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The Arbitral Award: Not just a piece of paper
By Former Supreme Court Senior Associate Justice ANTONIO T. CARPIO
July 17, 2022
Rappler.com
For Filipino officials to parrot that the Arbitral Award is just a piece of paper is to accept that the Arbitral Award is null and void, a position that is contrary to Philippine national interest
Editor’s Note: Remarks delivered by retired justice Antonio T. Carpio on July 16, 2022 at the webinar, “Six Years after the Arbitral Award: Developments in the South China Sea,” sponsored by the National Youth Movement for the West Philippine Sea.
When the Arbitral Tribunal at the Hague handed down its Award on July 12, 2016, China belittled the Arbitral Award as “just a piece of paper.” Most of the rest of the world, however, hailed the Arbitral Award as a landmark ruling affirming the rules-based international order governing the South China Sea.
Unfortunately, some Philippine government officials, past and present, have parroted the Chinese propaganda that the Arbitral Award is just a piece of paper. These Philippine government officials act against Philippine national interest, giving aid and comfort to China that is clearly intent on seizing vast areas of Philippine maritime zones in the West Philippine Sea. Calling the Arbitral Award as just a piece of paper is dangerously naïve.
First, prior to the Arbitral Award, there was a legal question as to which country owned the natural resources, including the oil and gas, in the West Philippine Sea enclosed by China’s nine-dash line. Both China and the Philippines claimed ownership of these resources.
Many foreign service contractors wanted legal clarity before spending millions of dollars exploring for oil and gas in the West Philippine Sea. The Arbitral Award provides for that final and definitive legal clarity. Now, a service contractor knows that if it extracts oil and gas for China in the West Philippine Sea, the Philippines can sue the service contractor in third countries where it has assets for stealing the oil and gas belonging to the Philippines.
Second, the US, UK, France, Japan, Australia, Canada, and other countries have been exercising freedom of navigation, including naval drills, in the South China Sea, invoking the Arbitral Award which affirmed the application of UNCLOS in the South China Sea unimpaired by China’s nine-dash line. Every time the navies of these countries conduct naval drills in the West Philippine Sea, they affirm that there is an EEZ in the West Philippine Sea unimpaired by China’s nine-dash line. Of course, the only coastal state that can claim an EEZ in the West Philippine Sea is the Philippines. These freedom of navigation operations of the naval powers are, in fact, the most tangible and the most robust enforcement of the Arbitral Award so far.
Third, ASEAN coastal states, as well as a growing number of coastal states worldwide, have in one form or another invoked the Arbitral Award. Indonesia invoked the Arbitral Award when it adopted the name North Natuna Sea to designate its maritime zone facing the South China Sea off the coast of the Natuna Islands. In various international fora, the Arbitral Award is routinely invoked to debunk China’s nine-dash line.
Indeed, the Arbitral Award is the most definitive and the most authoritative document declaring that China’s nine-dash line has no basis in fact and in law. Due to the Arbitral Award, China’s nine-dash line has been ridiculed by legal scholars all over the world as a gigantic fraud on the international community.
Fourth, China calls the Arbitral Award just a piece of paper because China considers the arbitral proceedings null and void since China did not participate in the arbitration. Thus, for Filipino officials to parrot that the Arbitral Award is just a piece of paper is to accept that the Arbitral Award is null and void, a position that is contrary to Philippine national interest. This position of China has been thoroughly debunked as erroneous by the Arbitral Tribunal.
Article 9, Annex VII of UNCLOS on Compulsory Arbitration provides: “If one of the parties to the dispute does not appear before the arbitral tribunal or fails to defend its case, the other party may request the tribunal to continue the proceedings and to make its award. Absence of a party or failure of a party to defend its case shall not constitute a bar to the proceedings.” When China ratified UNCLOS, China bound itself to this provision.
Clearly, the refusal of China to participate in the arbitral proceedings did not divest the Arbitral Tribunal of jurisdiction to hear and decide the case. To repeat, it is against Philippine national interest for Filipino officials to parrot China’s propaganda that the Arbitral Award is just a piece of paper. After all, the Arbitral Award affirms what is stated in our Constitution: “The State shall protect the nation’s marine wealth in its xxx exclusive economic zone and reserve its use and enjoyment exclusively to Filipino citizens.”
