UK company interested in exploration of disputed West Philippines Sea

Forum Energy Company (FEC) has made an expression of interest to the Palawan Council for Sustainable Development (PCSD) earlier this month to begin exploration for gas and oil in the disputed West Philippines Sea. The company, which boasts a number of projects in the Philippines, can already navigate 18 miles off the coast of Palawan, under the conditions set out in its Service Contracts 40 and 72. FEC presented its case to the directors of the PCSD at the Sangguniang Panlalawigan Session Hall on 2 August.

Governor of Palawan Jose Alvarez, who attended the presentation, reassured FEC that it would not restrict the company's efforts to explore further afield offshore Palawan, instead urging caution and care, particularly in relation to the natural environment, insisting that the PCSD would fully support pro-development projects on the condition that they were non-intrusive and benefitted the local community. Regarding the safety of the UK oil firm's employees in the waters of the highly disputed West Philippine Sea, Chief of Staff of the Western Command, Colonel Emmanuel Salamat, claimed that the strong Philippine military presence in the area would ensure the security of FEC's offshore operations.

China lays claim to, and has de facto control of, virtually the entire South China Sea, despite the claims of a total of six countries to maritime territory in the South China Sea. This horseshoe-shaped area, delineated by China's so-called “nine-dash line”, stretches over a vast area that Beijing claims historical rights to. Secretary of Foreign Affairs, Albert Del Rosario, argues that this territory encompasses not only the entire South China Sea but also violates Philippine rights to a Territorial Sea and Contiguous Zone, an EEZ and a continental shelf, as stipulated by UNCLOS.

Last year saw a standoff involving Chinese military ships and Philippine vessels after the former took control of the Scarborough Shoal, referred to by China as Nansha, over 500km due West of Manila. The Philippines also lay claim to the Spratly Islands, which lie in the vicinity of Palawan, under the legal justification of Res Nullius. Beijing insists on its “indisputable sovereignty over the islands in [the] South China Sea and its adjacent waters” and has refused calls by its maritime neighbour to settle the dispute through arbitration.

China and the Philippines in South China Sea stand-off

Ships from China and the Philippines are engaged in a stand-off over a remote and disputed shoal in the South China Sea. Despite the tension, both sides are pledging a diplomatic solution.

A warship from the Philippines approached the Scarborough Shoal, off the country’s northwestern coast, on 7 April as part of a routine patrol. There it found eight Chinese fishing boats, and upon boarding them claimed to have found illegally-caught fish and coral.

Two Chinese surveillance boats then arrived and blocked the Philippine warship from arresting the fishermen. A third arrived on 11 April, whilst the Philippines sent a second vessel to back up its warship on 12 April.

 

The situation is reportedly tense, with the fishermen essentially blockaded onto the uninhabited shoal. The Chinese media has taken a bellicose stance, warning that it will “react accordingly” in the event of a military clash and accused Manila of taking a “radical approach”.

Chinese state media and government officials have also been insistent that the shoal belongs to China. Filipino Foreign Secretary Albert Del Roasrio, meanwhile, said that the shoal “is an integral part of Philippine territory”.

The dispute over ownership reflects a much wider dispute over maritime borders in the South China Sea. China claims vast tracts of the sea, including its many island chains, largely due to the extensive oil and gas resources which are believed to lie beneath them.

 

Despite the confrontation, both Manila and Beijing have stated their commitment to a diplomatic solution. Filipino officials have reportedly proposed a compromise solution, although details have not been made public and China has not formally responded.

 
The situation is likely to cool down but it underscores the rising tensions across the South China Sea, where relations China and US-backed states are increasingly fraught. Manila recently called for a coordinated stance by South-East Asian states on the South China Sea, before entering into discussions with China on maritime borders.

Sources: Guardian, BBC, Global Times, Reuters

More confrontation and collaboration in the South China Sea

A South Korean coastguard was stabbed to death by Chinese fisherman on 11th December, even as Beijing began joint patrols along the Mekong River with Burma, Laos and Thailand.

The South Korean coastguard was killed when his vessel sought to detain the Chinese fishermen, who were fishing illegally near South Korea's territorial waters. It comes after South Korea announced a crackdown: 430 Chinese vessels have been seized for illegal fishing this year, up from 370 last year. A number of clashes have occurred but this is the first time that a member of the coastguard has been killed while detaining fishermen.

