Why Vietnam is the big winner in the South China Sea ruling.

On 12 July 2016, the Permanent Court of Arbitration (PCA) issued a definitive ruling on China’s sweeping claims in the South China Sea.

The Philippines filed their arbitration suit in January 2003. China refused to participate in the hearings, arguing that the PCA and the UN Convention on the Law of the Sea do not have the legal authority to rule on sovereignty issues. The Philippines wrote their submission in a way that sovereignty was never the issue at hand, instead focusing on the issues of entitlements of certain features, historical rights, environmental degradation and the meaning of the nine-dash line.

The PCA took China’s consideration into account, and in December 2015, ruled that it had standing to rule on 15 specific points. Their ruling was the strongest affirmation of the rule of law and creates an important legal precedent. The decision is a landmark ruling and a devastating blow to China.

Few legal scholars or international relations specialists were expecting the Court to rule unanimously in the Philippines favor on 14 of 15 counts. Most importantly, the PCA ruled that the nine-dash line has no basis in international law and that the historical rights claimed by China were “extinguished” by the ratification of UNCLOS. The Court ruled that no feature in the Spratly Island is a habitable feature in its natural state, and therefore, no feature is entitled to a 200 nautical mile exclusive economic zone (EEZ).

In short, the PCA ruled that China has no exclusive right to resources in the East Vietnam Sea when it claimed almost 90 per cent of them.

No other country stands to gain more from the ruling than Vietnam. “Vietnam welcomes the arbitration court issuing its final ruling,” the Ministry of Foreign Affairs said in a terse statement.

“Vietnam strongly supports the resolution of the disputes in the South China Sea by peaceful means, including diplomatic and legal processes and refraining from the use or threats to use force, in accordance with international law.”

First, the legal invalidation of the nine-dash line is crucial. China’s nine-dash line clearly violated Vietnam’s EEZ and continental shelf rights, garnered from its coastline. China has no legal rights to fish or drill for hydrocarbons. The PCA ruling was unequivocal: China has violated the Philippines’ EEZ and continental shelf rights.

The same holds true for Vietnam. However, while this may make international oil firms think twice about bidding on Chinese exploration blocks on Vietnam’s continental shelf, China will continue to enforce sovereignty via its maritime militia.

Second, the PCA’s invalidation of China’s historical rights is critical. As the court ruled that the Philippines, too, enjoyed historical rights in those waters, it should follow that Vietnam shares the same rights; that is, historical rights are not mutually exclusive.

Third, the sweeping and thorough nature of the ruling means that Vietnam does not have to file an arbitration suit over the Spratly’s. Hanoi has been able to free ride on the courageous leadership of the Philippines. This is critical.

In 2014, at the height of the furore over the HYSY-981 oil rig placed clearly on Vietnam’s continental shelf, then Prime Minister Nguyen Tan Dung made clear that it was a matter of when, not if, it would join the Philippines and also file a suit with the PCA. But following China’s dispatch of State Counselor Yang Jiechi to Hanoi, in June 2014, that position was dropped.

Hanoi did file a brief with the PCA, but only to request the tribunal to take Vietnam’s legal position into consideration. While Beijing was not pleased with Hanoi, it was far short of a separate arbitration. But now Hanoi needs not test those diplomatic waters.

That said, Vietnam could use the PCA findings to lodge a suit against China regarding the Paracels, asking for clarification regarding features, whether they be rocks, reefs of low tide elevations. Likewise, it could use the PCA ruling to challenge China’s drawing of straight baselines around the Paracels. I doubt, however, that Hanoi would be emboldened to go down that path.

The ruling does has several downsides for Vietnam. First, Vietnam, too, has no claim to an EEZ from any of its held features. At best, it will enjoy a 12 nautical mile (NM) Territorial Sea from a few, such as Spratly Island.

Second, the PCA ruled that “China has inflicted irreparable harm to the marine environment,” through its construction of seven islands and reclamation of others. Vietnam has also engaged in land reclamation, albeit to a much smaller degree, around two per cent of China’s. And the court was highly critical of China’s construction of islands while the court was deliberating, stating that such reclamation was “incompatible with the obligations on a state during dispute resolution proceedings.” Hanoi should take note as it too is constantly upgrading its features. And it should also take note that the PCA ruling was unequivocal: artificial islands give no EEZ, and if they are constructed on low tide elevations, not even 12NM territorial seas.