Fifth, to assert or enforce the Arbitral Award, the Philippines does not need the consent or permission of China. The Arbitral Award, by itself, affirms that under UNCLOS the Philippines can exclusively exploit the natural resources, including the oil and gas, in the Philippine exclusive economic zone in the West Philippine Sea without interference from any other coastal state. To repeat, the Philippines does not need China’s consent or permission to assert or enforce the Arbitral Award. For Filipino officials to say that the Philippines cannot exploit the oil and gas in its exclusive economic zone in the West Philippine Sea unless China recognizes the Arbitral Award is to baselessly grant China a veto power over the exploitation of the Philippine exclusive economic zone in the West Philippine Sea. No country in the world exercises such veto power.
Of course, we know China will never recognize the Arbitral Award – thus waiting for recognition from China is like waiting for Godot. Again, to assert or enforce the Arbitral Award, the Philippines does not need to wait for China to recognize the Arbitral Award.
Last May 2020, Malaysia sent its Petronas-commissioned survey ship West Capella to explore in its exclusive economic zone off the coast of Borneo in an area falling within China’s nine-dash line. China warned Malaysia not to proceed with the exploration. Chinese Coast Guard vessels shadowed the Malaysian survey ship West Capella. Malaysian Coast Guard and Navy vessels, however, accompanied the West Capella and protected it until it completed its exploration work. Interestingly, three US warships and an Australian frigate conducted naval drills near the area to lend moral support to the Malaysians. Thus, Malaysia, even without an Arbitral Award and without a Mutual Defense Treaty with a nuclear-armed power, asserted successfully its sovereign rights in its EEZ despite threats and bullying from China.
Last October-November 2021, Malaysia sent its drilling ship to the same area off the coast of Borneo. China warned Malaysia not to proceed with the drilling. Chinese Coast guard vessels harassed the Malaysian drilling ship almost every day. But with the Malaysian Coast Guard and Navy ships protecting its drilling ship, the drilling was completed. China, despite its threats of war and harassment, again failed to stop Malaysia from asserting its sovereign rights in Malaysian EEZ.
In mid-2021, Indonesia sent its drilling ship to drill test wells in its EEZ off the coast of the Natuna Islands facing the South China Sea, within the area encompassed by China’s nine-dash line. China told Indonesia to stop the drilling, and a four-month stand-off ensued between Indonesian Coast guard and Navy ships and Chinese Coast guard vessels. The Indonesians, declaring that they were drilling in an area where they have sovereign rights, proceeded with, and completed their drilling. China failed to stop the Indonesians. Interestingly, the US also sent its aircraft carrier Ronald Reagan near the drilling site to lend moral support to the Indonesians.
Thus, two coastal states, Malaysia and Indonesia, whose EEZs are encroached by China’s nine-dash line, asserted their sovereign rights in their EEZs despite threats of war from China and harassment from Chinese Coast guard vessels. Malaysia and Indonesia successfully asserted their sovereign rights even without an Arbitral Award or a Mutual Defense Treaty with a nuclear-armed state.
In contrast, in April 2022, when China “whispered” to former president Duterte not to cross China’s redline, Duterte slavishly ordered Forum Energy, the Service Contractor in Reed Bank, not to send its survey ship to Reed Bank, which the Arbitral Tribunal had ruled is within Philippine EEZ. Malampaya, which supplies 40% of the energy requirement of Luzon, will run out of gas in 3-5 years. The only possible replacement is Reed Bank. Without Reed Bank, the Philippines will have to import LNG – Liquified Natural Gas – to feed its gas-fired power plants in Luzon. This will send our energy costs, already the highest in Asia, soaring through the roof, burdening the consuming public and driving away potential investors.
Obviously, if we want to keep our energy costs within reasonable levels, and if we want to unburden our people from exorbitant energy costs, we must follow the example of Malaysia and Indonesia in asserting our sovereign rights in our EEZ. This requires political will, which the Duterte administration was in severe deficit of, when dealing with China.
