developments on the code/declaration. Rather, it is to say that little evidence indicated that as the predominant leader he was the decision unit on this issue. 193 Chen, “China’s Spratly Policy”, p. 894. Public opinion appears a nascent pressure on policy making, including in the foreign policy arena: see for example, Herbert Yee and Zhu Feng, “Chinese Perspectives of the China Threat: Myth or Reality?” in Herbert Yee and Ian Storey (eds), The China Threat: Perceptions, Myths and Reality, RoutledgeCurzon, London and New York, 2002, p. 26; International Institute for Strategic Studies, “Public opinion in China. The growing impact on policy”, IISS Strategic Comments 7(4), 2001, pp. 1-2; Jie Chen, Yang Zhong and Jan William Hillard, “The Level and Sources of Popular Support for China’s Current Political Regime”, Communist and Post-Communist Studies 30(1), 1997, pp. 45-64. 194 This resonates with Michael Swaine’s observation that “Jiang Zemin’s direct involvement in the foreign policy subarena is reportedly limited largely to the enunciation of broad programmatic statements on China’s external stance or important bilateral relationships and his participation in summits or meetings with foreign leaders.” Swaine goes on to note, however, that Jiang exerts indirect influence on specific foreign policy issues. Michael D. Swaine, The Role of the Chinese Military in National Security Policymaking, Revised Edition, RAND, Santa Monica, 1998, pp. 27-29. 350 We next consider whether multiple autonomous actors or a single group were the decision unit. The first question is: did the issue fall within an area where only one known dominant policy group existed? A number of groups at the central level195 are involved to a varying extent in policy deliberations on South China Sea issues: the Politburo Standing Committee, the Foreign Affairs Leading Small Group, the Ministry of Foreign Affairs (MFA), the State Oceanic Administration and the PLA.196 The Politburo Standing Committee can exercise final authority to commit or withhold the regime’s resources on a particular foreign policy issue. It is the principal foreign policy decision-making body.197 As noted in Chapter 5, its members include the Chairman of the Chinese Communist Party (CCP), the Chairman of the Central Military Commission (CMC), the State President, the Chairman of the Standing Committee of the National People’s Congress (NPC) and the Chairman of the Chinese People’s Consultative Conference (CPCC).198 Since 1997 no representative of the PLA has been a member of the Politburo Standing Committee. This does not mean the military does not exert an influence on foreign policy. Its formal and informal contacts with senior members of the Politburo such as Jiang Zemin and Li Peng and through membership of the Foreign Affairs Leading Small Group provide channels of communication.199 The Politburo Standing Committee announced at the Fifteenth Communist Party Congress in 1997 comprised Jiang Zemin, Li Peng, Zhu Rongji, Hu Jintao, Li Ruihuan, Wei Jianxing and Li Lanqing. An overhaul occurred at the Sixteenth Party Congress held in November 2002 with the transition to the so-called “fourth generation” leadership 195 Because my interest concerns who shapes foreign policy at the state level I do not comment on the mirror of the national foreign affairs structure that exists at the provincial and some municipality levels. For discussion of the latter see Lu Ning, The Dynamics of Foreign-Policy Decisionmaking in China, Westview Press, Boulder and Oxford, 1997, pp. 15-16. 196The State Oceanic Administration has an advisory rather than decision-making role. Because the focus here is on decision-making, the role of advisory agencies is not pursued. It is recognised, however, that they can and do have an influence on deliberations by the decision unit. 197 Swaine, The Role of the Chinese Military in National Security Policymaking, p. 22. 198 Lu, The Dynamics of Foreign-Policy Decisionmaking in China, p. 9. 199 Ibid., pp. 31-33. 351 centred on Hu Jintao.200 Jiang nonetheless retains considerable behind-the-scenes power.201 The extent to which the Politburo Standing Committee perceived the code/declaration as an issue critical to the regime’s survival and thus felt compelled to exercise its power directly is unclear. A constraint was its willingness and ability to micro-manage and make decisions on an issue as complex as the South China Sea/Spratlys dispute.202 Complicating this was the collective decision-making characteristic of the third generation leadership. This engendered the rise of bureaucratic politics and the decentralisation of foreign policy decision-making power from the central leadership to the MFA and other agencies.203 On the other hand, the standing committee has the power to establish a general policy position and delegate the substantive work to the foreign ministry given the latter’s primary responsibility for the country’s international relations. This leads us to consider the hierarchical arrangement of the other players to assess whether this provides clues about which one can make an authoritative decision to commit or withhold regime resources. The Foreign Affairs Leading Small Group (FALSG) “is the senior most deliberative body of the Chinese leadership and foreign policy/national security establishment. … simultaneously a policy-deliberative body, a policy-making organ and 200 The membership of the Politburo Standing Committee was expanded to nine at the Sixteenth Communist Party Congress in 2002. Led by Hu Jintao, the other members in rank order are Wu Bangguo, Wen Jiabao, Jia Qinglin, Zeng Qinghong, Huang Ju, Wu Guanzheng, Li Changchun and Luo Gan. “Hu Jintao Introduces His Colleagues”, People’s Daily, 15 November 2002. For biographical information on each member see < 352 particularly a policy co-ordination institution.”204 Its facilitates co-ordination, communication, supervision and consultation between the Politburo Standing Committee and the foreign policy community within government.205 Formally, the group’s members are: the Premier (a PBSC [Politburo Standing Committee] member), the Foreign Minister (Vice-Chairman of the FALSG), the director of the State Council Office of Foreign Affairs, the head of the CCP International Liaison Department, the Minister of Foreign Trade and Economic Cooperation, the Minister of State Security, a PLA representative, and the head of the Xinhua News Agency.206 Although not officially a decision-making body the FALSG’s membership means that in instances the group does take decisions, which may be endorsed by the leadership.207 The head of the FALSG is the foreign policy co-ordinator in the Politburo Standing Committee. In 1998 Jiang Zemin succeeded Li Peng as the head of the FALSG, the first time a paramount leader had occupied the position.208 The hierarchical structure of the foreign policy decision-making process in China means that the FALSG can guide and inform the senior leadership about the development of the code/declaration without necessarily taking the lead. One way in which this occurs is through the transmission of decisions down to the foreign affairs community and the elevation of information and analysis to political leaders.209 The Ministry of Foreign Affairs is China’s premier agency for diplomacy. Its influence relates to three main areas. First, giving substance to framework foreign policy 204 David Shambaugh, “China’s International Relations Think Tanks: Evolving Structure and Process”, The China Quarterly 171, 2002, p. 580. See also Swaine, The Role of the Chinese Military in National Security Policymaking, pp. 24-26. 205 Ibid., p. 24. 206 Ibid., especially footnote 8 thereon. 207 Lu, The Dynamics of Foreign-Policy Decisionmaking in China, p. 108. 208 Stuart Harris, (2002): Globalisation and China's diplomacy: Structure and process, Working Paper 2002/9, Department of International Relations, Research School of Pacific and Asian Studies, Australian National University, Canberra. 209 Swaine, The Role of the Chinese Military in National Security Policymaking, p. 24. 353 decisions made by the political leadership.210 In this context, the Ministry’s participation in negotiations on the code/declaration gave effect to general statements by Jiang Zemin and Zhu Rongji that China sought a peaceful resolution to the South China Sea dispute. The second area of influence concerns the development of internal policies to manage and control sensitive issues or relations with certain countries.211 In the context of the code/declaration, the Department of Asian Affairs within the Ministry took the lead in developing China’s position and in handling discussion with ASEAN members. For example, China’s delegation to the first negotiation of a consolidated draft code at Hua Hin in March 2000 was led by Ms. Yang Yanyi, Counselor in the department.212 At the same time, Foreign Minister Tang Jiaxuan played a high profile diplomatic role in the context of discussion within the ARF. The final area of influence is in the role of information provider to the political leadership. Although much of the Ministry’s analysis is a synthesis of material received from its missions abroad and internal research, its sources are considered reliable.213 These considerations give weight to the ministry’s reports and briefings to the top leadership, such that “the MFA’s [Ministry of Foreign Affairs] policy recommendations and opinions in a majority of cases prevail over those of other bureaucratic institutions in the battles for the hearts and minds of the central leadership.”214 An important distinction between the foreign ministry and the PLA is that the former has an official policy role while the latter only represents a bureaucratic interest group in foreign policy decision-making,215 albeit an important one. The ministry reports directly to the Politburo Standing Committee via the head of the Foreign Affairs Leading Small Group, who himself is usually a member of the committee.216 As noted earlier, from 1998 the head of this leading small group was Jiang Zemin. Two examples 210 Lu, The Dynamics of Foreign-Policy Decisionmaking in China, p. 108. 211 Ibid., pp. 111-12. 212 Supalak Ganjanakhundee, “China calls for ban on military exercises in S. China Sea”, Japan Economic Newswire, 15 March 2000. 213 Lu, The Dynamics of Foreign-Policy Decisionmaking in China, p. 117. 214 Ibid. 215 Ibid., p. 106. 216 Ibid., p. 20. 354 suggest the foreign ministry held ascendancy over the military concerning the code/declaration issue. First, in China’s October 1999 draft code a specific paragraph was included calling on parties to refrain from conducting military exercises in the Spratlys and their adjacent waters and from carrying out close-in military reconnaissance. The promoters of this paragraph were more likely to have been the military than the diplomats. Chinese officials did not insist on the paragraph’s reinstatement during 2000-2001 when negotiations were held on a consolidated draft code. This suggests it was not a pre-condition for China’s continued participation in the negotiation. Indeed, China’s representatives made greater effort to have the Paracel Islands excluded from the scope of the code’s coverage. Second, the July 2001 statement by Fu Ying, Director-General of the Ministry’s Department of Asian Affairs that China was comfortable with a code of conduct applying to either the South China Sea or just the Spratlys.217 This geographic flexibility is contrary to the explicit identification of the Paracel and Spratly Islands as Chinese territory in Article 2 of the country’s 1992 Territorial Sea Law and the PLA’s mandate from the 1992 Political Report of the fourteenth Party Congress to protect the country’s territorial integrity (see Chapter 5). The final actor group we consider is the PLA. While it does not play a central role in the foreign policy making domain, its voice and influence on certain issues are present.218 As discussed in Chapter 6, in moving from the leadership of Deng Xiaoping to Jiang Zemin succession politics played an important role in the rise of the PLA as an actor in China’s foreign policy making process.219 Both Michael Leifer and Knut Snildal argue that the naval branch of the PLA has used the South China Sea dispute to emphasise potential threats to China’s security, territorial integrity and maritime 217 “China says agreement ready on disputed S. China Sea islands” 218 Swaine, The Role of the Chinese Military in National Security Policymaking, p. 31. 219 Lu, The Dynamics of Foreign-Policy Decisionmaking in China, p. 3 and p. 165; John W. Garver, “The PLA as an Interest Group in Chinese Foreign Policy” in C. Dennison Lane, Mark Weisenbloom and Dimon Liu (eds), Chinese Military Modernization, Kegan Paul International, London and New York, 1996, pp. 246-81; Ellis Joffe, “How much does the PLA make foreign policy?” in David S.G. Goodman and Gerald Segal (eds), China Rising. Nationalism and Interdependence, Routledge, London and New York, 1997, pp. 54-57. 355 resources and as justification for extra-budgetary allocations to protect those interests.220 This is understandable in the post-Deng era where competing bureaucratic interests in foreign policy making have intensified and the leadership relies on the support of the military to sustain the regime’s continued hold on power.221 In the case of the code/declaration the PLA’s interests suggest it would have provided input on China’s position. First, as noted above, the geographic coverage of the draft code overlapped with features explicitly identified in Article 2 of the 1992 Territorial Sea Law. In the context of the deliberations of the National People’s Congress on the draft law, the PLA pushed, successfully, for the naming of the features in the South China Sea claimed by China, against the opposition of the foreign ministry.222 In light of this intervention, logically the PLA’s interest would lie in seeking a narrow or non-definition of the instrument’s geographical scope. Second, the PLA had a strategic interest in any provision prohibiting new occupations or expanding existing structures.223 At the same time, it must have recognised that apart from Scarborough Shoal few other presently unoccupied features hold great interest. The analysis suggests that the decision unit was a single group, the Politburo Standing Committee. Several reasons support this view. First, its membership comprised everyone in the regime whose support was essential to commit or withhold regime resources in relation to the issue. Its decisions were not readily reversible by outside opposition. Given the top-down nature of the formal decision- making process in China, it would be unusual, for example, for a policy position with implications for China’s foreign relations and advanced internationally by Premier Zhu Rongji, Foreign Minister Tang Jiaxuan and his officials not to have been endorsed previously by the 220 Michael Leifer, “Chinese Economic Reform and Security Policy: The South China Sea Connection”, Survival 37(2), 1995, pp. 44-59; Knut Snildal, Petroleum in the South China Sea - A Chinese National Interest?, Unpublished Candidata rerum politicarum (Masters) thesis, University of Oslo, Oslo, 2000. 221 See for example Lu, The Dynamics of Foreign-Policy Decisionmaking in China, pp. 162-63. 222 Garver, “The PLA as an Interest Group in Chinese Foreign Policy”, p. 258. 223 For example in relation to positioning electronic surveillance and communications systems. The fact of possession might also be promoted by military planners as strengthening China’s position in the event of any future negotiations. 