Third, China may decide to draw straight baselines around its features in the Spratly Islands, just as it has done in the Paracels. The PCA has tried to preempt them from doing so, clearly stating “UNCLOS doesn’t provide for groups of islands to generate maritime zones collectively.” But that is what China will likely do, and those baselines will include Vietnamese held features.

China has said that the PCA’s ruling is “null and void,” that they inexplicably “violate international law,” and thus that it will not be bound by them. The Ministry of Foreign Affairs made this clear in a 12 July statement: “China’s territorial sovereignty and maritime rights and interests in the South China Sea shall under no circumstances be affected by those awards. China opposes and will never accept any claim or action based on those awards.” UNCLOS articles 288(4) and 296 (1) are clear in this.

So how is China likely to respond to the ruling?

At one extreme, it could increase the militarisation of the islands that it has built. It could deploy anti-aircraft missile batteries already based at the Paracels, as well as more fighter aircraft ahead of declaring an air defense identification zone (ADIZ). It certainly is not going to stop military operations and exercises in the South China Sea.

Short of that, it could lash out on a bilateral basis, meaning China could retaliate against the Philippines by beginning land reclamation at Scarborough Shoal, or at least continue to deny access there to Filipino fishermen. China could, likewise, deny Vietnam access to their features.

China will continue to enforce its claim of sovereignty, not through its navy or even its coast guard, but through its maritime militia; an armed and deputised fishing fleet that remains within the command and control of the security forces. The day before the PCA ruling, two Chinese vessels rammed and sunk a Vietnamese fishing boat. While Beijing has lost the legal fight, no country is pushing back regarding China’s unilateral enforcement of sovereignty through its fishermen.

China may weigh the costs of being overly aggressive. Despite its claims of substantial international support, only 10 countries openly support China’s legal position, and most of them are landlocked, poor, corrupt and dependent on Chinese aid. It wants to be a superpower, but without carrying any of the costs, such as leading by example, taking hits in international courts, or providing collective goods.

The Chinese leadership has painted themselves into a corner, by fanning the flames of nationalism in their state controlled media. The Chinese Communist Party has tried to harness nationalism, but more importantly tried to assert China’s “rights” lost in the two centuries of humiliation to the West and Japan, to legitimise the regime.

China is most likely to act closer to home, and continue to use its influence over Cambodia, Laos, Brunei, and even Myanmar, to prevent a unified response from ASEAN, which meets in a few weeks’ time.

It has not helped that following the PCA ruling there was deafening silence out of Jakarta, and even worse, the conflicting signals that we have seen from the TNI, Ministries of Foreign Affairs, Fisheries, and the President’s office. Without Indonesian leadership, there can be no effective ASEAN response.

So there are three things that Hanoi must do. First, Vietnam must use all the leverage at their disposal, especially over Laos and Cambodia. But it has recently dawned on Hanoi how little of their historical influence they still maintain. Vietnam would be wise to remind Hun Sen how much Cambodia relies on international courts and other countries accepting their ruling regarding its claim to Preach Vihear. ASEAN centrality, seemingly jettisoned at Kunming, must be restored. And then, the group must use the ruling as a new impetus to push for a binding Code of Conduct with China.

Second, Vietnam will have to use their coast guard to counter Chinese fishermen and maritime militia. The rule of law is on Vietnam’s side, but it must be enforced. As long as China can unilaterally deny others access to the South China Sea, it has de facto sovereignty.

Third, it must work with other states to give China a face-saving way out. Until Beijing realises that it’s in its interest to accept the ruling, it will not abide by it. The downside of the ruling is that it is so unequivocal that it doesn’t give China any face-saving way out.

There’s one last thing Hanoi should note: independent courts can produce some wonderful outcomes if free from political interference. It may consider that at home, where its commitment to the rule of law seems a lot less convincing than it did today in support of the PCA ruling.

Dr Zachary Abuza is a Professor at the National War College, in Washington, DC, where he focuses on Southeast Asian politics and security issues, including governance, insurgencies, democratisation and human rights, and maritime security.