Thayer South China Sea Continental Shelf Extension

Thayer Consultancy ABN # 65 648 097 123

Background Briefing: Vietnam and the South China Sea Carlyle A. Thayer September 6, 2009

[client name withheld] Question 1. Could you give us your assessment of recent developments in the South China Sea, especially after Vietnam’s submission to the United Nations Commission on the Limits of the Continental Shelf? Answer: Ever since the 1982 United Nations Convention on Law of the Sea (UNCLOS) was adopted into international law, it has been both a source of cooperation and contention. The provision for a 200 nautical mile Exclusive Economic Zone (EEZ) generated overlapping claims in the South China Sea. Once UNCLOS came into force littoral states began developing the capability to exercise control over their EEZs by acquiring naval patrol boats and surveillance aircraft. Many littoral states also occupied rocks and other features in the South China Sea. No two states with overlapping claims have taken their dispute to the international tribunal for resolution because this would mean an “all or nothing” solution. This has meant each state as become the jealous guardian of its sovereignty. This has resulted in friction and diplomatic tension from time to time when one state reacts to perceived infringement on its national sovereignty by another state. The United Nations Commission on the Limits of the Continental Shelf (UN CLCS) set a deadline of May 13, 2009 for littoral states to lodge claims for an extended continental shelf based on specific technical criteria. Submissions to the UNCLC do not affect territorial claims. China’s actions in protesting the claims made jointly by Malaysia and Vietnam and by Vietnam separately can only serve to block resolution of this issue by the UN CLCS. In other words, the status quo will remain. In is unrealistic for Vietnam to expect that a third party, even a neutral third party such as the UN CLCS, will resolve the matter definitively. A resolution of territorial, maritime and extended continental shelf claims can only be achieved by a political decision at the highest levels in Beijing and Hanoi (and other concerned capitals) to resolve the matter through negotiations. Question 2. Could you give us your analysis of recent actions by China, Vietnam, US and other countries recently and your appreciation of future developments? Answer: Tensions in the South China Sea have risen appreciably since 2007. Most of the blame for this rests with unilateral actions by China. In late 2007 China conducted provocative naval maneuvers in the Paracel Islands and then unilaterally declared jurisdiction over both the Paracel and Spratly islands by creating the Sansha administrative unit. Further, China exerted political pressure on BP and Exxon Mobile to stop exploration activities with Vietnam. This year, in a continuation of past activities, Chinese naval vessels confronted a US naval vessel, the USNS Impeccable, in waters off Hainan. A short time later a Chinese submarine that was observing multilateral naval exercises off the coast of the Philippines, collided with a towed sonar array attached to a US navy destroyer, the John S. McCain. China claims the USNS Impeccable was operating illegally in its exclusive zone. The United States considers EEZ waters to be international.

2 China’s action have caused the Obama Administration to issue a carefully worded warning to China that the United States will not be intimidated. In May, the Deputy Assistant Secretary of State Scot Marciel, stated bluntly that the US has “a vital interest in maintaining stability, freedom of navigation, and the right to lawful commercial activity in East Asia’s waterways” (emphasis added). The United States has rejected out of hand China’s claims to territorial waters and maritime zones that did not derive from a land territory. “Such maritime claims are not consistent with international law,” Marciel argued. And more pointedly, Marciel stated, “We object to any effort to intimidate U.S. companies”. A much stronger message to China has been delivered by Robert Scher, the Deputy Assistant Secretary of Defense. Also in May he outlined a four-point strategy. First, the United States will demonstrate “through word and deed” that the United States intended to remain “the preeminent military force in the region.” Second, the US Navy would continue to assert freedom of navigation by “deliberate and calibrated” actions by continuing its operations in China’s EEZs. Third, the United States would build “stronger security relationships with partners in the region, at both the policy level… and at the operational level by building partner capacity, especially in the maritime security area.” And fourth, the US would strengthen the military-diplomatic mechanisms it has with China to improve communications and reduce the risk of miscalculation. The Obama Administration has raised US-China relations to a new level by hosting the first Strategic and Economic Dialogue in Washington in July 2009 at multi-ministerial level. President Obama will also visit Beijing later this year to attend the APEC Summit. Finally, the Commander of the US Pacific Command and the Chief of the Australian Defence Force have agreed to invited China to join in trilateral military exercises. These would involve small scale land and sea forces. These high-level meetings provide the grounds for cautious optimism that the US and China can manage their maritime differences in the South China Sea peacefully. The US position rejecting the legal basis for China’s maritime claims is good news for Vietnam. It means that Chinese attempts to bully American companies doing business in Vietnam will be met by a strong response by Washington. Question 3. And what policy recommendations would you make to Vietnam to deal with current South China Sea issues? Should Vietnam adjust is relations with any of the external powers to deal with South China Sea issues? Answer: Vietnam must continue to acts on three levels – bilaterally, regionally and domestically. Vietnam and China have long-established diplomatic mechanisms, such as the ministerial-level Joint Steering Committee and high-level leadership exchanges, to engage with China. Vietnamese officials must adopt a long-term view and work patiently to keep existing tensions and frictions from getting worse. But further, Vietnam needs to articulate what its long-term objectives are. At regional level, Vietnam must continue to reinforce its present emphasis on coordination and cooperation with other littoral states such as Malaysia, Philippines, Brunei and Indonesia. And Vietnam has to ensure unity within ASEAN. Regional diplomacy should be aimed adding pressure on China to exercise restraint. But further, regional diplomacy should be aimed at rising the Declaration on Parties in the South China Sea to a Code of Conduct. This is a longterm objective. The new policy of the Obama Administration offers an opportunity for Vietnam to gradually expand its defence and security relations with the United States. There are straws in the wind. Vietnamese military officers recently visited a US aircraft carrier and the two air forces have held their first discussions. Vietnam should consider hosting low level exercises with the United States and other major powers. And finally, at the domestic level, Vietnam needs to ensure unity at home by keeping the public informed of government policy on the South China Sea and relations with China. This does not mean promoting anti-Chinese sentiment but rather setting out the historic and legal case for Vietnam’s actions. This past year there are signs that the Vietnamese media has been more proactive in raising such issues. Generally the public tends to view foreign policy issues in simplistic terms and demand their government take action. The Government needs to explain why such actions may be counter-productive and win over the public through

3 greater openness and transparency. Priority should be given to Vietnam’s intellectual and academic community.