Hopefully, the new Marcos administration will find the courage to exercise the much-needed political will, otherwise Filipinos will be condemned to suffer even higher energy costs than what they are already experiencing today.
Editor’s Note: Remarks delivered by retired justice Antonio T. Carpio on July 16, 2022 at the webinar, “Six Years after the Arbitral Award: Developments in the South China Sea,” sponsored by the National Youth Movement for the West Philippine Sea.
When the Arbitral Tribunal at the Hague handed down its Award on July 12, 2016, China belittled the Arbitral Award as “just a piece of paper.” Most of the rest of the world, however, hailed the Arbitral Award as a landmark ruling affirming the rules-based international order governing the South China Sea.
Unfortunately, some Philippine government officials, past and present, have parroted the Chinese propaganda that the Arbitral Award is just a piece of paper. These Philippine government officials act against Philippine national interest, giving aid and comfort to China that is clearly intent on seizing vast areas of Philippine maritime zones in the West Philippine Sea. Calling the Arbitral Award as just a piece of paper is dangerously naïve.
First, prior to the Arbitral Award, there was a legal question as to which country owned the natural resources, including the oil and gas, in the West Philippine Sea enclosed by China’s nine-dash line. Both China and the Philippines claimed ownership of these resources.
Many foreign service contractors wanted legal clarity before spending millions of dollars exploring for oil and gas in the West Philippine Sea. The Arbitral Award provides for that final and definitive legal clarity. Now, a service contractor knows that if it extracts oil and gas for China in the West Philippine Sea, the Philippines can sue the service contractor in third countries where it has assets for stealing the oil and gas belonging to the Philippines.
Second, the US, UK, France, Japan, Australia, Canada, and other countries have been exercising freedom of navigation, including naval drills, in the South China Sea, invoking the Arbitral Award which affirmed the application of UNCLOS in the South China Sea unimpaired by China’s nine-dash line. Every time the navies of these countries conduct naval drills in the West Philippine Sea, they affirm that there is an EEZ in the West Philippine Sea unimpaired by China’s nine-dash line. Of course, the only coastal state that can claim an EEZ in the West Philippine Sea is the Philippines. These freedom of navigation operations of the naval powers are, in fact, the most tangible and the most robust enforcement of the Arbitral Award so far.
Third, ASEAN coastal states, as well as a growing number of coastal states worldwide, have in one form or another invoked the Arbitral Award. Indonesia invoked the Arbitral Award when it adopted the name North Natuna Sea to designate its maritime zone facing the South China Sea off the coast of the Natuna Islands. In various international fora, the Arbitral Award is routinely invoked to debunk China’s nine-dash line.
Indeed, the Arbitral Award is the most definitive and the most authoritative document declaring that China’s nine-dash line has no basis in fact and in law. Due to the Arbitral Award, China’s nine-dash line has been ridiculed by legal scholars all over the world as a gigantic fraud on the international community.
Fourth, China calls the Arbitral Award just a piece of paper because China considers the arbitral proceedings null and void since China did not participate in the arbitration. Thus, for Filipino officials to parrot that the Arbitral Award is just a piece of paper is to accept that the Arbitral Award is null and void, a position that is contrary to Philippine national interest. This position of China has been thoroughly debunked as erroneous by the Arbitral Tribunal.
Article 9, Annex VII of UNCLOS on Compulsory Arbitration provides: “If one of the parties to the dispute does not appear before the arbitral tribunal or fails to defend its case, the other party may request the tribunal to continue the proceedings and to make its award. Absence of a party or failure of a party to defend its case shall not constitute a bar to the proceedings.” When China ratified UNCLOS, China bound itself to this provision.
Clearly, the refusal of China to participate in the arbitral proceedings did not divest the Arbitral Tribunal of jurisdiction to hear and decide the case. To repeat, it is against Philippine national interest for Filipino officials to parrot China’s propaganda that the Arbitral Award is just a piece of paper. After all, the Arbitral Award affirms what is stated in our Constitution: “The State shall protect the nation’s marine wealth in its xxx exclusive economic zone and reserve its use and enjoyment exclusively to Filipino citizens.”