356 Politburo Standing Committee. The consistent signal from China during 2001-2002 was that it was ready and willing to conclude a code of conduct and, when that approach faltered, a substitute declaration of conduct.224 Second, the group recognised that to advance China’s economic modernisation ambitions it must maintain good relations with neighbouring countries and minimise perceptions of a China threat to regional peace and stability.225 The signing of the declaration supports this; confrontation does not. ASEAN is now China’s fifth largest trading partner, after Japan, the US the European Union and Hong Kong.226 Conversely, China is ASEAN’s sixth most important trading partner.227 China’s exports to ASEAN increased from US$4.1 billion in 1991 to US$17.3 billion in 2000 while its imports from the grouping climbed from US$3.8 billion to US$22.2 billion in the same period.228 Deepening the economic reciprocities was the 5 November 2002 signing of an agreement to establish a free trade area covering goods and services, investment and 224 See remarks in section 7.4 attributed to Wang Yi and Zhu Rongji following the signing of the declaration of conduct. On China’s support for a code see for example, “Working Together to Create a New Phase of China-ASEAN Cooperation – Address by Premier Zhu Rongji at 5th China-ASEAN Summit, 6 November 2001, Bandar Seri Begawan”, < 357 economic co-operation.229 Once established, the free trade zone is projected to have a combined market of 1.7 billion people, a regional Gross Domestic Product (GDP) of approximately US$2 trillion and two-way trade valued at US$1.23 trillion.230 Although ASEAN and China are currently not major investors in each other’s economies, the expectation is that levels will grow over time.231 Our attention turns now to consider the relationship between the decision unit and foreign policy behaviour on the code/declaration. China’s position on the draft code shifted over time. As noted in section 7.2, initially Beijing opposed development of a code. Instead it promoted Paragraph 8 of the 1997 joint statement by the political leaders of ASEAN and China. Then in October 1999 Ms. Wang Yi of China’s foreign ministry presented a draft version of a code to Philippines Undersecretary of Foreign Affairs Lauro Baja. This represented a major shift in the government’s position in the six months between April and October 1999, suggesting internal debate culminated in consensus within a short time. Signaling agreement to work with ASEAN on preparing a consolidated draft code deepened this shift, reinforced by the positive response to Malaysia’s July 2002 proposal for a declaration of conduct and confirmed by signing the instrument at the ASEAN-China Summit in November the same year. A single group reaching consensus quickly is characterised as self-contained, pushing its position strongly and supporting a direct course of action rather than hedging 229 See Footnote 179 in this chapter on accessing the full text of the agreement. See also, “Historic Step to Win-win Deal for China, ASEAN”, People’s Daily, 5 November 2002, “Premier Zhu Makes 3-point Proposal on Cooperation between China, ASEAN”, People’s Daily, 5 November 2002. Two analyses of the agreement are John Wong and Sarah Chan, “China-ASEAN Free Trade Agreement: Shaping Future Economic Relations”, Asian Survey XLIII(3), 2003, pp. 507-26; and Suthiphand Chirathivat, “ASEAN- China Free Trade Area: background, implications and future development”, Journal of Asian Economics 13(5), 2002, pp. 671-86. 230 Figures sourced from ASEAN-China Expert Group on Economic Cooperation, Forging Closer ASEAN-China Economic Relations in the Twenty-First Century, p. 2, Paragraph 11. 231 Ibid., p. 2, Paragraph 9 and p. 12. 358 by taking incremental steps.232 The hypothesised behaviour of such a decision unit is a conflictual stance, strong commitment or complete denial of regime resources and the use of economic and military instruments in conjunction with or instead of diplomacy.233 In the case of the code/declaration China adopted a co-operative stance overall. While initially it pushed the 1997 joint statement as sufficient to manage claimants’ behaviour, it subsequently engaged in negotiations of a dedicated regional instrument under the auspices of the Working Group of the ASEAN-China Senior Officials Consultations on the Code of Conduct. Beijing could have rejected further discussion of the matter following its refusal to endorse ASEAN’s draft November 1999 code. Instead, it signalled its willingness to continue the process and made an extensive commitment of resources through high level political attention and diplomacy. This included Premier Zhu Rongji and Foreign Minister Tang Jiaxuan leading the Chinese delegation in meetings with ASEAN and China hosting two meetings to negotiate the draft code: in April 1999 in Kunming and in August 2000 in Dalian. China’s co-operative behaviour on the code/declaration can be located within the broader context of its “new security concept”. With the end of the Cold War and a changed strategic landscape in which the US is the sole superpower, from 1993 Chinese officials and academics began to reconceptualise Beijing’s security strategy.234 While sovereignty and territorial integrity endured as pillars of the country’s security interest, new elements were introduced: politics, defence, diplomacy and economics.235 In Wu Baiyi’s view “[w]hat China pursues now is security of sustained development. The change is a landmark. … The nature of its security policy, therefore, is accommodative, rather than confrontational.”236 With this shift, he suggests, equal prominence was given 232 Margaret G. Hermann, and Charles F. Hermann, “Who Makes Foreign Policy Decisions and How: An Empirical Inquiry”, International Studies Quarterly 33(4), 1989, p. 373. 233 Ibid. 234 Wu Baiyi, “The Chinese Security Concept and its Historical Evolution”, Journal of Contemporary China 10(27), 2001, p. 278. 235 Ibid. 236 Ibid., p. 281. 359 to economic and traditional military security, as well as recognition of reciprocities between internal and external security.237 From 1996 Chinese officials promoted the new security concept in bilateral and multilateral forums, as did the government’s media organs.238 The July 1998 White Paper entitled “China’s National Defense” elaborated the concept. Enlargement of military blocs and strengthening of military alliances were considered inappropriate to guarantee security in the post-Cold War environment. Rather, “[s]ecurity should based on mutual trust and common interests. We should promote trust through dialogue, seek security through cooperation, respect each other’s sovereignty, solve disputes through peaceful means and strive for common development.”239 Underlying the new security concept was “mutual trust, mutual benefit, equality and co-operation.”240 Both the 1998 and 2000 Defense White Papers stressed that the concept embraced China’s Five Principles of Peaceful Coexistence, economic integration to promote shared prosperity and dialogue and co-operation to foster the peaceful resolution of disputes.241 The 1998 237 Ibid. 238 Ministry of Foreign Affairs of the People’s Republic of China, “China’s Position Paper on the New Security Concept, 06/08/2002”, 31 July 2002, Part III titled “Policy”, < 360 White Paper identified three objectives behind China’s Asia-Pacific security strategy: the country’s own stability and prosperity, peace and stability in the region and promotion of dialogue and co-operation with other countries.242 These sentiments were evident also in the 2002 Defense White Paper’s discussion of regional security co- operation.243 China’s Foreign Ministry cited the country’s participation in negotiating a code of conduct in the South China Sea as an example of the new security concept in practice. (A further example given was agreement between Beijing and Hanoi to demarcate their maritime border in the Gulf of Tonkin/Beibu Bay.)244 In the Foreign Ministry’s view, “[d]isputes over territorial land and water are no longer an obstacle for China and its neighbors to develop normal cooperation and good-neighborly relations and jointly build regional security.”245 A similar view was expressed in the 1998 Defense White Paper: China maintains that they [territorial and maritime disputes] are to be solved through consultation by putting the interests of the whole above everything else, so that the disputes will not hamper the normal development of state relations or the stability of the region.246 In signing the Declaration of Conduct China sought to give effect to these sentiments. Specifically, to quarantine the South China Sea dispute from other dimensions of its relations with ASEAN, especially economics. As noted earlier, both China and ASEAN had a shared interest in deepening their economic ties and considered this should not be impeded by impasse on the code/declaration of conduct in the South China Sea. 242 Ibid. 243 Information Office of the State Council, China’s National Defense in 2002, Beijing, 2003. See reprinted text of document in Beijing Review, 9 January 2003, p. viii. 244 Ministry of Foreign Affairs of the People’s Republic of China, “China’s Position Paper on the New Security Concept, 06/08/2002”, Part IV titled “Practice”. 245 Ibid. 246 Information Office of the State Council of the People’s Republic of China, China’s National Defense, Beijing, 1998, “Section I. The International Security Situation”. 361 Rather than the hypothesised combined use of economic and military instruments of statecraft, only the former in conjunction with diplomacy was evident. Deepening and broadening international economic relations is a priority in China’s foreign policy agenda, as noted earlier. Strengthening economic relations with ASEAN is an element of this. Moreover, Beijing had a credit reserve in the region because of not devaluing its currency during the 1997-1999 financial crisis. More broadly, there is mutual economic benefit if China and ASEAN find ways to work together. They compete in the same major markets (the US, Japan and Europe) and their principal exports are relatively similar (textiles and apparel, other labour intensive manufactures, electrical and electronic goods). In addition, they compete for foreign direct investment in manufacturing. China’s accession to the World Trade Organisation presents new domestic opportunities (increased exports of goods) and challenges (paying for a rising volume of imports, restructuring economic sectors and managing the implications for labour demand, improving productivity and resource efficiency).247 A moderate correlation with the hypothesised foreign policy behaviour emerged. The predicted behaviours of extensive resource commitment and use of economic and diplomatic levers of statecraft (but not military) were evident. On the other hand, instead of the hypothesised conflictual stance a co-operative posture was apparent. One motivation for this is national interests beyond the immediate foreign policy issue. In this case, the high priority Beijing places on economic relations to advance the country’s modernisation and promotion of peace and stability in Southeast Asia through the new security concept.248 The latter provides a means to facilitate the former. Domestic 247 See for example, “Forging Closer ASEAN-China Economic Relations in the Twenty-First Century”, p. 7 and pp. 17-21. 248 In arguing that China’s co-operative stance on the code/declaration of conduct in the South China Sea can be placed within its new security concept, my perspective is Beijing-centric. This reflects my focus in this part of the chapter in understanding its behaviour on the code/declaration as a foreign policy issue. From the perspective of Southeast Asian countries, David Finkelstein suggests the depth of US ties and utility to the region and uncertainties about the implications of China’s rise meant the new security concept did not gain their support. Carlyle Thayer identifies another possible reason: despite the concept’s invocation of equality, dialogue, trust and co-operation Realist power politics still hold in China’s relations with regional countries. See Finkelstein, “China’s “New Concept of Security” - Retrospective and Prospects”, pp. 8-9; Thayer, “China’s ‘New Security Concept’ and Southeast Asia”, p. 89 and p. 103. 362 politics also appears to be a factor, in that delivering economic benefits helps sustain the regime’s hold on power.249 Malaysia Under Prime Minister Mahathir Malaysia explicitly identified its foreign policy priorities. Relations with ASEAN ranked first then Islamic countries followed by the non-aligned movement and finally the Commonwealth.250 And as the Malaysian Ministry of Foreign Affairs notes, greater emphasis was placed on economic development together with a robust articulation of the rights, interests and aspirations of developing countries and promotion of south-south co-operation.251 A feature of Mahathir’s stewardship as Malaysia’s political leader is the strong influence he has exerted on the country’s foreign policy.252 Indeed between 1981, when Mahathir was installed as prime minister, and 1986 both he and his deputy Musa Hitam were particularly active in foreign affairs.253 Between 1987 and 1990 when Ghazali Shafie was foreign minister, Mahathir “assumed the role of principal foreign policy architect.”254 Mahathir’s decisive role in Malaysia’s foreign policy decision-making process continued after the appointment of Abdullah Ahmad Badawi as foreign minister in 1991 and his succession in this position by Syed Hamid Albar in January 1999. Mahathir clearly has the power and authority to commit or withhold the regime’s resources concerning the Spratlys issue regardless of opposition by others. His support for a negotiated settlement of the South China Sea dispute and the conclusion of a 249 Michael Yahuda, “Chinese dilemmas in thinking about regional security architecture”, The Pacific Review 16(2), 2003, p. 203. As he puts it, “far from finding a new viable security framework for the region as a whole, the Chinese have developed a security concept that successfully meets their real security concern which is domestic. … In this sense, the new security concept ultimately serves the interest of the Chinese regime rather than those of the region as a whole.” Loc. cit. 250 Shanti Nair, Islam in Malaysian Foreign Policy, Routledge, London and New York, 1997, p. 80. 251 Ministry of Foreign Affairs, Malaysia, “Malaysia’s Foreign Policy”, < 363 regional code of conduct was consistent.255 In his view, the parties directly concerned should resolve the Spratlys dispute. Mahathir signaled, however, that Malaysia would not take a proactive role by calling a meeting of the claimants for this purpose. Rather, it would be responsive to meetings called by other countries.256 Given his active and longstanding interest in global and regional affairs, it was unsurprising that Mahathir expressed his views on the South China Sea dispute and the potential of a regional instrument to guide the behaviour of parties. Nonetheless, it was unlikely to have been his highest foreign policy priority or one perceived to be critical to the survival of the regime or the country. Indeed, according to Mak Joon Num a senior Malaysian foreign affairs official admitted that the government would not be removed even if it conceded its claim in the Spratlys.257 Malaysia’s occupation of Erica Reef and Investigator Shoal in 1999 had elicited little domestic interest.258 Former Director- General of the Maritime Institute of Malaysia B.A. Hamzah concurs with Mak’s view. Hamzah suggests that the Spratlys dispute has not been invoked in a domestic politics context because it neither stimulates public concern nor is it an electoral issue on which the government’s performance will be scrutinised,259 unlike the economy. Mak also notes that political opposition parties in Malaysia have not questioned the government’s handling of the Spratlys dispute nor commented on it in their public statements.260 Mahathir’s personal interest in the code/declaration of conduct may relate to the contribution of the maritime sector to the country’s economic security (see Chapter 5). If, as Mak asserts, Malaysia’s principal interest in the Spratlys is the potential wealth 255 See for example, “Malaysian PM meets Chinese president”, BBC World Service, 19 August 1999; A. Kadir Jasin, “Malaysia-China accord on key issues”, The New Straits Times, 19 August 1999. 256 “Structure is on Malaysian Territory – Dr. Mahathir”. 257 Mak Joon Num, “Domestic Politics and Conflict-Resolution in the South China Sea: China and the Spratlys Disputes”, Unpublished manuscript provided to the author, 2000, p. 10. 258 Ibid. 259 Interview with B.A. Hamzah, Maritime Policy Consultant and former Director-General, Maritime Institute of Malaysia, Kuala Lumpur, October 2001. 260 Interview with Mak Joon Num, Director of Research, Maritime Institute of Malaysia, Kuala Lumpur, October 2001. 364 from resource development261 then the conclusion of a regional instrument of conduct would support this goal by establishing ‘rules of the game’ to constrain assertive behaviour by one claimant against another. It is difficult to argue that Mahathir alone defined Malaysia’s position on the code/declaration of conduct, however. First, there appeared limited opportunity to engage the international-domestic politics linkage that he valued to enhance his image at home.262 This has at least two elements: as an economic statesman propelling Malaysia towards developed country status and as a political dynamo consolidating the country’s middle power standing in international affairs. Second, apart from general statements supporting the conclusion of a code of conduct in the South China Sea evidence of Mahathir’s regular and active participation in the decision process on this instrument was not found. This leads us to consider whether a single group defined Malaysia’s position on the code/declaration. We first consider the Ministry of Foreign Affairs. It was the principal government agency engaged in negotiating the draft code/declaration on Malaysia’s behalf and had responsibility for external interactions concerning the broader South China Sea dispute. For example, the Ministry argued strongly that the code should not be discussed in a multilateral setting such as the ASEAN Regional Forum and that Malaysia’s claimed features in the South China Sea were not part of the Spratlys.263 Accordingly, they should be excluded from the instrument’s coverage. Within the foreign ministry, specific responsibility for the dossier rested with the Territorial and Maritime Issues Division. That the code engaged the attention of senior officials of the ministry was reflected by its then Secretary-General, Abdul Kadir Mohamad, leading Malaysia’s delegation to the October 1999 ASEAN Senior Officials 261 Mak, “Domestic Politics and Conflict-Resolution in the South China Sea: China and the Spratlys Disputes”, p. 10. 