The Impact of the Arbitral Tribunal Award on Peace and Security in the South China Sea Area and the World, by Carlyle A. Thayer (see below for full citation details), 6 December 2016.

This presentation is divided into five parts. Part one, the introduction, sets out the theoretical and geo-strategic framework of the presentation. Part 2 reviews the Award issued by the Arbitral Tribunal in the claim brought by the Philippines against China. Part 3 discusses the implications for the South China Sea area. Part 4 discusses the implications for the wider international community. Part 5 offers some concluding remarks.

Part 1. Introduction

This part is divided into two sections; the first discusses the theoretical framework for this presentation. The second section discussed the main drivers behind China’s assertiveness and militarization of the Spratly islands.

This presentation is framed by the influential writing of Hedley Bull in his book The Anarchical Society (1977). Bull argues that the central characteristic of the global political system is its anarchical nature because it lacks an effective world government with a monopoly on the use of force. This system operates mainly on the basis of a balance of power. At the same time, however, various states interact with one another and form a society of states (as distinct from a system of states). According to Bull, “when a group of states, conscious of certain common interests and common values, form a society… [and] conceive themselves to be bound by a common set of rules in their relations with one another, and share in the working of common institutions.” In summary, world order exists through the mechanisms of balance of power, international law, diplomacy, war and the central role of great powers.

There are four main drivers behind China’s policy of constructing artificial islands and militarization in the South China Sea: nationalism, fisheries, hydrocarbons and geo-strategic considerations. This presentation discusses each in term and argues that geo-strategic imperatives are the most important. China seeks to counter the naval hegemony of the United States in East Asian waters by developing sufficient military power to dominate the first island chain running south from Japan, Okinawa, Taiwan, and the Philippines. China seeks to dominate the South China Sea to protect its sea lines of communications and to secure its southern flank against intervention by the U.S. Navy and Air Force.

China’s artificial islands in the Spratly archipelago will serve as forward operating bases for Chinese fisheries and hydrocarbon industries as well as maritime law enforcement agencies. More importantly, the infrastructure on these artificial islands will support a growing military presence in the future.

Part 2. The Philippines-v-China Arbitration Award

This section discusses the main findings of the Award issued by the Arbitral Tribunal set up under Annex VII of the United Nations Convention on the Law of the Sea (UNCLOS) to hear the claims brought by the Philippines against China.

Maritime disputes in the South China Sea have been the prime source of regional tension in Southeast Asia since 2009. The main driver of these tensions has been China’s assertiveness in imposing its nine-dotted line ambit claim to well over half of the South China Sea and its claim to all the land features encompassed within this line.

In 2012 China’s investment – in a military sense – of Scarborough Shoal led to the Philippines decision to file a claim under Annex VII of UNCLOS seeking, inter alia, to clarify its entitlements.

On July 12, 2016 the Arbitral Tribunal issued its Award. This award is binding on both China and the Philippines and must be carried out immediately and is not subject to appeal. The Arbitral Tribunal’s Award may be grouped into five categories:

First, the Tribunal ruled that UNCLOS comprehensively allocates rights in the maritime domain and that China’s claim to historic rights, other sovereign rights and jurisdiction in the South China Sea enclosed by its nine-dotted line “are contrary to the Convention and without lawful effect” because they exceed the limits set by UNCLOS.

Second, the Tribunal ruled that none of the land features in the South China Sea were islands as defined by UNCLOS Article 121 and therefore were not entitled to a 200 nautical mile (nm) Exclusive Economic Zone (EEZ) or an extended continental shelf.

Third, the Arbitral Tribunal found that China was in breach of its obligations as a signatory to UNCLOS and as a flag state signatory to the International Maritime Organization’s 1972 Convention on the International Regulations for Preventing Collisions at Sea.

Fourth, the Arbitral Tribunal found that China failed to meet its obligations to protect and preserve the maritime environment in the South China Sea.

Fifth, the Arbitral Tribunal found that China’s construction of artificial islands after the Philippines lodged its claims in January 2013 aggravated and extended the legal dispute over maritime entitlements and protection and preservation of the marine environment.

UNCLOS contains no provisions for enforcement. As a result, because of China’s rejection of the entire compulsory dispute resolution process under UNCLOS, the Award is stillborn. China’s actions have undermined not only UNCLOS as the constitution for the seas but international law in general as an instrument in maintaining a rules-based global order. China’s actions suggest it has not yet been fully socialized into international society of states that value a rules-based international order.

Part 3. Implications for the South China Sea Area

The Arbitral Tribunal’s Award came after national elections in the Philippines and the inauguration of a new government headed by President Rodrigo Duterte. Duterte visited China and ended a two-year hiatus in relations. Preliminary agreement was reportedly reached to initiate bilateral discussions on their maritime disputes. Duterte has neither pushed China to implement the Award nor abandoned the Award. As a result, China has an incentive to moderate its behavior and curb further militarization of its artificial islands in the South China Sea. It remains to be seen what role – if any – the Award will play in managing maritime disputes between China and the Philippines.

