China's Territorial Disputes (35 page)

China’s move encouraged Vietnam, another oil importer, to invite tenders to develop the Thanh Long (Blue Dragon) and Dai Hung (Big Bear) fields adjacent to the Crestone operation in 1994.
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Until then, all of Vietnam’s oil production had come from a single offshore field that was developed with Soviet help in the 1980s. The Chinese contest that the oil fields to be developed lie within China’s claim of the South China Sea, in response to which Vietnam reiterates that the Crestone concession lies on its continental shelf. In July 1994, China blockaded a Vietnamese rig operating within the Wan’an Bei-21 block, which China had leased to Crestone three months before.
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In 1995, after Vietnam drove off a Chinese seismic survey ship in that Crestone block, Chinese warships blockaded a Vietnamese rig in the Blue Dragon area, which Vietnam had awarded to a consortium of American-Japanese oil interests led by Mobil.
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In April 1996, when the American oil company CONOCO negotiated for Vietnam’s blocks 133,134 and 135 which overlapped the Wan’an Bei-21 concession, China threatened to retaliate against the interests of CONOCO’s parent, Dupont, in China.
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The presence and involvement of foreign oil companies until now seems only to have fueled the dispute. Indeed, foreign oil companies should also have cause for concern that they may become pawns used by China and other regional countries to extend their influence in the South China Sea.

Although Malaysia and Brunei are both basically self-sufficient in petroleum, their domestic consumption of the fuel has been rising faster than production throughout the 1980s and 1990s.
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In July 2002, Malaysia’s state-owned oil major, Petronas, struck oil on the sea-bed off the coast of Borneo, in the contested jurisdiction of Brunei’s EEZ claim. Petronas subsequently awarded two blocks of the field to a subsidiary and Murphy Oil of the United States, while Brunei negotiated for prospecting rights with the French major Total and Royal Dutch/Shell to the same two blocks.
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The result was that, in March 2003, Brunei sent a gunboat to drive away a Murphy Oil drilling ship in the disputed area, and Malaysia retaliated by sending its naval craft to block the arrival of a Total ship.
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Discoveries such as this one could bring about more deep-water exploration for Southeast Asia, and even for China, thus involving Western oil companies and bringing their attendant interest and influence to bear on the dispute. With regard to the oil situation, the Philippines is in the direst straits, with a 95 percent dependency on imports and disappointing strikes in offshore drilling between Palawan and the Spratlys.
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Unsurprisingly, the Philippines has been a most vocal and active proponent of joint development of the Spratlys. Indeed, the president and the foreign secretary of the Philippines were prime movers behind the “ASEAN Declaration on the South China Sea” adopted at the group’s annual ministerial meeting in July 1992, by which declaratory states agreed to the principles of joint development, settling all disputes without the use of force, and refraining from further territorial acquisi-tions.
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Despite having endorsed the ASEAN declaration, China, aware of its market size and bargaining power
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its Southeast Asian neighbors and foreign oil companies, shrinks from entering into any cooperative arrangements the terms of which it feels it cannot dictate. Chinese premier Li Peng did say in a August 1990 press conference in Singapore that China was prepared to set aside the question of sovereignty to join with Southeast Asian countries in developing the marine and sea-bed resources surrounding the Spratlys. Still, China proceeded to sign contracts with foreign companies on oil and gas exploration without the participation of any other claimant state.

Track II

In the meantime, efforts at building confidence and security cooperation are being carried out by non-governmental organizations (NGOs) through so-called “Track II” channels in the Southeast Asian region. In parallel to the security dialogues that government ministers from ASEAN are having with officials from Asia-Pacific countries at its post-ministerial conferences (PMCs), Track II multilateral unofficial consultative meetings focus on political and security issues considered too sensitive or disputatious to be raised at Track I level. Two of the most well established and comprehensive second-track arrangements in the Asia-Pacific region are the Council for Security Cooperation in the Asia Pacific (CSCAP) and the annual “Asia-Pacific Roundtable” organized by the ASEAN Institute of Strategic and International Studies (ASEAN ISIS). These Track II processes are financed by both government and private academic institutions, foundations and think-tanks, and usually involve meetings of academics, journalists, business people, and government officials from foreign and defense ministries attending in their own capacity. With regard to the South China Sea dispute, China has demonstrated a preference for bilateral negotiations, where it feels it has more leverage over its counterpart. An important function of these informal discussions is to coax the Chinese into committing to multilateral arrangements.

The most relevant of these Track II arrangements for our purpose is the annual series of workshops on “Managing Potential Conflicts in the South China Sea” initiated in 1990 by Indonesia’s Foreign Affairs Department Research and Development Agency and funded by the Canadian International Development Agency. Indonesia was able to play the role of a neutral facilitator as it is the largest of the Southeast Asian countries in terms of land area and population, and it is not directly involved in the South China Sea territorial controversies. The first workshop, which met on the Indonesian island of Bali in January 1990, was basically an opportunity for officials, academics, and others from ASEAN and resource persons from Canada to meet, in their “private” capacity, and present their “personal” positions on furthering cooperation in the South China Sea.
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When the second workshop met in July 1991, the invitees included participants from China, Taiwan, Vietnam and Laos, in addition to those from the ASEAN states and Canada.