Seoul has lodged a formal protest with Beijing. The incident is likely to stir tensions between the two neighbours, and be seen as further evidence of China's lack of regard for maritime boundaries in the South China Sea. Similar incidents in 2010 provoked a serious diplomatic crisis between Japan and China.

Elsewhere, however, China is demonstrating a willingness to cooperate with South-East Asian states. Following the death of 13 Chinese sailors on the Mekong river in October (believed to be by drug smugglers), Chinese forces have begun joint patrols along the Mekong, in conjunction with their counterparts from Thailand, Burma and Laos.

The extent of their jurisdiction and their authority is so far unclear. Most regional states are wary of Chinese intentions and would be unwilling to allow Chinese police to kill or arrest their citizens on local soil. Regardless of the specifics, the patrol marks a major step forward for China's security forces in operating overseas.

Sources: BBC, Wall Street Journal

China and India in tussle over Vietnamese oilfield

 The exploration of oilfields off Vietnam's coast by India's state energy firm has provoked a stern response by China, opening yet another front in the contest over maritime boundaries in the South China Sea.

India's ONGC is working with PetroVietnam on exploring a block close to the disputed Vietnam-China maritime border. At the time the contract was won, back in 2006, China protested that the area was within its waters. Now, ONGC's return to the area after a pause for technical reasons has resulted in a number of outspoken warnings by China.

The state-run Global Times, a Chinese newspaper, published an editorial accusing India of a “serious political provocation” which could “push China to the limit”. The foreign ministry in Beijing has also said that India's actions were “illegal and invalid”. New Delhi has brushed off the warnings, saying that its actions are in line with international law and that the block is within Vietnamese waters.

The spat is another escalation in tensions between China and its neighbours in the South China Sea, of which it claims a significant area. Vietnam has been a particular focus of Beijing's ire, with a summer marked by tit-for-tat naval drills and mutual recriminations.

They appeared to make up in early September, with an agreement to compromise through friendly consultations, but the rapprochement seems to have fallen apart just as quickly. On 13th September, Hanoi also announced that it would start conducting joint patrols with Indonesia along their mutual border, in a bid to shore up stability in the area.

On 23rd September, the Philippines announced that their efforts to forge a common position among South China Sea states had been successful, with delegates from the Association of Southeast Asian Nations agreeing that the UN Convention on the Law of the Sea should be used to settle regional territorial disputes.

Growing concern at China's claims and gunboat diplomacy is creating an opportunity for India in the region, as the ONGC episode shows. New Delhi is becoming increasingly confident in its dealings with China, and has the potential to begin acting as a counterweight to Beijing for smaller states in the area.

Sources: AFP, Wall Street Journal, Times of India, Global Times

China, Philippines positive on defusing South China Sea tensions

China and the Philippines are closer to settling a long-running dispute over their maritime boundary, after a state visit by Philippine President Beningno Aquino to Beijing which began on 31st August. During the visit Aquino, who this summer has been bullish towards China, struck a conciliatory note. Calling for greater economic links between the two states, he announced that “the Philippines is indeed open for business”.

The Philippine President is accompanied by 300 business leaders in an attempt to boost bilateral economic relations, anticipating an increase to $60 billion in five years, up from $27.7 billion in 2010. 

However the main focus of the visit is on the contested border in the South China Sea, where the Philippines – like many other Southeast Asian states – are at loggerheads with Beijing over maritime boundaries and the ownership of the isolated Spratly Islands. Disputes over the islands, or rather the extensive oil and gas reserves believed to lie beneath them, are a potential flashpoint for conflict.

Aquino and his Chinese counterpart Hu Jintao released a joint statement on 1st September, in which they “agreed not to let the maritime disputes affect the broader picture of friendship and cooperation” and “reiterated their commitment to addressing the disputes through peaceful dialogue”. Although this is standard diplomatic boilerplate, Aquino did reveal some signs of progress the previous evening. 