262 For commentary on these linkages see Joseph Liow Chin Yong, “Foreign Policy and Domestic Crisis in Malaysia”, Panorama 2(2), 2000, pp. 53-57; Johann Saravanamuttu, “Malaysia’s Foreign Policy in the Mahathir Period, 1981-1995: An Iconoclast Come to Rule”, Asian Journal of Political Science 4(1), 1996, pp. 2-8. 263 See Ministry of Foreign Affairs, Malaysia, “Territorial and Maritime Claims in the South China Sea”, < 365 Meeting to discuss the code of conduct.264 In addition, at the working dinner of ASEAN senior officials on 25 July 2002 it was the Ministry’s new Secretary-General, Ahmad Fuzi Abdul Razak, who presented Malaysia’s proposal to replace the draft code with a non-binding political Declaration on the Conduct of Parties in the South China. A second contender is the Prime Minister’s Department, which reports directly to him. In John Funston’s view, it wields influence greater than other ministries.265 Under Mahathir the department has benefited from an increased concentration of policy making power in its hands.266 The department is responsible, inter alia, for overall management of functions relating to the legislative, constitutional and political duties and responsibilities of the Prime Minister and co-ordinating implementation of special projects identified by him. Within the department, the National Security Division’s Maritime Security Policy Group (Pusat Penyelarasan Penguatkuasaan Maritim, PPPM) headed by Abdul Rahim bin Hussin co-ordinates the activities of national agencies in assuring Malaysia’s maritime security, including enforcement of relevant laws, surveillance of the country’s territorial waters and the conduct of search and rescue operations.267 This group has responsibility for the South China Sea dossier. Although the Prime Minister’s Department is highly influential it is ultimately an advisory agency that defers to Mahathir in decision-making. The National Security Council is the third actor group. It is chaired by the Prime Minister and includes as members the Ministers of Foreign Affairs, Defence, Home Affairs, Information, a Minister Without Portfolio, the National Chief Secretary, the 264 “KL to help draft code of conduct for South China Sea”, Business Times, 9 October 1999. 265 John Funston, “Malaysia. Developmental State Challenged” in John Funston (ed.), Government and Politics in Southeast Asia, Institute of Southeast Asian Studies, Singapore, 2001, p. 175. Funston also notes that the department is referred to as the Office of the Prime Minister: ibid., p. 173. 266 Nair, Islam in Malaysian Foreign Policy, p. 83. 267 National Security Division, Prime Minister’s Department, Malaysia, “Pusat Penyelarasan Penguatkuasaan Maritim (PPPM)”, < 366 Chief of the Defence Force and the Inspector-General of Police.268 During times of conflict the council co-ordinates a whole-of-government response while in peacetime its role is to examine security related issues that are cross-departmental in scope.269 The National Security Division in the Prime Minister’s Department acts as the Council’s secretariat.270 The Ministry of Defence (MINDEF), or Kementerian Pertahanan (KEMENTAH), is another group. Traditionally Malaysia’s armed forces have played no part in politics, a legacy from the days of British governance.271 Nonetheless, to minimise a possible threat from this source Malaysia’s leaders have placed their relatives and loyal associates within the upper ranks of the military.272 MINDEF’s mission is to “uphold the sovereignty, integrity, interests and strategic rights of the country by ensuring efficiency and combat readiness at all times to face any external or internal threats to ensure the country’s development towards making a region of peace and prosperity.”273 Responsibilities associated with this mission include managing national defence, implementing national defence policy and general government policies, providing management and administrative services to the Malaysian Armed Forces and managing resources allocated for national defence.274 The Ministry is subordinate to the decisions and instructions of the National Security Council.275 While Malaysia’s political elite play down a China-threat and stress the warmth of bilateral ties, senior military officers occasionally expressed a contrary view. In November 1995, for example, Army chief General Datuk Che Md. Noor Mat Arshad warned that despite 268 Nicola Baker, The Dynamics of Contested Spaces: The Defence Policies of Malaysia, Singapore, and Indonesia, Unpublished Ph.D. thesis, The Australian National University, Canberra, 1999, p. 16. 269 Ibid. 270 National Security Division, Prime Minister’s Department, Malaysia, “Peranan dan Tugas”, < 367 friendly overtures China’s long-term aim was dominance, although not necessarily through aggression.276 Coming soon after China’s action of building structures on the contested Mischief Reef, the general’s concern was understandable. Since the early 1980s and the withering of a potential land threat based on a Vietnamese invasion through Thailand and the Malay peninsula, the Malaysian Armed Forces have emphasised a doctrine based on deterrence and forward defence to protect the nation’s economic interests, especially in the maritime domain.277 As Mak notes, “[t]he order of the day was external defence, particularly maritime defence and resource protection.”278 This was reflected in the core responsibilities of the Royal Malaysian Navy (and Royal Malaysian Airforce): safeguarding the sovereignty of all claimed territory and waters, protecting the country’s sealines of communication and marine resources, especially hydrocarbon deposits, production platforms and fisheries, and maintaining law and order in the full extent of waters under Malaysia’s extended jurisdiction and maritime surveillance.279 These responsibilities were drivers behind Malaysia’s defence procurement programme in the 1990s (see Chapter 4). MINDEF acts as an instrument of the government’s foreign policy on the Spratlys. It is not a decision maker on that policy. The historical maintenance of the separation between politics and the military means that MINDEF does not have the power or authority to prevent its decisions being reversed by other actors, in particular by the Prime Minister and the National Security Council. These factors suggest that although senior military officials were probably included in discussions about the code/declaration of conduct in the South China Sea, MINDEF was unlikely to have been the decision unit. 276 Cited in Tim Huxley and Rahman Koya, “Malaysia’s Armed Forces in the Late 1990s: Aiming for Credible Conventional Capability”, Asian Defence Journal 4/96, 1996, p. 61. 277 J.N. Mak, “The Modernization of the Malaysian Armed Forces”, Contemporary Southeast Asia 19(1), 1997, pp. 37-38. 278 Ibid., p. 38. 279 J.N. Mak, “The maritime priorities of Malaysia” in Ross Babbage and Sam Bateman (eds), Maritime Change. Issues for Asia, Allen and Unwin, St. Leonards, 1993, p.119. 368 The analysis suggests that the principal group involved in shaping Malaysia’s position on the code/declaration was the Ministry of Foreign Affairs. Its officials were the country’s interlocutors on the issue from the beginning, responsible for promoting Malaysia’s position that its claimed areas lay outside the Spratly Islands and should therefore be excluded from the coverage of the code and its replacement, the declaration of conduct. However, while it is identified as the principal policy group on this issue it does not include everyone within the regime whose support is essential for decision- making. This brings us back to Prime Minister Mahathir. As noted earlier, Mahathir did not satisfy the criterion of Figure 1 in Chapter 2 concerning “regular, active participation in the decision process” on the code/declaration to allow him to be labeled the decision unit in his own right. Given his influence on foreign policy decision-making, however, it is unrealistic to suggest he played no role in this issue. It was unlikely, for example, that Foreign Minister Syed Hamid Albar and his officials would formally propose a Declaration of Conduct in the South China Sea at the 2002 ASEAN Ministerial Meeting without Mahathir’s prior approval. This is because no other actor in Malaysian politics has the ultimate power and authority to commit the regime’s resources or to reverse a decision. As one commentator notes: He [Mahathir] believes in a highly centralized management system that has worked well but at the expense of initiative and independence among his subordinates … He believes in untrammelled power and is subservient to none. … Due to his centralizing approach to management, he tends to involve himself with every diplomatic issue.280 Similarly, Shanti Nair observes that: From 1981 up to the present, then, Malaysian foreign policy has borne much of his [Mahathir’s] personal stamp, while the centralization of power and policy making coupled with the increasing link between politics and government particularly after 1985 were also to have significant bearing on foreign policy choices.281 280 Shome, Malay Political Leadership, p. 180 and p. 181. 281 Nair, Islam in Malaysian Foreign Policy, p. 83. 369 This characterisation was also supported by Malaysian analysts Mak Joon Num and B.A. Hamzah.282 Hamzah observed, for example, that Mahathir’s dominance of the policy process means that any dissenting voices are over-ruled decisively and both the cabinet and the bureaucracy are “implementers” rather than “advisers”.283 We thus have a situation where by force of power, authority and personality Mahathir maintains a strong influence on foreign policy deliberations. In the case of the code/declaration, however, he adopted an oversight role leaving the Minister of Foreign Affairs and the Ministry of Foreign Affairs to take the lead. Several factors help explain Mahathir’s passive rather than dominant role in shaping decisions on the code/declaration. One was noted earlier: the possibilities for domestic status enhancement were low. Another lies in events during the late 1990s, a period that concentrated Mahathir’s attention on domestic politics. The Asian financial crisis of 1997-99 wrought rapid economic, social and psychological damage to Malaysia. Like the other so-called “miracle” economies of East Asia it had grown accustomed to a trend of upward growth in national and individual prosperity.284 Between 1990 and 2000, Malaysia’s annual growth in gross domestic product (GDP) averaged 7 per cent285 but considerable volatility occurred in the five years between 1996 and 2000. Average annual GDP figures fell from 10 percent in 1996 282 Interview with Mak Joon Num, Director of Research, Maritime Institute of Malaysia, Kuala Lumpur, October 2001; Interview with B.A. Hamzah, Maritime Policy Consultant and former Director-General, Maritime Institute of Malaysia, Kuala Lumpur, October 2001. 283 Ibid. 284 The term “miracle” was used by, for example, the World Bank to describe the public policies of Hong Kong, Indonesia, Japan, Malaysia, Singapore, South Korea, Taiwan and Thailand between 1965 and 1990 that provided the basis for their strong economic performance. World Bank, The East Asian Miracle: Economic Growth and Public Policy, Oxford University Press, New York, 1993. 285 World Bank, World Development Report 2002. Building Institutions for Markets, Oxford University Press, New York, 2002, p. 236. 370 to 7.3 per cent in 1997 before plummeting to -7.4 per cent in 1998 at the peak of the financial crisis.286 Mahathir responded to the crisis by introducing capital controls on 1 September 1998 to staunch the outward flow of funds, authorising the injection of more money into the economy to stave off interest rate rises, spur public spending and sustain borrowing by enterprises. Although this strategy went against the conventional response prescribed by the International Monetary Fund and the World Bank for similarly crisis-afflicted Indonesia, South Korea and Thailand, at the time and subsequently it received qualified support from several respected economists.287 By 1999 Malaysia’s economy was showing signs of a rebound, with GDP growth at 6.1 per cent.288 Currency controls were removed progressively from February that year. The improvement continued in 2000, with GDP growth of 8.3 per cent.289 A dramatic deceleration in GDP to 0.4 per cent occurred in 2001 because of a global economic slowdown and the flow-on effects of the terrorist attacks of 11 September.290 Nonetheless, the final currency controls were lifted in May 2001.291 In recognition of his “commando spirit” in defending the economy, Mahathir was reportedly given a green beret by the Special Forces Regiment during a visit to one of its camps in mid-2001.292 286 International Monetary Fund, Malaysia Statistical Appendix, 14 August 2001, IMF Country Report No. 01/187, Washington D.C., October 2001, < 371 Politically, the domestic impact of the crisis was severe. As one scholar notes, “it called into question the very nature of Mahathir’s leadership that had been sustained on the probity of economic development.”293 Suggestions of cronyism, corruption and nepotism hitherto ignored or muffled gathered momentum and voice.294 Differences between Mahathir and his deputy Anwar Ibrahim over what type of policy response Malaysia should implement to deal with the financial crisis were seen as a proxy for their wider struggle over the future policy direction of the country.295 This culminated in the dismissal and subsequent arrest of Anwar on corruption and other charges in September 1998, a development that polarised Malaysia’s domestic politics as the country went to general elections in November 1999. The results of the election were sobering for the government. Although the incumbent Barisan Nasional (BN) coalition triumphed over a syndicate of opposition parties running under the banner of Barisan Alternatif, there was a cost. The BN’s share of the vote dropped to 56.5 per cent, it lost 15 seats and had its majority reduced in other electorates and the Parti Islam Se-Malaysia (PAS) gained ground by winning Terrengannu to add to its existing control of Kelantan.296 These developments signaled a change in Malaysia’s political landscape given that the BN, and especially its major constituent party the United Malays National Organisation (UMNO), traditionally dominated elections by a wide margin.297 Were it not for the support of the non-Malays, especially the Chinese, the BN would have lost the two-thirds majority in parliament that is constitutionally required for the passage of new legislation.298 Since the election new domestic challenges have emerged, including revitalisation of UMNO as an organisation and its connection to the indigenous Malays, responding to the war on 293 Shome, Malay Political Leadership, p. 171. 294 Ibid., pp. 174-75; Simon Ingram, “‘Corruption’ warning for Malaysia’s rulers”, BBC World Service, 20 June 2001; Khoo Boo Teik, “Reflections on the UMNO General Assembly. More than Mahathir’s succession is at stake”, < 372 terrorism and managing the orderly political transition to a post-Mahathir era following his June 2002 announcement that he would retire in October 2003.299 In the case of the code/declaration of conduct, then, the analysis suggests the decision unit was multiple autonomous actors comprising Prime Minister Mahathir and the Ministry of Foreign Affairs. Theoretically, the foreign policy behaviour of this type of decision unit relates to the relationship among the members, in particular whether it is zero-sum or non-zero-sum.300 The difference relates to whether actors accept or deny the legitimacy of each to seek and share decision-making power.301 In the case of the code/declaration a non-zero-sum relationship existed because legitimacy was granted to each actor involved through the established institutional relationship between the Prime Minister and the bureaucracy. Theoretically, multiple autonomous actors that have a non-zero-sum relationship are externally influenceable in their search for agreement: they scan each other and the environment for information to guide their action.302 The formal and informal interactions between the Prime Minister and the Ministry of Foreign Affairs (and its Minister) provided several opportunities for internal and external considerations to be injected into the decision-making process. Behaviourally, the group is predicted to favour co-operation in foreign policy, commit a moderate amount of regime resources and deploy an array of instruments of statecraft.303 The fit between hypothesised and actual government behaviour was weak. Malaysia exhibited conflictual and co-operative behaviour at different times, but overall it was biased towards the latter rather than the former. Initially Kuala Lumpur adopted a conflictual position concerning the geographic scope of the draft code of conduct. It argued that the instrument should apply only to the Spratly Islands whereas its claimed features lay outside this area. In 2002, a shift to a high profile co-operative position 299 On the transition see for example S. Jayasankaran and Michael Vatikiotis, “Mahathir’s Long Goodbye”, Far Eastern Economic Review, 4 July 2002, pp. 12-15; “The long goodbye”, Economist, 29 June 2002, pp. 27-28. 