Since China is a major player in the dispute, and Taiwan maintains a military presence in the Spratlys, Indonesia thought it realistic and appropriate to include both countries in that workshop and subsequent ones. China would have uncompromisingly objected to Taiwan’s participation in an official forum, which is a good reason to keep the Track II status of the workshop series. Indonesia had also wanted to invite participants from Japan, for 70 percent of Japan’s oil imports pass through the South China Sea, and it stands to reason that the Japanese are concerned about possible attacks on their merchant vessels and oil tankers in the event of a conflict.
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However, China’s objection to Japan’s participation on grounds that it is not a regional Southeast Asian country, and so has no right to decide on regional issues, could not be surmounted. China does not want to internationalize the Spratly issue for fear of diluting its regional influence and complicating any moves toward eventual settlement. As in the past workshop, the question of sovereignty and boundary delimitation was once again avoided, although the participants did vow to seek peaceful means of resolving disputes, and at the workshop’s conclusion emphasized the importance of joint development of the region’s resources.
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The enactment of China’s Law on Territorial Sea in February 1992, declaring the disputed South China Sea islands to be Chinese territory, exposed China to particular scrutiny by participants from other countries in the third workshop of 1992. Two working groups were established to conduct resource assessment and marine scientific research of the Spratlys at the 1992 workshop, but no further action was taken after they reported their findings to the next workshop in 1993.
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By the eighth workshop in December 1997, altogether five working groups - the aforementioned two working groups plus the ones on marine environmental protection, navigational safety, and legal affairs - have been established.
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However, to date, the sovereignty issue has yet to be brought up and seriously debated at the workshops.

Since the purpose of the Indonesian workshops is to build confidence and develop cooperation among countries around the South China Sea, the organizers have been most careful to avoid discussions or debates on sovereignty claims, believing that the ensuing arguments would only produce more heated emotions than rational discussions. While this may have been a wise tactical move to lesson tension in the workshops, which might otherwise have floundered, skirting the sovereignty issue means that the participants have yet to discuss the most fundamental cause of conflict in the South China Sea. Disputes over sovereignty should have been, and must become in future, the primary focus of the workshops.

Although the governments of the participants are strictly speaking not obliged to act on the recommendations of the workshops, still, whatever cooperative measures that are devised by the participants need the support of their governments to have any realistic chance of being put in place. The individuals involved in the workshops are by and large influential opinion-leaders in their own countries with high-level political contacts gained through current or previous government service and personal associations with state leaders. Although participating in their private capacities, the stature of the workshop participants should hopefully carry weight in the reports and recommendations that they have to submit to their governments. Their opinions may be decisive in shifting the priorities of these leaders from contemplating confrontation to pursuing cooperation, although at present neither course of action seems very likely. At the very least, the Track II process provides a legitimate and respectable forum which allows for usually weak and ignored non-governmental voices to be heard concerning security and other international and domestic issues.

In a way, the Indonesian workshops epitomize the so-called “ASEAN way” of problem management, which specifically eschews the formal and structural confidence-building and arms-reduction institutional frameworks favored by Europeans and North Americans. ASEAN as a collectivity has developed an informal and unstructured “consultative process” whereby its leaders and top decision-makers may postpone a difficult issue or bypass a conflict situation, rather than resolve it, in the hope that divisive issues will be made irrelevant or innocuous by time or event. Since they came together as a group in 1967, the ASEAN states were able to put aside their conflicts and cooperate, without necessary solving those conflicts, for two interrelated reasons. First, they realized that, as small, weak states, intramural conflict would leave them open to potential destabilization from the superpowers and their ideological proxies in the region. Second, they recognized the benefits of augmenting their collective influence in the region by creating the appearance and even substance of a united front when dealing with outside actors. ASEAN has been arguably the most durable transnational economic/security regime outside Europe for the past thirty years, precisely because it is composed of weak states facing a common external threat. However, as the twenty-first century approaches, what ASEAN has to manage is not the threat of superpower intervention, foreign-supported local Communist movements, or Vietnam, which used to be ASEAN’s primary opponent when it occupied Cambodia in the 1980s but is now a member of the collective. Rather, what ASEAN has to manage is the rise of China as a major power, if not the major power in the South China Sea. The Indonesia workshops have previously built on that ‘ASEAN approach” by relying on informal contacts, avoidance of controversy, and incremental results.
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However, China is neither a member of ASEAN, nor a country facing an external security threat, at least not overtly. It is, rather, a growing economic and military power. Hence it is difficult to convince China of ASEAN’s concerns and rope it into the ASEAN process of issue avoidance and endless consultations. Furthermore, multilateral security cooperation has never been a historical diplomatic norm for China or Southeast Asian countries until very recently, and trust and cooperation among states and peoples take time to build up.

Chinese bureaucratic tangle in the South China Sea dispute

It is a well established observation in two-level games and other bargaining theories, that bureaucratic interests and preferences within a country often shift in response to external threats or opportunities. The struggle for the South China Sea islands resulted in just such a contest for influence between the military and the foreign affairs establishment, two major groups in Chinese politics, with respect to the drafting of China’s law on territorial waters in early 1992. Heated discussions reportedly took place between the top brass of the PLA and the PRC foreign ministry as the law was introduced in the NPC, China’s legislature.
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The PLA had, at that time, two representatives in the CCP Politburo, and since the mid-1980s, at least one representative on the CCP Central Committee’s Foreign Affairs Leading Small Group.
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However, the military’s enthusiasm for its burgeoning national security role could not apparently be contained within the highest echelons of power. The foreign ministry had preferred not to specify the islands claimed by China, in order to avoid diplomatic friction with countries disputing China’s claims; however, the general headquarters of the army, navy, the Guangzhou Military Region and Hainan Province insisted that principles must be maintained which would favor China in future negotiations.
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One scholar even argued that the act of creating Hainan Province was a declaration by Beijing of its determination to assert its claims to the natural resources in the South China Sea; for according to the “Decision to establish Hainan Province” adopted by China’s seventh NPC in April 1988, the Xisha (Paracel), Zhongsha (Macclesfield Bank), and Nansha (Spratly) island groups and their surrounding waters were specifically included in Hainan’s geographical boundary.
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In any case, the military’s argument carried the day.