Fifth, to assert or enforce the Arbitral Award, the Philippines does not need the consent or permission of China. The Arbitral Award, by itself, affirms that under UNCLOS the Philippines can exclusively exploit the natural resources, including the oil and gas, in the Philippine exclusive economic zone in the West Philippine Sea without interference from any other coastal state. To repeat, the Philippines does not need China’s consent or permission to assert or enforce the Arbitral Award. For Filipino officials to say that the Philippines cannot exploit the oil and gas in its exclusive economic zone in the West Philippine Sea unless China recognizes the Arbitral Award is to baselessly grant China a veto power over the exploitation of the Philippine exclusive economic zone in the West Philippine Sea. No country in the world exercises such veto power.
Of course, we know China will never recognize the Arbitral Award – thus waiting for recognition from China is like waiting for Godot. Again, to assert or enforce the Arbitral Award, the Philippines does not need to wait for China to recognize the Arbitral Award.
Last May 2020, Malaysia sent its Petronas-commissioned survey ship West Capella to explore in its exclusive economic zone off the coast of Borneo in an area falling within China’s nine-dash line. China warned Malaysia not to proceed with the exploration. Chinese Coast Guard vessels shadowed the Malaysian survey ship West Capella. Malaysian Coast Guard and Navy vessels, however, accompanied the West Capella and protected it until it completed its exploration work. Interestingly, three US warships and an Australian frigate conducted naval drills near the area to lend moral support to the Malaysians. Thus, Malaysia, even without an Arbitral Award and without a Mutual Defense Treaty with a nuclear-armed power, asserted successfully its sovereign rights in its EEZ despite threats and bullying from China.
Last October-November 2021, Malaysia sent its drilling ship to the same area off the coast of Borneo. China warned Malaysia not to proceed with the drilling. Chinese Coast guard vessels harassed the Malaysian drilling ship almost every day. But with the Malaysian Coast Guard and Navy ships protecting its drilling ship, the drilling was completed. China, despite its threats of war and harassment, again failed to stop Malaysia from asserting its sovereign rights in Malaysian EEZ.
In mid-2021, Indonesia sent its drilling ship to drill test wells in its EEZ off the coast of the Natuna Islands facing the South China Sea, within the area encompassed by China’s nine-dash line. China told Indonesia to stop the drilling, and a four-month stand-off ensued between Indonesian Coast guard and Navy ships and Chinese Coast guard vessels. The Indonesians, declaring that they were drilling in an area where they have sovereign rights, proceeded with, and completed their drilling. China failed to stop the Indonesians. Interestingly, the US also sent its aircraft carrier Ronald Reagan near the drilling site to lend moral support to the Indonesians.
Thus, two coastal states, Malaysia and Indonesia, whose EEZs are encroached by China’s nine-dash line, asserted their sovereign rights in their EEZs despite threats of war from China and harassment from Chinese Coast guard vessels. Malaysia and Indonesia successfully asserted their sovereign rights even without an Arbitral Award or a Mutual Defense Treaty with a nuclear-armed state.
In contrast, in April 2022, when China “whispered” to former president Duterte not to cross China’s redline, Duterte slavishly ordered Forum Energy, the Service Contractor in Reed Bank, not to send its survey ship to Reed Bank, which the Arbitral Tribunal had ruled is within Philippine EEZ. Malampaya, which supplies 40% of the energy requirement of Luzon, will run out of gas in 3-5 years. The only possible replacement is Reed Bank. Without Reed Bank, the Philippines will have to import LNG – Liquified Natural Gas – to feed its gas-fired power plants in Luzon. This will send our energy costs, already the highest in Asia, soaring through the roof, burdening the consuming public and driving away potential investors.
Obviously, if we want to keep our energy costs within reasonable levels, and if we want to unburden our people from exorbitant energy costs, we must follow the example of Malaysia and Indonesia in asserting our sovereign rights in our EEZ. This requires political will, which the Duterte administration was in severe deficit of, when dealing with China.
Hopefully, the new Marcos administration will find the courage to exercise the much-needed political will, otherwise Filipinos will be condemned to suffer even higher energy costs than what they are already experiencing today.
– Rappler.com.
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