300 Hermann and Hermann, “Who Makes Foreign Policy Decisions and How”, p. 364, Table 1 and p. 369. 301 Ibid., p. 369. 302 Ibid. 303 Ibid., p. 376. 373 emerged as Malaysia proposed a non-binding declaration of conduct that left unspecified its geographic scope as a means to break the impasse on the code. The commitment of regime resources to the code/declaration paralleled this shift. Prior to 2002 Malaysia’s resource commitment was low. This changed following its proposal of a declaration of conduct as it sought to garner the agreement of the ASEAN membership before, during and after the 2002 meeting of foreign ministers. Beyond diplomacy other instruments of statecraft were not used. Philippines The Philippines President is the decision maker in foreign policy.304 In this respect, he/she has the power and authority to commit or withhold national resources on the issue of the code/declaration of conduct. Both Presidents Estrada and Arroyo, whose stewardship spans the negotiation of the instrument, had an active interest and involvement in foreign and defence issues. For example, Estrada chaired the third ASEAN Informal Summit in Manila in 1999 while early in her presidency Arroyo sought to consolidate Manila’s relations with Kuala Lumpur, Beijing, Brunei and Jakarta. Her early support for the war on terrorism and agreement to have American troops train with personnel of the Armed Forces of the Philippines (AFP) in dealing with the Abu Sayyaf group on Mindanao are further examples. President Gloria Macapagal-Arroyo defined eight realities in the international and regional environment that influence the country’s foreign policy. They are the strategic relationship among Japan, China and the US; regional co-operation under the framework of ASEAN; deepening relations with the Organisation of Islamic Conference; stimulating foreign investment to support the country’s economic development; the growing importance of multilateral and inter-regional organisations; defence of the nation’s sovereignty and protection of its environment and natural 304 Salvador P. Lopez, “The Foreign Policy of the Republic of the Philippines” in Raul P. De Guzman and Mila A. Reforma (eds), Government and Politics of the Philippines, Oxford University Press, Singapore, Oxford and New York, 1988, p. 241. 374 resources, including through a code of conduct in the South China Sea; development of human resources; and the contribution made by overseas Filipinos.305 In bilateral discussions with the leaders of the other parties to the South China Sea dispute Presidents Estrada and Arroyo sought to place it within the broader sweep of Philippines foreign policy objectives.306 On the draft code of conduct both leaders emphasised a policy based on multilateral negotiation within the framework of ASEAN- China interactions. Beyond this neither demonstrated regular or active participation in the decision process. Rather, they confined themselves to political statements of support leaving the substance of the negotiations to the bureaucrats. A range of policy groups was closely involved with the development of the draft code/declaration. First, the Department of Foreign Affairs (DFA). The department has been the ‘face’ of Philippines diplomacy on the instrument, and the South China Sea dispute more generally. Senior departmental officials involved included Secretary Domingo Siazon, Undersecretary for Policy Lauro Baja and the head of the Office of Asian and Pacific Affairs, Willy Gaa. Following the Philippines’ 1999 offer to draft the initial version of the code in conjunction with Vietnam, these officials facilitated intra- ASEAN negotiations and the preparation of iterative texts. That the department had the power and authority to commit the nation was reflected in the fact that Siazon was the signatory on behalf of the Philippines of the Joint Statement between the Government of the People’s Republic of China and the Government of the Republic of the Philippines on the Framework of Bilateral Cooperation in the Twenty-First Century concluded on 305 Speech of President Gloria Macapagal-Arroyo during the Vin d’Honneur, 5 January 2002, < 375 16 May 2000 in Beijing.307 Tang Jiaxuan, his counterpart, signed on behalf of China. Paragraph 9 of the Joint Statement refers explicitly to the South China Sea dispute and the mutual commitments agreed to. On the issue of a code of conduct, the two sides “reiterate that they will contribute positively toward the formulation and adoption” of the instrument.308 One scholar suggests the apogee of the DFA’s influence on internal deliberations on a code of conduct issue was during the Estrada presidency between June 1998 and January 2001 because of his preference for its advice over that of the national security adviser.309 The second group is the so-called Cluster E, the composition and functions of which were described in Chapter 6. Nominally, Cluster E has been abolished; in reality, it continues to function.310 A mini Cluster E also exists. In relation to South China Sea issues it comprises representatives of the National Security Council, the Department of National Defense, the Department of Foreign Affairs, the Department of Fisheries, the Department of Environment and Natural Resources and the National Mapping and Resource Information Authority.311 While Cluster E and its sub-variant comprise senior officials it is an advisory rather than a decision-making body. The Department of National Defense is the third group. It is responsible for protecting the state against external and internal threats, planning and managing the national defence programme and undertaking other functions as required by law. The Department exercises executive supervision over the Armed Forces of the Philippines (AFP).312 Although the AFP was and remains active in surveillance activities and the pursuit, detention and arrest of vessels and crew intruding into Philippines-claimed 307 Joint Statement available at < 376 waters near both Mischief Reef and Scarborough Shoal,313 the Department of National Defense is primarily an adviser on, and instrument of, foreign policy but not an ultimate decision maker. With the installation of Gloria Macapagal-Arroyo as President in January 2001 the influence enjoyed by the foreign affairs department during the Estrada administration waned. Although the department was still the external ‘face’ of Philippines diplomacy on the code/declaration of conduct, domestically its influence was affected by the cool relationship between the President and her Vice-President (and then concurrent Secretary of Foreign Affairs) Teofisto Guingona, Junior. Indeed, Guingona resigned as Foreign Minister in July 2002 over policy differences with the President concerning the on-going presence of American troops in the Philippines. Malaysia’s proposal of a declaration of conduct to break the deadlock over the draft code further eroded the DFA’s influence. No longer was the Philippines, through the department, the ‘driver’ of the process. Instead, it was now a reactive actor. A third factor was the aftermath of the terrorist attacks in America of 11 September 2001. The ensuing global war on terrorism concentrated the attention of the President and her administration on internal security issues. The National Security Council is the fourth group. Led by the President, other members include the Senate President, the Speaker of the House of Representatives, other leaders of the Congress, key Cabinet officials and the National Security Adviser (who concurrently holds the post of Director-General of the NSC). On an ad hoc basis, former presidents attend meetings by invitation. It groups all the actors essential to commit or withhold regime resources on the issue of the code/declaration and the participation of the President means its decisions are unlikely to be reversed. While the President chairs the Council the support of other key actors was required because neither 313 See for example “Beijing Warns Philippines over Fishing Boat Dispute”, Philippine Daily Inquirer, 21 March 2001; “China Refutes Philippines Claim to Shoal”, Kyodo News, 17 March 2001; Dona Pazzibugan and Donna S. Cueto, “Philippine Military on Alert over Increase of PRC’s Structures in Scarborough”, Philippine Daily Inquirer, 24 February 2001; Luz Baguioro, “Chinese vessel sinks in sea chase”, The Straits Times, 25 May 1999. 377 Estrada nor Arroyo immersed themselves in the detail of the issue. In this regard, the decision unit is identified as a single group, the National Security Council. We next consider the influence of the decision unit on foreign policy behaviour. The Philippines has consistently promoted bilateral and multilateral diplomacy to promote its position on the South China Sea dispute.314 The code/declaration falls within the second of these. Not only was the Philippines’ preference for diplomacy consistent but also the approach received the long-standing support of all the key actors involved: the President, the Cabinet, the military and the diplomats. This consensus suggests the decision unit was self-contained, that is factors affecting the decision were internal to the decision unit itself.315 The hypothesised foreign policy behaviour of this type of decision unit is a conflictual stance, either a strong commitment or denial of regime resources and the use of economic and military instruments of statecraft as well as or instead of diplomacy.316 As facilitator of the draft code the Philippines emphasised co-operation and accommodation of divergent viewpoints. This was understandable given the consensual manner in which ASEAN takes decisions and Manila’s need to broaden and deepen support for the code within the membership. This consideration also guided the Philippines’ interactions with China on the draft code, especially since all parties were aware that without Beijing’s assent no instrument could be concluded. Such conciliatory behaviour was contrary to that predicted by the decision units framework. From 1999 when the Philippines first offered to draft the code its commitment of regime resources was high. This was consistent with the hypothesised behaviour. Manila’s commitment of regime resources related to two areas: the investment of diplomatic prestige in championing the code and the allocation of officials from the diplomatic corps. President Arroyo acknowledged this following the signing of the Declaration of Conduct in November 2002: “Larry [Philippines Undersecretary of Foreign Affairs, Lauro Baja], I 314 Ian Storey, “Manila looks to USA for help over Spratlys”, Jane’s Intelligence Review 11(8), 1999, p. 47. 315 Hermann and Hermann, “Who Makes Foreign Policy Decisions and How”, p. 364. 316 Ibid., p. 373. 378 know you’ve been working hard for this the past three years.”317 Unlike the hypothesised behaviour, economic and military instruments of statecraft were not used, either in conjunction with or instead of diplomacy. Rather, diplomacy was the sole instrument used. Overall, then, a weak fit emerged between the hypothesised and actual foreign policy behaviour of the Philippines on the code/declaration of conduct. Only one of the three predicted behaviours was confirmed. 7.6 Summary This chapter traced the development of a regional instrument to regulate behaviour in the South China Sea and identified who in Beijing, Kuala Lumpur and Manila made decisions on each government’s position on it. The influence of the decision unit on the government’s behaviour on the issue was considered, as was the role of domestic politics as a contextual factor. Three distinct phases in the development of a regional instrument were identified. First, between 1991 and 1999 when ASEAN and China presented unilateral drafts of a code of conduct. Second, from 2000 to 2001 when the parties sought to reconcile their texts. And third, in 2002 when a Declaration of Conduct emerged as a means to break the impasse on several issues relating to a code of conduct. This related to disagreement about the geographic scope of the code and whether existing structures on occupied features could be expanded. On 4 November 2002 ASEAN and China signed the Declaration on the Conduct of Parties in the South China Sea, signaling the successful conclusion of their negotiations. This sets the scene for a new phase in ASEAN-China relations concerning the dispute. As ever, however, the real test depends on performance. The decision unit concerning the code/declaration differed in each of the three countries examined. In the case of China, this was identified as a single group: the Politburo Standing Committee. Its membership comprised President Jiang Zemin and 317 Pazzibugan, “Spratly pact hailed as RP success”. 379 other politicians in the regime’s collective leadership whose support was essential to commit or withhold the state’s resources in relation to the issue. In addition, the group’s decisions were not readily reversible by outside opposition. In six months between April and October 1999 China shifted from opposing the idea of a code of conduct to presenting its own version and then working with ASEAN to prepare a consolidated text. A positive response was also given to Malaysia’s proposal for a declaration of conduct rather than a code. These developments suggested the decision unit was able to reach consensus quickly on China’s position and accordingly be labelled self-contained. A moderate fit between hypothesised and actual foreign policy behaviour emerged from the analysis. The theoretically predicted behaviours of extensive resource commitment and use of a mix of levers of statecraft was borne out. However, instead of the hypothesised conflictual behaviour a co-operative stance was apparent. Helping explain this is the high priority the government places on strengthening international economic relations in support of China’s modernisation, which is facilitated by a co- operative rather than confrontational stance. A further factor was that the code/declaration provided a practical example of China’s new security concept, which Beijing promoted heavily to Southeast Asian countries. In Malaysia the decision unit was identified as multiple autonomous actors comprising Prime Minister Mahathir and the Ministry of Foreign Affairs. Although Mahathir is the decisive voice in Malaysian public, including foreign, policy, in the case of the code/declaration he adopted a lower profile and left it to the foreign ministry to take the lead. Several reasons help explain Mahathir’s lower profile. First, the possibility for personal status enhancement with the domestic audience was low since the South China Sea dispute was not an issue that engaged deep public interest (that is, votes). Second, from 1997-2001 domestic politics consumed much of his attention. This included dealing with the financial crisis, allegations of corruption and cronyism, the ouster of Deputy Prime Minister Anwar Ibrahim, the 1999 national election and reinvigoration of UMNO following its mediocre performance at the polls. 380 Behaviourally, the decision unit exhibited characteristics of a non-zero-sum group. Legitimacy was granted to each actor involved through the established relationship between the Prime Minister and the bureaucracy. The fit between hypothesised and actual government behaviour was weak. While conflictual and co- operative behaviour were evident at different times, overall it was biased towards the latter rather than the former. Initially Kuala Lumpur adopted a conflictual position concerning the geographic scope of the draft code of conduct. It argued that the instrument should apply only to the Spratly Islands whereas its claimed features lay outside this area. In 2002, a change to a co-operative position was evident with Malaysia making a concerted effort to have its proposal of a non-binding declaration of conduct endorsed by ASEAN. The commitment of regime resources paralleled this shift. Before 2002 Malaysia’s resource commitment to the issue was low; this changed following its proposal of a declaration of conduct as intra-ASEAN consensus building efforts intensified. Contrary to the hypothesised deployment of a wide range of instruments of statecraft, reliance was placed on diplomacy. In the case of the Philippines a single group, the National Security Council, was identified as the decision unit. Headed by the President, the group includes all members of the regime whose support is essential for decision-making on the issue and it has the power and authority to commit state resources. Its decisions are not readily reversible by opponents. Manila’s position on the code/declaration of conduct was characterised by consensus among all the key actors to pursue a diplomatic rather than confrontational approach. In this respect the decision unit was self-contained. The hypothesised and actual government behaviour exhibited a weak fit with only one of the predicted characteristics confirmed. Rather than a confrontational stance, the decision unit demonstrated co-operative behaviour based on diplomacy. This was partially explainable by the need for Manila, as the ‘driver’ of the draft code between 1999 and 2001, to build consensus on it with fellow ASEAN members and to persuade China to agree to the instrument. In addition, a weak economy and the poor state of the 381 Philippines’ military resources meant these two instruments of statecraft could not be deployed. On the other hand, and as hypothesised, a significant amount of regime resources was committed to the issue. This related to national prestige as champion of a regional code of conduct and the sustained efforts of officials from the Department of Foreign Affairs in this endeavour. 