Game-Changer in the Vietnam-China Dispute
By going to the UN, China could radically alter maritime disputes in Asia
26 June 2014
By: Khan Vu Duc

In what can only be considered a puzzling move, Beijing has elected to bring its oil rig dispute with Vietnam to the United Nations, despite its refusal in the past to internationalize similar disputes with other countries in the South China Sea. China’s decision to resolve the dispute through lawful and legal means represents a positive step forward.

The oil rig, HD-981, operated by the state-owned China National Offshore Oil Corporation, was moved to its present position, about 120 nautical miles east of Vietnam’s Ly Son Island and 17 nautical miles south of Triton Island in the Paracels, in early May. Vietnam claims the rig is well within its 200-mile exclusive economic zone, whereas China claims ownership over the Paracels and argues for its own EEZ of 200 nautical miles from the islands.

By internationalizing the dispute, Beijing has challenged the UN to resolve the status of the Paracel Islands ‑ whether the islands are indeed islands and eligible for all the benefits such a status entails, as well as whether the islands belong to China. However, this is not without risk, particularly in the event that the UN rules against China.

Status of the Paracel Islands

The Paracel Islands are a collection of small islands and reefs located in the South China Sea between Vietnam and China. The Paracels were seized from what was then South Vietnam in 1974 by China, a supporter of the former North Vietnam against the United States during the Vietnam War. Following the unification of Vietnam, China maintained possession of the islands, which have since remained in dispute.

Due to the disputed nature of the Paracels, their status as actual islands (as defined under article 121 of the United Nations Convention on the Law of the Sea) has yet to be determined. Thus, in bringing the Paracels before the UN, China seeks to legitimize its claim and grant the islets and reefs official status as islands.

If China’s claim is to be recognized, the Paracels must satisfy the requirements for islands. If the Paracels are granted island status, they then benefit from a 200-mile EEZ. Given the proximity of the oil rig to Vietnam, the delimitation of a new EEZ between the two countries would be adjusted accordingly, which would ultimately be less than 200 nautical miles but more than enough for the oil rig to sit within Chinese waters.

If the Paracels are not defined as islands, they would still have a baseline of 12 nautical miles. Under that baseline, the oil rig, located 17 nautical miles south of the nearest Paracel Island, remains within Vietnamese waters.

China’s decision to internationalize the dispute is a reversal of its longstanding position to resolve disputes bilaterally. Consider China’s ongoing headache with the Philippines over the Scarborough Shoal that began in 2012. When Manila turned to the International Tribunal for the Law of the Sea (ITLOS) for arbitration, China angrily rejected the proceedings. China’s refusal, however, will not prevent ITLOS from acting, as set forth under Article 9 of Annex VII of UNCLOS.

By bringing its dispute with Vietnam to the UN, Beijing may be hoping that a decisive victory will deter its neighbors from internationalizing current and future disputes with China.

Consequently, for Beijing, the only acceptable outcome is for the UN to validate China’s claim over the Paracels and acknowledge the islands as true islands. A half-victory in which China wins the Paracels but loses out on its claim for island status will not be enough.

Opting out and opting in

To settle disputes concerning UNCLOS, under article 287, States may consider the International Tribunal for the Law of the Sea, the International Court of Justice, an arbitral tribunal constituted in accordance with Annex VII and a special arbitral tribunal constituted in accordance with Annex VIII.

Yet, in 2006, China exercised its right under article 298, paragraph 1, to opt out of Section 2 (titled: Compulsory Procedures Entailing Binding Decisions) of Part XV of UNCLOS, which includes Article 287 and those mechanisms to resolve disputes. However, just as one can opt out, there are exceptions to exceptions.

Article 298, Paragraph 3, is of particular relevance; it says that “a State Party which has made a declaration under paragraph 1 shall not be entitled to submit any dispute falling within the excepted category of disputes to any procedure in this Convention as against another State Party, without the consent of that party.”

In other words, Vietnam has to agree to the Chinese move, which it will undoubtedly do. The question then becomes “who” will hear the matter under article 287. Given China’s refusal to entertain ITLOS in the case of the Philippines, China may instead consider the ICJ for a court ruling.

Alternatively, Beijing may ask the UN General Assembly and/or Security Council to request an advisory opinion from the ICJ. Although advisory opinions do not have a binding effect, any opinion in favor of China would only bolster its position in the South China Sea.

Major impact

The significance of China’s decision to internationalize the oil rig dispute with Vietnam cannot be underestimated, although the outcome remains to be seen. Regardless of which arena the case will be heard, Vietnam will jump at the opportunity to invalidate China’s claim over the Paracel Islands. It is a gamble China has elected to take, believing its position is sound.
If the UN rules in favor of China – if the Paracels are defined as proper islands and granted a 200-mile EEZ – the outcome would dramatically increase the urgency and volatility of similar territorial disputes in the South China Sea, such as the Spratly Islands dispute.

If the UN rules against China, whether by denying China’s claim over the Paracels and/or the Paracels’ definition as islands, the challenge for the UN is whether China will comply and what the UN will do if China does not.
Regardless of the outcome, the aftermath of this ruling is likely to permanently alter the manner in which the countries involved approach the maritime and territorial disputes in Asia-Pacific, for better or worse.

Khanh Vu Duc is a lawyer and part-time law professor at the University of Ottawa. His research covers Vietnamese politics, international relations and international law.

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