Four other states have claims in the South China Sea: Taiwan (Republic of China), Vietnam, Malaysia and Brunei. One implication of the Award is that all claimants will come under international pressure to bring their maritime claims into line with international law, a necessary first step towards identifying and demarcating areas of overlap. As a result of the Award the scope of maritime claims has been considerably reduced leaving an area on undisputed high seas where there are no restrictions on freedom of navigation for military ships and aircraft.

China’s refusal to accept the Arbitral Tribunal’s Award does not set a reassuring precedent for other countries contemplating international litigation to resolve their maritime disputes with China. For example, Vietnam could seek to determine the legal status of features in the Paracel islands but if the Award went its way China could refuse to comply.

The Award has implications for the Association of Southeast Asian Nations (ASEAN) that had been conducting consultations with China on implementing a non-binding agreement known at the Declaration on Conduct of Parties in the South China Sea (DOC, 2002) and a legally binding Code of Conduct in the South China Sea (COC). The Philippines’ decision to take legal action against China, without prior consultations with other regional states, resulted in internal disunity in ASEAN.

Now that the Award has been issued it provides a normative and legal basis for ASEAN to press China to implement the DOC and reach agreement on the COC.

If China continues to curb its further militarization of the Spratly islands, the status quo would favor ASEAN in negotiations with China. The longer the status quo prevails, however, it will have the effect of undermining UNCLOS as a means of managing territorial disputes in the South China Sea and allow China to consolidate its presence on its artificial islands, two of which are low-tide elevations and not subject to appropriation.

Part 4. Implications for the International Community

Although the Award only concerns the Philippines and China, the Arbitral Tribunal’s clarification of the legal definition of what constitutes an island (entitled to a 12 nautical mile territorial sea and a 200 nautical mile Exclusive Economic Zone), rock (entitled to a 12 nautical mile territorial sea), and a low-tide elevation (not subject to appropriation) has global applicability. For example, excessive maritime claims made by Japan from Okinotorishima and by United States from Johnston atoll could be legally challenged.

China’s refusal to comply with the Award will bring it into conflict with major maritime powers, particularly the United States. The U.S. has a long-standing Freedom of Navigation (FON) program specifically aimed at challenging excessive claims to maritime space. Although the United States has not ratified UNCLOS it is official U.S. policy to observe UNCLOS as part of customary international law. The Arbitral Tribunal’s rejection of China’s nine-dotted lines will mean that the U.S. Navy could sail through the Spratly islands to assert its freedom of navigation on the high seas. The U.S. Navy could also sail quite close to China’s artificial islands – Mischief and Subi reefs – because they have been classified as low-tide elevations. U.S. FON operational patrols (FONOPs) could result in increased tensions with China if not a misadventure.

Irrespective of China’s rejection of the Award, all other major maritime powers will accept the Award. This Award will become part of international case law and influence all subsequent cases related to dispute settlement throughout the world.      It is unlikely that maritime powers will acquiesce in the face of China’s non-compliance otherwise they will undermine the very rules-based international order that they support.

It is an open question whether the Trump Administration will press allies such as Japan and Australia to join with the U.S. Navy in FONOPs.

Part 3. Conclusion

China’s rejection of compulsory dispute settlement mechanisms under UNCLOS has undermined the role of international law in restraining the behavior the major powers. This will result in a greater emphasis on realpolitik and balance of power by China and the United States.

If the Award of the Arbitral Tribunal is not upheld this will mean that international law  –UNCLOS in particular – will be depreciated as one of the means of maintaining global order. As a result, realpolitik and balance of power mechanisms will play a greater role in determining regional order in Southeast Asia. If this is the case it is likely that regional stability in the South China Sea area will be undermined by geo-strategic rivalry between a rising China under Xi Jinping and a resurgent America under Donald Trump. Such rivalry will undermine ASEAN’s self-proclaimed objectives of being central to the region’s security architecture and upholding Southeast Asia’s autonomy.

  • Carlyle A. Thayer, “The Impact of the Arbitral Tribunal Award on Peace and Security in the South China Sea Area and the World,” Presentation to International Conference on South China Sea Disputes: Award of the Arbitral Tribunal constituted under Annex VII to the United Nations Convention on the Law of the Sea (UNCLOS) and its Implementation,” sponsored by the Geneva Association, Centre International de Conférence Gèneve, Geneva, Switzerland, December 6, 20016.
  • The above paper may be accessed by clicking here.
  • The Power Point slides that accompanied this presentation may be accessed by clicking here.


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