382 8.0 CONCLUSION This thesis overlaid three ‘lenses’ through which to view the Spratly Islands dispute, with particular reference to China, Malaysia and the Philippines. Specifically, the lenses comprised foreign policy decision-making, government behaviour and domestic politics. The theoretical reference was the decision units approach, a sub- literature within foreign policy analysis. This approach offered four advantages over systemic level-type analyses characterising much of the previous research effort on the Spratly Islands dispute. First, by explicitly looking inside the ‘black box’ of the state to identify who made foreign policy decisions and how, it facilitated a finer-grained analysis compared to the aggregated focus of Realist and associated approaches. Second, it enabled a cross-national examination. Much of the pre-existing literature concentrates on China. The thesis broadened the analysis to include Malaysia and the Philippines. Third, it allowed different types of political regimes and foreign policy decision-making structures to be considered. Finally, it provided a means to compare and contrast different types of decision units and their influence in shaping government behaviour towards the dispute. To examine how decision units shaped foreign policy behaviour, a generalised macro-hypothesis and four specific sub-hypotheses advanced by Margaret Hermann and Charles Hermann1 were tested against four case studies in the Spratlys dispute. The empirical analysis revealed that the descriptive, explanatory and predictive utility2 of the decision units approach was mixed. On the descriptive element, the decision units approach successfully illuminated who the principal foreign policy decision-making actors were in each country (the decision unit) and the process involved. Offsetting this insight was marginalisation of the role of the systemic level. In terms of explanatory value, the approach provided insight into the relationship between decision unit 1 Margaret G. Hermann and Charles F. Hermann, “Who Makes Foreign Policy Decisions and How: An Empirical Inquiry”, International Studies Quarterly 33(4), 1989, pp. 373-76. 2 This phrasing borrows from J. David Singer, “The Level-of-Analysis Problem in International Relations” in Klaus Knorr and Sidney Verba (eds), The International System. Theoretical Essays, Princeton University Press, Princeton, 1961, pp. 89-90. 383 characteristics -- self-contained or externally influenceable -- and government behaviour. Concerning the predictive element, the decision units approach had marginal utility. Of the nine cases examined, predicted and actual government behaviour matched in two, a further two demonstrated a moderate fit, three showed a weak fit and two had no fit. The injection of domestic politics into the analysis illuminated motivations of and constraints faced by decision-makers. This provided a contextual backdrop to the form and content of government action. While it is not a comprehensive analytical tool, the combined decision units-domestic politics approach offers deeper insight into government decisions and behaviour on the Spratly Islands dispute than hitherto reported in the literature. These findings are discussed further below. 8.1 Decision Units Table 3 shows the decision units identified in each case study. The predominant leader, single group and multiple autonomous actors categorisation advanced by Hermann and Hermann provided a useful device for ordering the analysis. In all the countries examined the principal actors were associated with the state. The involvement of the private sector, public interest groups, academics or non-governmental organisations in the decision process was conspicuous by its absence. Several factors help explain this. First, the Spratlys dispute is an inter-governmental issue. As such, decision-making, as opposed to advice or consultation, about a government’s position on aspects of the dispute was confined to a small circle of regime members. Second, the implementation of decisions relied on instrumentalities of the state -- diplomacy, the military, legislation -- rather than extra-governmental approaches. Third, apart from in China the Spratlys dispute was not cast in nationalistic terms. It is necessary, however, to look beyond rhetoric aimed principally at a domestic audience to the actual decisions and behaviour of a government. In this, decision-making and its influence on government behaviour was confined to core members of the political and military elites. 384 Table 3: Case Study Decision Units Case Study Country Decision Unit and Type3 Bolstering Sovereignty Malaysia National Security Council: Claim SG Philippines Ramos (1992-1998) Estrada (1998-2001) Arroyo (2001- ): PL Bolstering Maritime China Politburo Standing Jurisdictional Measures Committee, Standing Committee of the National People’s Congress: MAA Contestation over Mischief China Jiang Zemin, Politburo Reef Standing Committee, People’s Liberation Army: MAA Philippines i) 1995: Ramos: PL ii) 1998: National Security Council: SG Regulating conduct in the China Politburo Standing South China Sea Committee: SG (code/declaration of Malaysia Mahathir, Ministry of conduct) Foreign Affairs: MAA Philippines National Security Council: SG Hermann and Hermann’s observation that the decision unit can vary depending on the foreign policy issue was confirmed. On the internationalisation approach adopted by Manila to garner support for its sovereignty claim, the predominant leader (successively Presidents Ramos, Estrada and Arroyo) was the decision unit. In relation to the Mischief Reef dispute, the Philippines’ decision unit changed between the 1995 and 1998 episodes. In the first episode the decision unit was the predominant leader, President Ramos. For the second episode the unit was a single group, the National 3 Abbreviations refer to the following typology. PL = Predominant Leader; SG = Single Group; MAA = Multiple Autonomous Actors. 385 Security Council. Finally, the Philippines’ decision unit on the code/declaration of conduct was again the National Security Council. The decision unit for China on the code/declaration of conduct in the South China Sea was a single group, the Politburo Standing Committee. Its membership comprised the inner political core of the regime whose support was essential to commit or withhold the state’s resources and the group’s decisions were not readily reversible by outside opposition. After 1998 Jiang Zemin headed both the Politburo Standing Committee and its subordinate body responsible for foreign policy issues, the Foreign Affairs Leading Small Group. In the case of Malaysia and the code/declaration of conduct the decision unit was multiple autonomous actors. It comprised Prime Minister Mahathir and the Ministry of Foreign Affairs. On Malaysia’s occupation of Investigator Shoal and Erica Reef to bolster its sovereignty claim, the identified decision unit was the National Security Council. Chaired by the Prime Minister, the council comprises the ministers of foreign affairs, defence, home affairs and information, a minister without portfolio, the National Chief Secretary, the Chief of the Defence Force and the Inspector-General of Police. A nuance to Hermann and Hermann’s observation emerged. In two cases the decision unit type remained the same -- multiple autonomous actors -- but its constituent members changed. The first case concerned Beijing’s measures to bolster its maritime jurisdictional measures covering the Spratly Islands among other areas. Here, the multiple autonomous actor decision unit was the Politburo Standing Committee and the Standing Committee of the National People’s Congress (NPC). The former stands at the apex of the formal foreign policy decision-making system through a chain of command taking in the Foreign Affairs Leading Small Group and the Ministry of Foreign Affairs. On the other hand, reflecting its responsibility for enacting “basic” domestic legislation the NPC Standing Committee adopted the Territorial Sea Law and the Exclusive Economic Zone and Continental Shelf Act. In addition, it approved China’s ratification of the United Nations Convention on the Law of the Sea (LOSC). 386 In the second case, China’s 1995 and 1998 actions in Mischief Reef, a different set of members comprised the multiple autonomous actor decision unit. Unlike the previous case, this time the constituent members of the decision unit were identified as President Jiang Zemin, the Politburo Standing Committee and the People’s Liberation Army (PLA). While the support of each member was required before regime resources could be applied to the issue, between the first and second episodes their relative influence changed. In 1995 the military was the pivotal member as succession politics gripped the upper echelons of the regime. Jiang and his leadership rivals, Li Peng, Qiao Shi and Li Ruihuan, vied for the military’s support. By 1998 the pivotal member of the decision unit was Jiang as his authority over the party, state, military and the formal foreign policy making apparatus was unchallenged. This finding suggests that not only can the decision unit change depending on the foreign policy issue or changes within the regime, as Hermann and Hermann identified, but also within the same unit type its composition and the relative influence of members can alter over time. One advantage of this elasticity in the decision units approach is that its enables a dynamic, as opposed to a static, analysis of a foreign policy issue to be undertaken. More generally, in peering inside the ‘black box’ of the state the decision units approach provides a winnowing device sorting for the key decision makers on a particular foreign policy issue. Systemic level approaches, by contrast, are too coarse for this task. 8.2 Decision Units and Foreign Policy Behaviour The decision units approach suggested that the nature of the decision unit -- self- contained or externally influenceable -- influences a government’s behaviour towards a foreign policy issue. Marked variance between hypothesised and actual behaviour emerged from the empirical analysis. Table 4 displays the overall findings. 387 Table 4: Relationship between Hypothesised and Actual Government Behaviour Case Study Country Decision Hypothesised Actual Behaviour ‘Fit’ Between Unit Behaviour Hypothesisied Type & & Actual Status4 Behaviour5 Bolstering Malaysia SG, SC Conflictual Conflictual behaviour, Moderate Sovereignty behaviour, commit moderate commitment of Claim regime resources regime resources, extensively or instruments limited to withhold unilateral action and completely, use diplomacy economic and military instruments of statecraft and/or instead of diplomacy Philippines PL, EI Co-operative or Co-operative behaviour, Close neutral behaviour, moderate to high commit moderate commitment of resources, amount resources, reliance on diplomacy rely on diplomacy 4 Decision Unit abbreviations refer to the following typology: PL = Predominant Leader; SG = Single Group; MAA = Multiple Autonomous Actors. Status abbreviations refer to the following typology: SC = Self-contained; EI = Externally Influenceable. 5 The range adopted extends from “None” to “Weak” to “Moderate” to “Close”. Weak means one of the three hypothesised characteristics were confirmed; Moderate means two hypothesised characteristics were evident, Close means all three hypothesised characteristics were present. 388 Table 4 continued Case Study Country Decision Hypothesised Actual Behaviour ‘Fit’ Between Unit Behaviour Hypothesisied Type & & Actual Status Behaviour Bolstering China MAA, Co-operative Conflictual behaviour, None Jurisdictional EI behaviour, high commitment of Measures moderate regime resources, commitment of instruments limited to regime resources, unilateral action and wide range of diplomacy instruments of statecraft used 389 Table 4 continued Country Decision Hypothesised Actual Behaviour ‘Fit’ Between Unit Behaviour Hypothesisied Type & & Actual Status Behaviour Contestation over China MAA, Passive behaviour, Active behaviour, high None Mischief Reef SC commit few regime commitment of regime resources, favour resources, intermittent use diplomacy of diplomacy and only when pressured Philippines (a)1995: Co-operative or Co-operative behaviour, Close PL, EI neutral behaviour, moderate commitment of commit moderate regime resources, reliance amount of regime on diplomacy resources, rely on diplomacy (b)1998: Conflictual Co-operative behaviour, SG, SC behaviour, commit high commitment of Weak regime resources regime resources, no use of extensively or economic and military withhold instruments and reliance completely, use on diplomacy economic and military instruments plus/or instead of diplomacy 390 Table 4 continued Case Study Country Decision Hypothesised Actual Behaviour ‘Fit’ Between Unit Behaviour Hypothesisied Type & & Actual Status Behaviour China SG, SC Conflictual Co-operative behaviour, Moderate Regulating behaviour, commit extensive commitment of conduct in regime resources regime resources, indirect the South extensively or use of economic China Sea withhold instrument, extensive use (code/ completely, use of diplomacy declaration economic and of conduct) military instruments plus/or instead of diplomacy Malaysia MAA, Co-operative Mix of mild-fully co- Weak EI behaviour, operative behaviour, mix moderate of low to high commitment commitment of of regime resources, regime resources, reliance on diplomacy wide range of instruments of statecraft used Case Study Regulating conduct in 391 the South China Sea (code/ Country Decision Hypothesised Actual Behaviour ‘Fit’ Between Unit Behaviour Hypothesisied Type & & Actual Status Behaviour Philippines SG, SC Conflictual Co-operative behaviour, Weak behaviour, commit high commitment of regime resources regime resources, no use of extensively or economic or military withhold resources, reliance on completely, use diplomacy economic & military instruments plus/or instead of diplomacy Table 4 continued 392 In the following sections the findings shown in Table 4 are discussed further by reference to the macro- and sub-hypotheses described in Chapter 2. The macro- hypothesis that self-contained decision units engage in more extreme foreign policy behaviour than externally influenceable ones was not well supported. Five cases of self- contained decision units were identified: for Malaysia’s approach to bolstering its sovereignty claim, China and Mischief Reef, China and the code/declaration of conduct, the Philippines in the 1998 Mischief Reef episode and the Philippines and the code/declaration of conduct. In the case of China and Mischief Reef, there was no fit between predicted and actual behaviour. For the other four cases a weak or moderate fit was found. Several reasons might account for these findings. An obvious one is misidentification of the decision unit and/or its status as either self-contained or externally influenceable. While this possibility cannot be discounted entirely because of the opaqueness in the claimant countries of decision-making on the Spratlys dispute, a justified case was made for the identifications. A different reason relates to the decision units approach itself, with its focus on actors and processes within the state. State interests related to the broader international environment can act to condition government behaviour positively or negatively for a particular foreign policy issue. The decision units approach downplays this factor. In the case of China, the broader interests of the regime included the maintenance of a stable and peaceful international environment to support the country’s economic modernisation and the promotion of its so-called new security concept predicated on deeper regional engagement and co- operation. For the Philippines, the broader interest was addressing its impotence in deterring external threats. Responses included modernisation of the armed forces, internationalisation of the Spratlys dispute and revitalising defence co-operation with the United States. These macro-strategic considerations suggest that the decision units approach provides only a partial tool for explaining government behaviour in international affairs. This suggests a role for combined intra-state and systemic level approaches, as discussed below. 