Speaking to reporters after meeting Hu, Aquino revealed that China is now calling for a legally binding code of conduct for all nations operating in the South China Sea. This would go beyond the non-binding 'guidelines' which regional states had agreed on at a meeting of the Association of Southeast Asian Nations (ASEAN) in July. Aquino was buoyed by the news, calling the Chinese proposal “very significant”. Hu also contributed to the positive atmosphere, calling for the South China Sea to develop into “a sea of friendship, peace and cooperation”. 

A legally binding code of conduct would be difficult to draw up, if the wrangling over the July guidelines is any guide. Disagreements between the ASEAN nations ensured that the proposals were ambiguous and vague. Other regional states will be watching carefully to see if China's proposed code of conduct would favour Beijing or be designed to exclude the US, which has backed the smaller states, from regional affairs. Given China's assertive stance in the South China Sea, it is unlikely to make any concessions. 

In any case, a code of conduct would be extremely difficult to enforce. Most regional states have strayed from the spirit if not the letter of the 'Declaration on the Conduct of Parties in the South China Sea', agreed in 2002. It would be surprising if a legally binding code of conduct would seem sacrosanct when other legal tools, such as international arbitration, have yet to prevent regional disputes and confrontations.

Sources: AFP, Reuters, Bloomberg, Xinhua

Border Focus: South China Sea

Chinese actions have led to protests in Vietnam

What is disputed?

The South China Sea (known as the East Sea in Vietnam) is a semi-enclosed sea in the Pacific Ocean, and covers over 3.5 million square kilometres.

Seven states make claims to part or all of the South China: China, Republic of China (Taiwan), Vietnam, Malaysia, Indonesia, Brunei and the Philippines. China makes the biggest claim: Beijing sees 80 per cent of the region as historically belong to it. The dispute has led to numerous navel clashes over the past 50 years and plenty of diplomatic tension.

While ownership of the sea itself is disputed, there are also territorial disputes in the region, the two most important of which revolve around the Spratly Islands and the Paracel Islands.

The Spratly Islands are a group of more than 750 reefs, islets, atolls, cays and islands, which lie between Vietnam, the Philippines, China, Malaysia and Brunei. There are no native islanders, although some 45 islands are occupied by military forces from Vietnam, China, Taiwan, Malaysia and the Philippines.

The Spratlys are claimed in full by China, Taiwan and Vietnam, and in part by Malaysia, the Philippines and Brunei (who claim a fishing zone around Louisa Reef). Various islands within the Spratlys are currently administered by China, Taiwan, Vietnam, Malaysia and the Philippines.

The Paracel Islands are a much smaller grouping of islands, made up of some 30 islets and reefs. The archipelago is a similar distance from the coastlines of Vietnam and China (through its southern-most island of Hainan). Taiwan, Vietnam and China all claim the islands, although China has administered them since 1974.

Why is it disputed?

The South China Sea is the second busiest shipping route in the world (after the Mediterranean) and the economies of the Asia-Pacific region depend on the daily journeys of up to 200 large-tonnage ships that come through the waters.

It also contains vast hydrocarbon reserves: it has 7.7 billion barrels of proven oil, with an estimated 28 billion barrels in total. Natural gas reserves are estimated to total around 266 trillion cubic feet.

The area is also significant in terms of fish stocks and marine biodiversity.

What is the history of the dispute?

What is at issue in the South China Sea is a conflict between what some countries see as historically belonging to them, or at least lying within their sphere of influence, and other countries applying modern international maritime law.

In 1982, the UN adopted its Convention on the Law of the Sea which accepted a 200 nautical mile Exclusive Economic Zone (EEZ). If no country is assumed to own the disputed islands, most of the Spratlys would fall into the Philippines and Malaysia's EEZ, whereas the Paracels lie in Vietnamese and Chinese waters.

Vietnam, Taiwan and China, however, claim the disputed islands as their own based on 'historic rights' which would then give them the right to claim the waters around the islands.

The idea that any country can claim the region based on 'historic rights' is hard to justify, given that the islands were viewed as little more than uninhabitable hazards to fishermen until the twentieth century.

Interest in the two archipelagos heated up in the 1930s when China released official maps which showed the whole region as Chinese territory, despite the fact that France, then ruler of Indochina, actually governed both archipelagos.