393 Central to the sub-hypotheses described in Chapter 2 is the expected behaviour of different types of decision units labelled either self-contained or externally influenceable. As Table 4 shows, in only two cases -- the Philippines’ externally influenceable predominant leader decision unit in the strategy to internationalise the Spratlys dispute and the 1995 Mischief Reef episode -- was a close fit found between hypothesised and actual behaviour. The findings are further discussed below. Self-contained Decision Units This characteristic was identified in five cases: Malaysia’s single group decision unit concerning the occupation of Investigator Shoal and Erica Reef, China’s multiple autonomous actor decision unit on the Mischief Reef dispute, China’s single group decision unit on the code/declaration of conduct, the Philippines’ single group decision unit in the 1998 Mischief Reef episode and the Philippines’ single group decision unit on the code/declaration of conduct. We consider each case in turn. A moderate fit between the hypothesised and actual foreign policy behaviour emerged concerning Malaysia’s occupation of Investigator Shoal and Erica Reef. In conformity with the hypothesis, conflictual behaviour was evident as well as a moderate commitment of regime resources to secure the features. On the other hand, instead of the use of economic and military instruments of statecraft in conjunction with or instead of diplomacy, only the latter two were employed. There was no fit between the hypothesised and actual foreign policy behaviour of China’s decision unit in relation to Mischief Reef. Instead of passive behaviour, China twice undertook construction activity on Mischief Reef despite diplomatic protests by the Philippines and in contravention of their bilateral code of conduct. Rather than the hypothesised low commitment of state resources, the reverse occurred with ships transporting building materials, communications equipment and personnel more than 1100 km to the reef. And rather than favouring diplomacy, Beijing relied on it intermittently and only when pressured. For example, in July 1995 Foreign Minister 394 Qian Qichen indicated China’s willingness to use international law, including the LOSC, to guide negotiations on the Spratlys and to discuss the South China Sea dispute with all the ASEAN claimants. This was in response to the statement by the foreign ministers of the Association of Southeast Asian Nations (ASEAN) in March that year expressing concern about the Mischief Reef action and their united stance a month later at a senior officials meeting with their Chinese counterpart in Hangzhou. A moderate fit between China’s hypothesised and actual foreign policy behaviour emerged concerning the code/declaration of conduct. The hypothesised extensive commitment of regime resources and use of diplomacy were supported. Premier Zhu Rongji and Foreign Minister Tang Jiaxuan served as the principal political level interlocutors with ASEAN on the code/declaration while at the officials’ level senior foreign ministry personnel were involved in the working group process negotiating iterations of the draft instrument. The use of economics as a lever of statecraft was indirect. In 2000 Premier Zhu proposed the establishment of a China- ASEAN Free Trade Area by 2010. The proposal was endorsed by the two sides in 2001 and a framework agreement to guide the detailed negotiations was formally signed at the Sixth ASEAN-China Summit held in Phnom Penh in November 2002. A divergence with hypothesised behaviour also emerged. Rather than the predicted conflictual behaviour, a co-operative stance was observed. The principle indicator was China’s signing of the declaration of conduct. Earlier signals of China’s co-operative stance included its agreement to negotiate a consolidated instrument under the auspices of the Working Group of the ASEAN-China Senior Officials Consultations on the Code of Conduct. An option for Beijing would have been to reject further discussion of the matter following its refusal to endorse ASEAN’s draft code in November 1999 and the organisation’s lukewarm response to its own draft code submitted in October that year. In addition, China hosted two meetings to discuss the code: in April 1999 in Kunming and in August 2000 in Dalian. 395 One motivation for China’s co-operative posture was, and remains, the priority its political leaders place on deepening economic relations with Southeast Asia to support the country’s modernisation. The 2002 signing of a formal agreement between ASEAN and China to establish a free trade area by 2010 gave impetus to this. Another was Beijing’s desire to gain regional support for its new security concept. China’s assent to the Declaration on the Conduct of Parties in the South China Sea can be situated within this context. Deepening the sentiments expressed in the new security concept, at the 18 June 2003 meeting of the ASEAN Regional Forum (ARF) in Phnom Penh China’s Foreign Minister, Li Zhaoxing, proposed the convening of an “ARF Security Conference”. Its membership would comprise high-level military and government officials. A forthcoming concept paper will elaborate the proposal.6 In the bilateral domain, China has now concluded bilateral framework agreements with all the member states of ASEAN to guide co-operation in the twenty-first century. Moving to the Philippines and the second (1998) Mischief Reef episode, a weak fit between the hypothesised and actual foreign policy behaviour was apparent. As predicted, a high commitment of regime resources was made. Sustained efforts were made by President Estrada and senior officials of the Department of Foreign Affairs to obtain support from within and beyond Southeast Asia. The hypothesised use of economic and military instruments of statecraft in addition to or instead of diplomacy was not confirmed. This was unsurprising: Manila was in no position to exert economic or military pressure. And rather than diplomacy being an adjunct to other levers of statecraft it was the principal instrument used. The Philippines’ preference for diplomacy was constant, receiving the long-standing support of the President, the Cabinet, the military and the diplomatic corps. In a similar vein, the predicted conflictual stance was not evident. Rather, Manila adopted a co-operative position. On the code/declaration of conduct, a weak fit between the hypothesised and actual behaviour of the Philippines emerged. Rather than the predicted conflictual 6 Chairman’s Statement, Tenth ASEAN Regional Forum, Phnom Penh, 18 June 2003, paragraph 45, 396 stance, the decision unit exhibited a co-operative position based on diplomacy. This was partly explainable by the need for Manila, as the champion of the draft code, to build consensus on the instrument’s content with fellow ASEAN members. This consideration also underlay the Philippines’ interactions with China on the issue, especially since it was clear that without Beijing’s assent no instrument could be concluded. Manila’s inability to apply economic and military pressure also channeled its approach towards diplomacy. As hypothesised, a high commitment of regime resources was evident. From 1999 Manila invested considerable diplomatic prestige in promoting a regional code of conduct and backed this up through the commitment of senior officials from the Department of Foreign Affairs to lead the negotiation. Externally Influenceable Decision Units This characteristic was identified in four cases. First, China’s multiple autonomous actors decision unit concerning measures to bolster maritime jurisdiction in the Spratly Islands among other areas. Second, Malaysia’s multiple autonomous actors decision unit in relation to the development of the code/declaration of conduct. Finally, two cases involved the Philippines’ predominant leader decision unit: the first (1995) Mischief Reef episode and the internationalisation approach to garner support for Manila’s sovereignty claim. On China’s maritime jurisdictional measures no fit emerged between the hypothesised and actual government behaviour. Instead of a wide range of instruments of statecraft being used, reliance was placed on a mix of unilateral action and diplomacy. And rather than a moderate commitment of regime resources to the issue a high volume was applied. Significant and sustained application of intellectual and political resources was required to draft and shepherd the various measures through the law making process. The fact that China enacted its maritime jurisdictional measures in a six-year period between 1992 and 1998 testifies to this effort. Finally, instead of the predicted co- < 397 operative behaviour a conflictual posture was evident. China was single-minded in adopting its maritime jurisdictional measures that covered the Spratlys even though it must have known they would prompt diplomatic protests. In relation to the Territorial Sea Law controversial provisions included the claim of sovereignty over the Paracel and Spratlys Islands, among other areas, and a requirement that foreign military vessels receive prior approval from the Chinese authorities to transit the territorial sea. Other measures of concern were the unjustified use of straight baselines in the Paracels and an inference that the approach might also be used in the Spratlys, the reference to preventing or punishing infringement of China’s security in the contiguous zone and the assertion that Beijing’s historical rights were not prejudiced by the provisions of the Exclusive Economic Zone and Continental Shelf Act. In the case of Malaysia and the code/declaration of conduct, hypothesised and actual government behaviour exhibited a weak fit. Kuala Lumpur exhibited conflictual and co-operative behaviour at different times, but overall it was biased towards the latter rather than the former. Initially Kuala Lumpur adopted a conflictual position concerning the geographic scope of the draft code of conduct, concentrating on having its claimed area excluded from the code’s geographic scope. In 2002, it proposed a declaration of conduct and this saw a shift to a high profile, co-operative position as it sought to gain ASEAN’s endorsement of the idea. The commitment of regime resources paralleled this shift. Prior to 2002 Malaysia’s resource commitment to the code was low. Following its proposal of a declaration of conduct it worked hard to forge ASEAN consensus behind it. Contrary to the hypothesised deployment of a wide range of instruments of statecraft, reliance was placed on diplomacy. The final two cases concern the Philippines’ predominant leader decision unit in relation to the first (1995) Mischief Reef episode and the internationalisation approach to garner support for Manila’s sovereignty claim in the Spratlys. In the case of Mischief Reef, hypothesised and actual government behaviour showed a close fit. Manila adopted a co-operative stance based on diplomacy because 398 this was the only realistic option in dealing with Beijing’s action. From Manila’s perspective, the conclusion of the August 1995 bilateral code of conduct was an early vindication of this approach. Underscoring this was China’s agreement in March 1996 to establish three joint working groups on fisheries co-operation, marine environmental protection and confidence building measures. Co-operative behaviour was also evident in the effort President Ramos made after 1995 to re-establish military relations with the United States through a Visiting Forces Agreement. A moderate amount of regime resources was committed to dealing with Mischief Reef. After the discovery of the Chinese structures there, Ramos ordered increased surveillance of the feature by the Philippines air force, reinforcement of Filipino military forces stationed elsewhere in the Spratlys and the launch of a concerted diplomatic effort within ASEAN and the ARF and in bilateral dialogue with the Chinese. Finally, a close fit was found between hypothesised and actual behaviour in relation to the Philippines’ effort to bolster its sovereignty claim by internationalising the Spratlys dispute. Reliance on diplomacy united the approaches of Presidents Ramos, Estrada and Arroyo. Ramos quickly protested to Beijing its 1995 occupation of Mischief Reef and supported the conclusion of a bilateral code of conduct. Estrada also eschewed a confrontational approach in relation to the occupations of Mischief Reef, Investigator Shoal and Erica Reef. He sought support from a variety of sources: from United Nations head Kofi Annan, the US and Japan. No substantive response was forthcoming. At the multilateral level, the President’s interlocutors targeted ASEAN, ARF, the Asia-Europe Meeting and interparliamentary forums in Europe and South America. In their personal capacity, officials advanced Manila’s position in the informal Workshop on Managing Potential Conflicts in the South China Sea and the Council for Security Co-operation in the Asia-Pacific (CSCAP). Upon her installation as President in 2001, Arroyo reiterated the pre-eminent role of diplomacy in guiding the Philippines’ approach to resolving the Spratlys dispute. The hypothesised co-operative behaviour was confirmed. While Ramos’ behaviour overall was co-operative, reflecting Manila’s impotence in exerting any 399 economic or military pressure, several assertive actions also occurred. The military destroyed Chinese marker stones on features near Mischief Reef, an action that would have required high-level approval given its sensitivity. Moreover, Ramos did not yield immediately to China’s demands that its fishermen arrested within the Philippines’ exclusive economic zone in March 1995 be released. They were freed only when China agreed to hold bilateral talks, culminating in their August 1995 code of conduct. Estrada continued the co-operative approach. In 1999 during the APEC Leaders Summit in Kuala Lumpur he and Jiang Zemin agreed to explore all peaceful means to resolve the Spratlys dispute. Subsequently, during Estrada’s May 2000 visit to Beijing the two leaders agreed to refrain from actions that might complicate or escalate the situation, an understanding reflected in their Joint Statement on the Framework of Bilateral Co- operation in the New Century. President Arroyo reaffirmed co-operation as the cornerstone of Manila’s diplomacy. Giving effect to this sentiment, during her October 2001 visit to China she agreed to Jiang’s proposal that the two countries identify projects for joint development in the disputed area. A mixed picture emerged concerning the hypothesised moderate commitment of regime resources. On the one hand, a limited amount of diplomatic resources was applied selectively in an attempt to focus international attention on each new development: Mischief Reef, Investigator Shoal, Erica Reef. On the other hand, between 1999 and 2001 the Philippines devoted a high level of diplomatic resources in spearheading the development of a code of conduct. The code represented an additional element in Manila’s internationalisation approach. It provided an opportunity to embed within a multilateral instrument issues on which Manila had failed to gain traction bilaterally, such as a prohibition on any new occupations. 8.3 Domestic Politics as a Contextual Influence Decision units and government behaviour were not isolated from domestic politics. For all the countries examined a number of themes relating to domestic politics conditioned their position towards the Spratlys dispute between 1991 and 2002. 400 In the case of China, a key theme was leadership succession. Between 1994 and 1997, the politics of succeeding an ailing Deng Xiaoping as leader engaged not only inter-personal rivalry among those directly involved in the contest but also their need to gain the backing of the military. Launching the 1995 action on Mischief Reef can be considered against this backdrop. It served to signal Jiang’s firmness in upholding Beijing’s claim of “indisputable” sovereignty in the Spratlys and it provided an opportunity for him and the military to press their respective interests. For Jiang, this included gaining an advantage over his political rivals by reaffirming his status as ‘first among equals’ and reinforcing his nationalist credentials with party conservatives and the People’s Liberation Army (PLA). The military, especially the navy, had its own bureaucratic and political interests to push as it sought to advance its modernisation drive. In this respect, a useful referent for it was the Political Report of the Fourteenth Party Congress in 1992. This gave the military a mandate to protect China’s territorial integrity. Assuring China’s sovereignty and security in the maritime domain fitted within this, providing a rationale for demands for increased budgetary allocations to the navy, an increased presence in the Spratlys and other areas of the South China Sea and the continued pursuit of a blue-water capability. By the time of the second Mischief Reef episode in 1998, Jiang’s status as political leader was unrivalled as was his control over the levers of foreign policy making and the military. Another theme was economic development. Since the “open door” policy was adopted in the late 1970s economic modernisation has been a priority of the regime, shoring up the Communist Party’s authority and legitimacy as the pull of ideology has gradually weakened. In the early 1990s the contest between political conservatives and liberals about the direction and pace of economic transformation appeared evenly poised, particularly as the experience of the former Soviet Union following its implosion was unimpressive politically and economically. By the mid-late 1990s the balance tilted towards the liberals and Premier Zhu Rongji pushed through an ambitious programme of economic reform. Against this background, maintaining the flow of foreign trade in goods, the majority of it transported by sea, and foreign direct investment was essential 401 if economic growth was to be sustained at the 7-8 per cent target identified in official documents such as the five-year plans. In this regard, the “China threat” notion and speculation that Beijing sought to turn the South China Sea into an “internal lake” were unhelpful. Signing the non-binding Declaration on the Conduct of Parties in the South China Sea was a pragmatic, low-cost measure that allayed this concern, enabling the focus to revert to the economics arena. At the same meeting in November 2002 that ASEAN and China signed the declaration of conduct in the South China Sea, Beijing’s proposal to establish a free trade area by 2010 was endorsed. Turning to Malaysia, the major themes related to the dominance of the public policy process by Prime Minister Mahathir, management of the domestic impacts of the regional financial crisis, the Anwar Ibrahim affair and the 1999 general election. These challenges suggested Kuala Lumpur should have had little interest in drawing attention to itself by occupying Investigator Shoal and Erica Reef and taking the lead in promoting a regional declaration of conduct in the South China Sea. On the other hand, during a time of intense pressure on Mahathir any loss of Malaysian claimed features to another country would have provided a further point of attack by his critics. For the Philippines, an entry point for the Spratlys dispute into the domestic politics arena was through the issue of military modernisation. Contending views about the purpose of the effort were evident. On one view, the military was playing bureaucratic politics by exaggerating the security threat posed by the dispute to justify acceleration of the modernisation programme. A different view argued that until an external threat deterrence capability was acquired, Manila risked losing more of its claimed territory in the Spratlys. The views were not mutually exclusive. On the one hand, the military modernisation project was scrutinised closely in the Senate in the context of prioritising budgetary allocations and ensuring transparency and accountability of disbursements. On the other hand, continued incursions into and construction within the Philippines-claimed area highlighted the impotency of the military, steering the response strategy towards diplomacy through internationalising the dispute. 402 A second theme related to the reinvigoration of military ties with Washington. The presence of the US military reached deep into Philippines political and public discourse. Sovereignty and the end of the Cold War were used to justify Manila’s decision to evict the US from its bases in the archipelago in 1992 but by 1995 a rethinking of the strategic value of the country’s defence relationship with Washington was evident. In the wake of the first Mischief Reef episode in 1995, which exposed the Philippines’ inability to deter external threats, a rekindling of military ties commenced. Support for this was not unanimous, reflected in the vigorous political and public debates about ratification of the Visiting Forces Agreement, the Mutual Logistics Support Agreement and the presence of US troops in the Philippines in the context of the global war on terrorism. 8.4 Areas for Future Research The application of the decision units approach to the Spratly Islands dispute and the injection of domestic political considerations into the analysis is the unique contribution of the thesis. It has illuminated areas that previous studies of the dispute have either assumed away or treated in a peripheral manner. At the same time, the study points to a number of new areas for research. The first concerns foreign policy analysis. Central to this thesis was its focus on the intra-state level of analysis through use of the decision units approach. Undercutting the rich detail yielded by this level of analysis is loss of comprehensiveness, a strength of systemic level approaches.7 This suggests a need to bring the systemic level back into the analysis. On their own, neither intra-state nor systemic level approaches offer a comprehensive explanation of how and why states act in international affairs. Rather than viewing the two levels of analysis as an ‘either-or’ choice, it is more productive to 7 As J. David Singer notes, “the systemic level of analysis, and only this level, permits us to examine international relations in the whole, with a comprehensiveness that is of necessity lost when our focus is 403 consider them as mutually reinforcing. Similar to the way an optometrist uses a phoropter to incrementally overlay lenses of different strength to produce a clearer image, by combining explanations from the intra-state and international levels the analytical ‘lens’ through which to view foreign policy decision-making and government behaviour becomes sharper. The theoretical challenge, as Andrew Moravcsik puts it, is not whether to integrate the domestic and international levels of analysis, but how best to do it.8 While the thesis did not seek to develop a theoretical framework for such integration it did highlight an additional dimension of the challenge: the role of supra-national actors. In the case of the Spratlys dispute, this relates to ASEAN and the ARF. ASEAN was the principal forum for engagement with China on issues such as Mischief Reef and the code/declaration of conduct. In contrast, both China and Malaysia opposed substantive discussion of the South China Sea dispute in the ARF. Reflecting the importance China places on ASEAN was the release on 8 October 2003 of a joint declaration on strategic partnership for peace and prosperity, signed in Bali by leaders from both sides.9 This foreshadows “comprehensive and forward-looking cooperation focusing on politics, economy, social affairs, security and international and regional affairs.”10 Within the security domain, the two sides agreed to “hold, when appropriate, ASEAN-China security-related dialogue to enhance mutual understanding and promote peace and security in the region”.11 They also committed themselves to implement the Declaration on the Conduct of Parties in the South China Sea as well as to discuss and shifted to a lower, and more partial level.” Singer, “The Level of Analysis Problem in International Relations”, p. 80. 8 Andrew Moravcsik, “Introduction. Integrating International and Domestic Theories of International Bargaining” in Peter B. Evans, Harold K, Jacobson, Robert D. Putnam (eds), Double-Edged Diplomacy. International Bargaining and Domestic Politics, University of California Press, Berkeley, Los Angeles and London, 1993, p. 9. 9 Joint Declaration of the Heads of State/Government of the Association of Southeast Asian Nations and the People’s Republic of China on Strategic Partnership for Peace and Prosperity, Bali, Indonesia, 8 October 2003, < 404 plan the modalities, areas and projects for follow-up action.12 China supported ASEAN’s role as the driving force of the ARF and the ASEAN+3 forum was affirmed as the principal channel to progress cooperation and regional economic integration in East Asia and Asia as a whole.13 The day before the joint declaration was issued ASEAN held its Ninth Summit and unveiled a new concept: an ASEAN Community. This is founded on three pillars: an ASEAN Security Community (ASC) “to bring ASEAN’s political and security cooperation to a higher plane”, a single market and production base ASEAN Economic Community (AEC) to be realised by 2020 and an ASEAN Socio-cultural Community (ASCC) of “caring societies”.14 Concerning the ASC, Paragraph 5 of the Bali Concord II states: Maritime issues and concerns are transboundary in nature, and therefore shall be addressed regionally in [a] holistic, integrated and comprehensive manner. Maritime cooperation between and among ASEAN member countries shall contribute to the evolution of the ASEAN Security Community.15 (italicised emphasis added.) In this context, the need to establish an ASEAN maritime forum is recognised.16 12 Ibid., Paragraph 4c. 13 Ibid., Paragraphs 5b and c. 14 Declaration of ASEAN Concord II (Bali Concord II), Bali, Indonesia, 7 October 2003, < 405 More broadly, the significance of supra-national actors relates to their extended geographical, policy and regulatory reach over time to encompass areas as diverse as combating money laundering,17 responding to climate change18 and establishing a common foreign and defence policy for European Union member states.19 In addition, they have been able in instances to broker regional solutions to regional issues, strengthening ‘ownership’ and confidence among the parties. Accordingly, an integrative foreign policy analysis methodology needs to give analytical space to supra- national actors and acknowledge their role in bridging the domestic-international politics divide through the establishment of collective norms and ‘rules of the game’. At the same time, the implications of such arrangements for national sovereignty, regime legitimacy and public accountability are not insignificant. 17 In 1989 the G-7 established the Financial Action Task Force on Money Laundering (FATF) to examine money laundering techniques and trends, review existing actions at the national and international levels and identify new measures that should be introduced. An inter-governmental body, the task force’s secretariat is located in the Organisation for Economic Co-operation and Development. The Task Force monitors progress by its current membership of twenty-nine countries and territories in implementing anti- money laundering measures, reviews money laundering techniques and counter-measures and promotes the adoption and implementation of anti-money laundering measures internationally. A major product launched by the FATF in 1990 and updated in 1996 is the so-called Forty Recommendations. These provide a policy framework of counter-measures against money laundering, spanning the criminal justice system and law enforcement, the financial system and its regulation and international co-operation. Through national self-assessment of implementation efforts and multilateral peer review the FATF monitors progress made by member governments in implementing the Forty Recommendations. This summary is sourced from Organisation for Economic Co-operation and Development, Financial Action Task Force on Money Laundering, < 406 A second area for future research relates to the South China Sea dispute itself. One focus might be a decision units analysis of the three other claimants in the Spratlys unexamined here, that is Brunei, Taiwan and Vietnam.20 Such an analysis would share characteristics with the present study: regimes with different political systems and foreign policy decision-making processes, and use of different approaches to bolster claims. A different task is examination of the strategic and political interests of non- claimant states in the South China Sea and the implications for them arising from the dispute. Although analyses of US interests in the area exist,21 scholarly studies covering Australia, India, Indonesia, Japan,22 Russia, Singapore, South Korea and Thailand would be a welcome complement. The final area for future work concerns oceans governance. It is paradoxical that despite the hope that the LOSC would lead to order in the oceans, disorder and disharmony have endured. New maritime territorial disputes have emerged or old ones reinvigorated in the race to mark out national claims to ocean space and marine 20 For example in 1992 Taiwan established an inter-ministerial task force led by the Minister of the Interior to instutionalise decision-making on the South China Sea issue. While the group’s members included deputies from the Ministries of Foreign Affairs, National Defence, the Mainland Affairs Council and others, the fact that it was led by the Interior Minister signaled that the South China Sea was considered a domestic issue. On 10 March 1993 the government issued the Policy Guidelines for the South China Sea as the framework document to guide future action. See Kuan-Ming Sun, “Policy of the Republic of China towards the South China Sea. Recent developments”, Marine Policy 19(5), 1995, pp. 402-03 and p. 408. An analysis of the domestic and international politics relationship in Taiwan’s South China Sea policies is Kristen Nordhaug, “Explaining Taiwan’s policies in the South China Sea, 1988-99”, The Pacific Review 14(4), 2001, pp. 487-508. 21 See for example, Lee Lai To, “China, the USA and the South China Sea Conflicts”, Security Dialogue 34(1), 2003, pp. 25-38; Yann-huei Song, United States and Territorial Disputes in the South China Sea: A Study of Ocean Law and Politics, Maryland Series in Contemporary Asian Studies, Number 1-2002 (168), School of Law, University of Maryland, Baltimore, 2002; Chang Ya-Chun, “Beijing’s Maritime Rivalry with the United States and Japan: The Search for Institutionalized Mechanisms of Competition”. Issues and Studies 34(6), 1998, pp. 56-79. 22 Lam Peng Er’s article on Japan’s interests dates from 1996. An updated analysis would be useful. As an example of recent developments, the April 2003 edition of Modern Navy, a Chinese navy-affiliated military journal published for that service’s Political Department, suggested that Japan is seeking to expand its military influence in the South China Sea to protect its economic lifeline and argues that the real motive for Tokyo’s frequent dispatch of ships to the area is to bolster its military presence in southeast Asia. “China Journal Slams Japan’s Military Presence in S. China Sea”, Jiji Press English News Service, 1 April 2003. Lam Peng Er’s article was published as “Japan and the Spratlys Dispute. Aspirations and Limitations” Asian Survey XXXVI(10), 1996, pp. 995-1010. 407 resources.23 In this context, two types of study are suggested. First, a work that draws lessons about the legal, political and economic foundations of successful maritime boundary resolutions in different parts of the world. While differences in local circumstances undoubtedly arise, the value of such a study lies in its identification of core common elements that promoted agreement. The contribution of a study of this type is not trivial: of 70 maritime boundary delimitations required in East Asia only nine have been agreed to date.24 Second, an analysis of how and why management regimes form in some instances but not others where sovereignty and maritime jurisdiction remain unresolved. The Baltic and Mediterranean Seas are examples of the former, the South China Sea the latter. Insights from both types of work have scholarly and policy relevance. 23 For example, the oil factor has been invoked in the reinvigoration of the longstanding maritime border disputes involving Venezuela, Guyana and Suriname. See Mark Wilson, “Oil fuels border disputes in Carribbean conflict”, Jane’s Intelligence Review 12(10), 2000, pp. 47-49. 24 W.S.G. (Sam) Bateman, Strategic and Political Aspects of the Law of the Sea in East Asian Seas, Unpublished Ph.D. thesis, University of New South Wales at the Australian Defence Force Academy, Canberra, 2001, p. 277. In December 2000 China and Vietnam agreed to delimit their maritime border in the Gulf of Tonkin. A new development is the announcement that Indonesia and Vietnam expect to finalise shortly their shared border in the South China Sea near Natuna Island: “RI, Vietnam to finalize sea border agreement”, The Jakarta Post, 10 May 2003. 408 APPENDIX I: INTERVIEW QUESTIONS 1. What motivates your government’s claim to the Spratlys? What reasons support its claim and why are they invoked in particular? 2. Which actors within and outside government are pre-eminent in shaping decision-making on the Spratlys issue? Why are these actors given this status and by whom? 3. What political process is followed in discussion and decision-making on (i) domestic legal measures relating to the Spratlys; (ii) position on the code of conduct? Do the decisions from this process reflect consensus or compromise? 