China claimed that its southernmost maritime boundary was 4 degrees north latitude, thus extending all the way south to include the James Shoal, which lies just north of Malaysia.

China released its famous 'U-shaped' map in 1947, which outlined its claims to the region. It started as an 11-dotted line map, but was amended to a nine-dotted line in 1953, omitting claims over some of the Gulf Of Tonkin, which has since seen a maritime boundary agreed between China and Vietnam.

At the 1951 San Francisco Conference, set up to end the war between Japan and the Allied Powers, Japan renounced all claims to the islands. A proposal to return both archipelagos to China was put forward, but was rejected.

In 1956 the picture became further unclear as a retired Filipino admiral took possession of four fifths of the Spratly archipelago on behalf of the Philippines.

Vietnam and China fought for dominance of the Paracels throughout the 1950s and 1960s, however in 1974 China took advantage of internal instability in Vietnam and took full control of the island group.

Vietnam and Taiwan had occupied some of the Spratly islands since the end of WWII, however in 1988, China used its navy to occupy a number of islands Vietnam had previously administered.

In 2002, ASEAN and China signed the Declaration on the Conduct of Parties in the South China Sea (DOC), in which all sides agreed to seek peaceful solutions to disputes.

A number of states have submitted what they see as their territory to the UN Commission on the Limits of the Continental Shelf. China submitted a note, with a map of the nine-dotted line, in 2009, to which Vietnam immediately protested.

What has happened recently?

Tension has risen over the disputed islands in recent years, as states have looked more closely at the potential gains from confirmed ownership. Last July, US Secretary of State Hillary Clinton said the US supported freedom of navigation in the area and offered to facilitate multilateral talks on the dispute, an offer which was sharply rebuked by China.

In March 2011, two Chinese patrol boats confronted a Philippino vessel in Reed Bank, near the Spratly Islands. The Philippines sent two aircraft to the area, and filed a protest with the UN.

In May, China was accused of aggression again, when video footage emerged of a Chinese boat appearing to cut the cables of a Vietnamese oil exploration ship, the Binh Minh 02.

The incident prompted anti-China protests in China, and both Vietnam and the Philippines have carried out military exercises near disputed waters in recent months.

The Phillipines' President Benigno Aquino said in July that his country will defend what it sees as its territory, and that it will shore up its military capabilities to ensure it is able to do so. There has been talk of the US supporting the Philippines's military.

The South China Sea has become the crucial talking point on whether China's rise can be peaceful, and Beijing's insistence that foreign powers – primarily the US – stay out of the discussion is not winning it any friends. Indeed, it seems to be pointing the other claimants closer to the US, and heightening regional tensions.

For further information, including possible settlement routes, see the full Border Focus, here.

 

China sends in patrol ship as Vietnam carries out live fire drills in South China Sea

Vietnam held military drills in disputed territory

Tension continues to increase between China and other countries bordering the disputed South China Sea, as China sent one of its biggest civilian maritime patrol ships into the region on Wednesday 15th June.

The Ta Kung Pao, a Hong Kong newspaper controlled by Beijing, said the Haixun-31 would travel to Singapore, and while an exact route was not laid out, it is understood that the ship would pass near the disputed Paracel and Spratly islands groups.

 

“It [the Haixun-31] will protect national maritime rights and sovereignty,” according to the newspaper.

What the Chinese are calling a routine patrol has come at a time of almost unprecedented tension after Vietnam held war exercises in the waters of the South China Sea using live ammunition on Monday, 12th June. Drills were carried out on a number of islands in the Spratly archipelago that Vietnam administers.

This current wave of hostility started on 27th May, when Vietnam accused a Chinese patrol boat of cutting the cables of an oil exploration ship. On 9th June, Vietnam said a similar incident had occurred. China claimed Vietnam had illegally entered its waters and endangered Chinese fishermen's lives.

The Philippines is also going through a period of increased tension with China. In early June, the Philippines accused China of erecting poles, placing a buoy and leaving building materials in disputed waters.

The Philippine's President Benigno Aquino's office recently said it was renaming the South China Sea the 'West Philippine Sea' in light of its claims.

China, Taiwan, Brunei, Malaysia, the Philippines and Vietnam claim all or part of the sea. It is an area rich in fish, oil and gas, and is one of the busiest shipping routes in the world.