4. To what extent has external behaviour been influenced by domestic political considerations? Why or why not? Is the behaviour specific to the Spratlys issue or related to broader political, economic and security interests of the government? What motivates this? 5. In respect of enactment of domestic legal measures, occupation of Mischief Reef and negotiation of the code of conduct, what has been the individual and/or collective role in policy decision-making of: (i) political leaders; (ii) government ministry’s/special advisers; and (iii) political opposition inside and outside the ruling party, e.g. factions, military, opposition political parties? Has the influence of one or more of these actors been issue- or time-dependent and if so, in what way(s)? How has division been handled? 6. What role have other stakeholders played and what has been their effect? (e.g. business, academics, public.) How important is the support of these stakeholders to the government maintaining or changing its position on the Spratlys? How has the government justified its external behaviour to different domestic audiences? With what results? 409 7. How has the government sought to rally political and public support for its actions? How successful has this been? Is this support a general phenomenon, or situational or time related, or dependent on performance in other areas of public policy? 8. What role does the international environment play in conditioning your government’s position on the Spratlys? What factors in the international environment might prompt change in the domestic political position on the Spratlys? APPENDIX II: LIST OF PERSONS INTERVIEWED Arcamo, Sandra, Chief, Fisheries Resource Management Division, Bureau of Fisheries and Aquatic Resources (Interviewed Manila, 5 December 2001). Baviera, Aileen, Associate-Professor, Asian Centre, University of the Philippines (Interviewed Manila, 3 December 2001). Chu, Shulong, Professor, School of Public Policy and Management, Tsinghua University (Interviewed Beijing, 17 October 2001). Gao, Zhiguo, Professor and Executive Director, China Institute for Marine Affairs, State Oceanic Administration (Interviewed Beijing, 16 October 2001). Hamzah, B.A., Maritime Consultant and former Director-General, Maritime Institute of Malaysia (Interviewed Kuala Lumpur, 12 October 2001). Herriman, Max, Chief Executive Officer, Sea Resources Management SDN BHD (Interviewed Kuala Lumpur, 9 October 2001). Jawhar, Dato Mohamed bin Hassan, Director-General, Institute of Strategic and International Studies Malaysia (Interviewed Kuala Lumpur, 10 October 2001). 410 Lim, Benito, Professor, Asian Centre, University of the Philippines (Interviewed Manila, 3 December 2001). Mak, Joon-Num, Director of Research, Maritime Institute of Malaysia (Interviewed Kuala Lumpur, 9 October 2001). Meir, Francisco, Assistant Director-General (Policy and Strategy), National Security Council (Interviewed Manila, 5 December 2001). Sarne, Emma, Director, Department of Foreign Affairs (Interviewed Manila, 29 November 2001). Tomas-Tayao, Princess, Head, Security and Strategic Studies Section, Foreign Service Institute, Department of Foreign Affairs (Interviewed Manila, 4 December 2001). 411 APPENDIX III: CHINA’S DRAFT CODE OF CONDUCT IN THE SOUTH CHINA SEA, OCTOBER 1999 The Government of the People’s Republic of China and the Governments of the member states of ASEAN. REAFFIRMING their determination to consolidate and develop the friendship and cooperation among Asian people, who have a similar tradition, and to establish a 21st century-oriented partnership of good-neighborliness and mutual trust; RECOGNIZING that permanent peace, stability and prosperity in the Southeast Asian Region serve the fundamental and long-term interests of their countries; CONSCIOUS of their common responsibility for and firm commitment to peace, stability and prosperity in Southeast Asia; WISHING to promote the region’s economic growth and prosperity, enhance mutual friendship and cooperation among people in the region, and establish a peaceful, friendly and harmonious environment in the South China Sea; DESIRING to create favorable conditions for final resolution of differences and disputes between the countries concerned; and PROCEEDING from the objectives and principles set forth in The 1997 Joint Statement of the Meeting of the President of the People’s Republic of China and the Heads of State/Government of the Member States of ASEAN, HAVE AGREED To adopt and abide by the following Code of Conduct in the South China Sea: 412 1. The purpose and principles of The Charter of the United Nations, the Five Principles of Peaceful Coexistence and other universally recognized principles of international law shall serve as the basic norms governing state-to-state relations; 2. Explore ways for building trust and confidence and for resolving differences or disputes by peaceful means in accordance with the above principles and on the basis of equality and mutual respect; 3. Refrain from use or threat of force, or other action that may affect the good- neighborly and friendly relations among countries, and regional stability; 4. Disputes relating to the Nansha Islands shall be resolved by the sovereign states directly concerned through bilateral friendly consultations and negotiations, and in accordance with universally recognized international law, including The 1982 UN Convention on the Law of the Sea; 5. In order to maintain peace and stability in the region, the parties concerned shall, pending the settlement of disputes, continue to exercise self-restraint and handle their disputes and differences in a cool and constructive manner and through diplomatic channels, and refrain from taking actions that will complicate or magnify the disputes; 6. The countries concerned shall, in a spirit of “putting aside disputes and engaging in joint development”, explore or carry out cooperation in areas such as marine environmental protection, marine scientific research, safety of navigation and communication at sea, exploration and exploitation of resources, search and rescue operations, and combating transnational crimes (including but not limited to, trafficking in illicit drugs, piracy and armed robbery at sea, and illegal traffic in arms); 413 7. The countries concerned shall be encouraged to develop bilateral fishery cooperation, establish channels of consultation and dialogue over issues that may arise in fishing operation, and manage and resolve fishing disputes through consultation. Refrain from use or threat of force, or taking coercive measures, such as seizure, detention or arrest, against fishing boats or other civilian vessels engaged in normal operation in the disputed areas, nor against nationals of other countries thereon. Just and humane treatment shall be guaranteed to these nationals; 8. The countries concerned shall hold dialogues and exchanges of views between or among their high level defense and military officials; 9. Refrain from conducting any military exercises directed against other countries in the Nansha Islands and their adjacent waters, and from carrying out any dangerous and close-in military reconnaissance. Military patrol activities in the area shall be restricted; 10. Maintain safety of international navigation in the South China Sea and ensure freedom of navigation of ships and aircraft in normal passage in accordance with universally recognized international law and the relevant principles and provisions of The UN Convention on the Law of the Sea; 11. China and ASEAN member states are ready to continue their dialogues on the relevant issues, including this Code of Conduct, so as to enhance transparency and promote harmony, mutual understanding and cooperation; and 12. The Parties undertake to abide by the provisions of this Code of Conduct and take actions consistent therewith. 414 APPENDIX IV: ASEAN’S DRAFT CODE OF CONDUCT IN THE SOUTH CHINA SEA, NOVEMBER 1999 The Heads of State and Government of the member states of ASEAN and the People’s Republic of China: COGNIZANT of the need to promote a peaceful, friendly and harmonious environment in the South China Sea for the enhancement of stability, economic growth and prosperity in the region; COMMITTED TO the spirit and principles of international law, the Charter of the United Nations, the 1982 U.N. Convention on the Law of the Sea, the Treaty of Amity and Cooperation in Southeast Asia, the Five Principles of Peaceful Coexistence, and the ASEAN Declaration on the South China Sea; REAFFIRMING respect for the freedom of navigation and air traffic in the South China Sea, as provided for by international law, including the 1982 U.N. Convention on the Law of the Sea; and WISHING TO FURTHER enhance the principles and objectives of the 1997 Joint Statement of the Meeting of the Heads of State/Government of the Member States of ASEAN and President of the People’s Republic of China. HEREBY ADOPT the following Code of Conduct in the Disputed areas of the Spratlys and the Paracels in the South China Sea, hereinafter referred to as the Disputed Area. 1. The Parties concerned undertake to resolve disputes relating to sovereignty or jurisdiction in the Disputed Area by peaceful means, without resort to the use of force or threat of the use of force, on the basis of respect for sovereignty, equality and mutual respect among nations, and non-interference into each other’s 415 internal affairs, consistent with the recognized principles of international law, including those in the 1982 U.N. Convention on the Law of the Sea; 2. The Parties concerned undertake to refrain from action of inhabiting or erecting structures in presently uninhabited islands, reefs, shoals, cays and other features in the Disputed Area; 3. The Parties concerned undertake to exercise self-restraint in the conduct of activities that affect peace and stability in the Disputed Area and to handle their differences in a constructive manner; 4. The Parties concerned undertake to intensify efforts to find a comprehensive and durable solution to the disputes over the Disputed Area. Without prejudice to existing claims of sovereignty or jurisdiction, the Parties concerned undertake to seek ways, in the spirit of cooperation and understanding, to build trust and confidence between and among them, including: a. holding dialogues and exchanges of views as appropriate among defense and military officials of the Parties concerned; b. informing voluntarily other Parties concerned of significant policies and measures that affect the Disputed Area; and c. ensuring just and humane treatment of nationals of other Parties concerned who are either in danger or in distress in the Disputed Area. 5. Without prejudice to existing claims of sovereignty or jurisdiction, the Parties concerned may explore or undertake activities in the Disputed Area. These may include the following: 416 a. marine environmental protection; b. marine scientific research; c. safety of navigation and communication; d. search and rescue operations; and e. combating transnational crime, including, but not limited to, trafficking in illicit drugs, piracy and armed robbery at sea, and illegal traffic in arms. The modalities, scope and locations in respect of bilateral and multilateral cooperation should be agreed upon by claimant countries prior to their actual implementation. 6. The Parties concerned undertake to conduct consultations and dialogues concerning the Disputed Area through modalities to be agreed by them, including regular consultations on the observance of this Code of Conduct, for the purpose of promoting good neighborliness and transparency, establishing harmony, mutual understanding and cooperation; and achieving peaceful resolution and prevention of disputes among them. 7. Other countries and international organizations are encouraged to subscribe to the principles contained in this Code of Conduct. 417 APPENDIX V: DECLARATION ON THE CONDUCT OF PARTIES IN THE SOUTH CHINA SEA, NOVEMBER 2002 The Governments of the Member States of ASEAN and the Government of the People’s Republic of China, REAFFIRMING their determination to consolidate and develop the friendship and cooperation existing between their people and governments with the view to promoting a 21st century-oriented partnership of good neighborliness and mutual trust; COGNIZANT of the need to promote a peaceful, friendly and harmonious environment in the South China Sea between ASEAN and China for the enhancement of peace, stability, economic growth and prosperity in the region; COMMITTED to enhancing the principles and objectives of the 1997 Joint Statement of the Meeting of the Heads of State/Government of the Member States of ASEAN and President of the People’s Republic of China; DESIRING to enhance favourable conditions for a peaceful and durable solution of differences and disputes among countries concerned; HEREBY DECLARE the following: 1. The Parties reaffirm their commitment to the purposes and principles of the Charter of the United Nations, the 1982 UN Convention on the Law of the Sea, the Treaty of Amity and Cooperation in Southeast Asia, the Five Principles of Peaceful Coexistence, and other universally recognized principles of international law which shall serve as the basic norms governing state-to-state relations; 418 2. The Parties are committed to exploring ways for building trust and confidence in accordance with the above-mentioned principles and on the basis of equality and mutual respect; 3. The Parties reaffirm their respect for and commitment to the freedom of navigation in and overflight above the South China Sea as provided for by the universally recognized principles of international law, including the 1982 UN Convention on the Law of the Sea; 4. The Parties concerned undertake to resolve their territorial and jurisdictional disputes by peaceful means, without resorting to the threat or use of force, through friendly consultations and negotiations by sovereign states directly concerned, in accordance with universally recognized principles of international law, including the 1982 UN Convention on the Law of the Sea; 5. The Parties undertake to exercise self-restraint in the conduct of activities that would complicate or escalate disputes and affect peace and stability including, among others, refraining from action of inhabiting on the presently uninhabited islands, reefs, shoals, cays, and other features and to handle their differences in a constructive manner; Pending the peaceful settlement of territorial and jurisdictional disputes, the Parties concerned undertake to intensify efforts to seek ways, in the spirit of cooperation and understanding, to build trust and confidence between and among them, including: a. holding dialogues and exchange of views as appropriate between their defense and military officials; b. ensuring just and humane treatment of all persons who are either in danger or in distress; 419 c. notifying, on a voluntary basis, other Parties concerned of any impending joint/combined military exercise; and d. exchanging, on a voluntary basis, relevant information. 6. Pending a comprehensive and durable settlement of the disputes, the Parties concerned may explore or undertake cooperative activities. These may include the following: a. marine environmental protection; b. marine scientific research; c. safety of navigation and communication at sea; d. search and rescue operation; and e. combating transnational crime, including but not limited to trafficking in illicit drugs, piracy and armed robbery at sea, and illegal traffic in arms. The modalities, scope and locations, in respect of bilateral and multilateral cooperation should be agreed upon by the Parties concerned prior to their actual implementation. 7. The Parties concerned stand ready to continue their consultations and dialogues concerning relevant issues, through modalities to be agreed by them, including regular consultations on the observance of this Declaration, for the purpose of promoting good neighbourliness and transparency, establishing harmony, mutual understanding and cooperation, and facilitating peaceful resolution of disputes among them; 8. The Parties undertake to respect the provisions of this Declaration and take actions consistent therewith; 9. The Parties encourage other countries to respect the principles contained in this Declaration; 420 10. The Parties concerned reaffirm that the adoption of a code of conduct in the South China Sea would further promote peace and stability in the region and agree to work, on the basis of consensus, towards the eventual attainment of this objective. Done on the Fourth Day of November in the Year Two Thousand and Two in Phnom Penh, the Kingdom of Cambodia. For Brunei Darussalam For the People’s Republic of China (signed) (signed) Mohamed Bolkiah Wang Yi Minister of Foreign Affairs Special Envoy and Vice Minister of Foreign Affairs For the Kingdom of Cambodia (signed) Hor Namhong Senior Minister and Minister of Foreign Affairs and International Cooperation For the Republic of Indonesia (signed) Dr. Hassan Wirayuda Minister for Foreign Affairs For the Lao People’s Democratic Republic (signed) Somsavat Lengsavad Deputy Prime Minister and Minister For Foreign Affairs For Malaysia (signed) Datuk Seri Syed Hamid Albar Minister of Foreign Affairs For the Union of Myanmar (signed) Win Aung Minister for Foreign Affairs 421 For the Republic of the Philippines (signed) Blas F. Ople Secretary of Foreign Affairs For the Republic of Singapore (signed) Prof. S. 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