As China's power in the region has grown, many states have formed closer relations with the US, and issues like the South China Sea will be a crucial test in whether China's rise can be as peaceful as it insists it will be.

Aquino, for example, said the Philippines would look to the US for support in the South China Sea dispute. In a press conference on 14th June he said “Perhaps the presence of our treaty partner, which is the United States of America, [will] ensure that all of us have freedom of navigation, to conform to international law.”

Vietnam has also called on the US to help resolve territorial disputes in the region, however China has rejected this, saying it "opposes any country unrelated to the South China Sea issue meddling in disputes, and it opposed internationalization of the South China Sea issue."

Beijing has said the dispute can be resolved through direct discussions and has insisted it will not use force.

Sources: BBC News, Guardian, Open Security, People's Daily, Upstream

For more information, please see the Menas Borders website, here.

Chinese and Vietnamese ships clash in South China Sea

A confrontation between a Vietnamese oil and gas survey ship and a Chinese patrol boat on 26th May has brought the issue of sovereignty of the South China Sea back to the forefront of leaders' minds, just before the start of a regional security conference.

Vietnam accuses the Chinese boat of deliberately cutting the survey ship's cables in Vietnamese waters. China denies the allegation.

The clash occurred some 120 km off the south-central coast of Vietnam and 600km south of China's Hainan island.

PetroVietnam, who operates the ship, called the Binh Minh 02, released footage of the event. A boat clearly marked China Marine Surveillance is seen approaching the Binh Minh 02. The ship's captain, Alexander Belov, is heard yelling at the Chinese ship and telling them to stay away from the cable.

The South China Sea, where the clash occurred, is claimed by a number of States, including China and Vietnam. The region is an important shipping route and is thought to contain large oil and gas reserves.

Both country's have reasserted their position after the clash. Vietnamese foreign ministry spokeswoman Nguyen Phuong Nga said “The Vietnamese navy will do everything necessary to firmly protect peace and the independence, sovereignty and territorial integrity of Vietnam.”

China's foreign ministry hit back, saying Vietnamese oil and gas operations “undermined China's interests and jurisdictional rights.”

The row comes just days before a regional security conference in Singapore, which aims to promote cooperation and stability in the Asia Pacific region.

Sources: BBC News, IISS, Sydney Morning Herald, Vietnam News Agency, Xinhua

For more information, please see the Menas Borders website, here.

China warns against the Philippines' Spratly Islands exploration

Oil exploration around the Spratly Islands has long been controversial, as ownership over the territory is contested by six littoral states, but the situation has heated up considerably in March.

On Wednesday 23rd March, the Philippines' Department of Energy said that the UK-based Forum Energy had completed a seimic survey of the Reed Bank, near the disputed island group.

Manilla followed up the announcement with plans for possible drilling in the region.

According to Rigzone, when asked for comment on the plan, China's Foreign Ministry spokeswoman Jiang Yu said, "China holds indisputable sovereignty over the Nansha Islands [Spratly Islands] and the adjacent sea waters."

"Any activities by countries or companies to explore for oil or gas in the sea waters in China's jurisdiction without the permission of the Chinese government will constitute a violation of China's sovereignty and...will be illegal and invalid."

She did not, however, make specific reference to the Philippines or Forum Energy, nor did she say the survey area was actually in waters claimed by China.

Forum Energy holds what it calls the Reed Bank concession, which is located west of the Philippines' Palawan Island in the South China Sea.

China claims most of the South China Sea, as far as south as Indonesian waters, 1,200 km south of Hainan island. This is based on what it sees as its historical claim to the hundreds of small islands that make up the Spratly and Paracel Islands. The Spratly Islands are called the Nansha Islands by China.

Brunei, Malaysia, Taiwan, Vietnam and the Philippines all contest China's claim, and assert ownership of part or all of the disputed territory.

The Reed Bank, the territory currently being focused on, lies about 150 km east of the Spratlys, and lies well within the Philippines' Exclusive Economic Zone of 200 nautical miles, according to the Vancouver Sun.

The Philippines announcement comes at a time of already heightened tension. The Vancouver Sun reported that on 2nd March, two Chinese warships 'harassed' a ship doing survey work around the Reed Bank for the Philippines. The Philippine military sent an aircraft to the region to protect the oil explorers from the Department of Energy.

The chief of the Armed Forces' Western Mindanao Command, Lt. Gen. Juancho Sabban said that the Chinese were claiming that the oil explorers were in Chinese territory. He told GMA News that when the aircraft arrived, the Chinese patrollers were no longer there and there was no confrontation.

The Philippines' President Benigno Aquino sent a formal letter of protest to the Chinese government as a result, however, the letter was dismissed by Beijing. Vietnam also protested to Beijing about its naval activity in the disputed waters.

In March 2010, the New York Times reported that two senior US officials had been told in a meeting with Chinese counterparts that Beijing's claim to the South China Sea was a part of its 'core interest'.

Beijing's assertive position has prompted great concern, not only for the litteral states who are interested in the oil-rich Spratlys, but also for the US. Nearly half of the world's maritime fleet by tonnage passes through the South China Sea every year, and the US relies on being granted free passage through the waters.

The Reed Bank Basin alone is thought to contain some 440 million bbl oil equivalent. The wider Spratly Island group is thought to be hydrocarbon rich as the surrounding waters have proven reserves, although very little has been confirmed within the Spratlys themselves.

Sources: Rigzone, Vancouver Sun, GMA News, Global Nation- Inquirer

For more information, please see the Menas Borders' website, here.

China dedicated to good relations with India, despite military budget rise: spokesman

NCP spokesman Li Zhaoxing

The Chinese government is dedicated to maintaining good relations with India, despite increasing its defence budget by over 12 per cent, a top official from the Chinese parliament said on Friday 4th March.

The comments came a day before the start of the National People's Congress's (NPC) annual session, which seems likely to approve a 12.7 per cent increase in the country's defence budget, a move which has caused concern among some of China's neighbours.

Responding to questions about whether China's defence budget increase would put pressure on its neighbours, such as India, Li Zhaoxing, chairman of the NPC's Foreign Affairs Committee said that China and India have reached a consensus on maintaining the peace and tranquillity of their border areas until the border issues are solved.

Mr Li added that the increase will result in a military budget of 601 billion yuan (US$91.5 billion), which only amounts to 1.4 per cent of GDP. India's defence budget is also set to rise considerably this year, up 11.6 per cent to US$35 billion. As Mr Li pointed out, the Indian budget is higher as a proportion of GDP than China's. The US has a military budget of $725 billion.

Mr Li also said that China wanted to move forward with talks with India. “We seek to advance the negotiations … process on a settlement framework, so as to resolve the boundary question which has been created and left over by history,”

“At present, there are friendly and stable relations between China and India. This has created a good atmosphere for the two sides to resolve the boundary question through consultations,” he said.

Li said China and India had held 14 rounds of meetings since 2003 in an effort to speed up negotiations for an early solution to border issues.

"China attaches great importance to friendly relations with neighbors. ... Seeking peace, cooperation and development is a shared view of all Asian people, including the people of China and India," he said.

The Chinese government said on Friday that it was ready to take forward the negotiations with India over the long-running border dispute, and that the two countries' relationship was now stable enough for a settlement to be reached.

Many analysts believe that the declared budget is only a small proportion of what China actually spends on its military power. Many believe that the increase is a sign of China's desire to put pressure on its military competitors, both regionally and globally.

India is not the only regional power that China has territorial issues with. According to India's Economic Times, on Thursday 3rd March, Japan scrambled military jets after Chinese naval airplanes flew near disputed islands in the East China Sea, although the Chinese did not enter Japan's airspace.

The disputed islands, known in China as the Diaoyu islands and in Japan as the Senakaku islands, have long been disputed by the two sides. The capture of a Chinese boat captain in disputed waters by Japanese patrols in September 2010 drove relations to the lowest levels in years.

The South China Sea dispute has also heated up, with the Philippines demanding an explanation from China over a recent incident in which it says two Chinese patrol boats threatened to ram a survey ship.

China has taken steps to resolve many of its residual border issues. It appears that maritime disputes and issues with India will, however, be harder to solve.

Sources: Economic Times, Xinhua, Times of India, The Hindu

For more information, please see the Menas Borders website, here.