Thayer Consultancy

ABN # 65 648 097 123

Background Briefing: Chinas Legal Warfare and the Code of Conduct Carlyle A. Thayer July 18, 2013

[client name deleted] Q1. Vietnam has yet again condemned China for issuing ID cards and registration papers for its citizens who are living in the Sansha perfecture. Vietnam has also lodged a diplomatic note protesting China for chasing two Vietnamese fishing boats, damaging them. and beating up the fishermen on board. Are any of the Chinese activities unexpected? Answer: China has long incorporated "legal warfare" as part of its strategy to dominate and exert sovereignty over the South China Sea. Legal warfare encompasses a wide variety of actions including "routine administrative actions" such as issuing passports, ID cards and registration papers for its citizens. This is all part of the process of establishing Chinese sovereignty claims as a result of the creation of Sansha prefecture. This is nothing new. More of the same can be expected in the future. China has multiple agencies with responsibility over maritime affairs including the South China Sea. Central state and party authorities are attempting to strengthen national control over these agencies. Despite this, many local officials continue to operate with impunity when dealing with Vietnamese and other foreign fishermen in waters claimed by China. The captains of Chinese vessels are rarely if ever punished for their actions. After all, China's standard operating procedure is to deny any report of mistreatment as a fabrication or assert that the incident in question was only Chinese vessels carrying out law enforcement measures in "Chinese waters." China's actions are both normal and regrettable. Q2. These incidents happened just after the Brunei summit where China indicated its goodwill to start negotiations on the Code of Conduct and in the context of the UN Arbitral Tribunal already convening and approving a draft set of rules for the proceedings. What do you make of it? Answer: The two sets of issues are not directly related. The incidents that have taken place recently are not yet covered by a binding Code of Conduct. China will commence discussions on a COC in September. This will be a protracted process. China will resist any effort to restrain it from so-called "normal law enforcement or sovereignty enforcement" measures in areas claimed by China.

2 The UN Arbitral Tribunal is a bilateral matter between China and the Philippines. China has responded with a war of words and propaganda offensive against the Philippines while at the same time entrenching itself on Mischief Reef and Scarborough Shoal. China will continue to bring pressure to bear on the Philippines with two objectives in mind. The first objective is to pressure the Philippines into withdrawing its claim to the Arbitral Tribunal. The second objective is to intimidate other Southeast Asian states from supporting the Philippines. Q3. So what did you make of the use of force by China against the Vietnamese fishermen? Did it run counter international laws and treaties to which China is a signatory? Answer: It would appear from the accounts by the fishermen that Chinese state vessels were involved. In this case they acted in breach of international law like pirates. The Chinese government has a responsibility to investigate this matter and punish those guilty. I doubt this will happen.

Suggested citation: Carlyle A. Thayer, Chinas Legal Warfare and the Code of Conduct, Thayer Consultancy Background Brief, July 18, 2013. All background briefs are posted on Scribd.com (search for Thayer). To remove yourself from the mailing list type UNSUBSCRIBE in the Subject heading and hit the Reply key. Thayer Consultancy provides political analysis of current regional security issues and other research support to selected clients. Thayer Consultancy was officially registered as a small business in Australia in 2002.

Thayer Consultancy
ABN # 65 648 097 123

Background Briefing: Chinas New 10-Dash Line Claim to the South China Sea Carlyle A. Thayer July 18, 2013

[client name deleted] We request your assessment of the following issues: Q1. We have been told by Philippine diplomats that Chinas 9-dash line claim over virtually the entire South China Sea (SCS) has evolved and gotten even more aggressive with its new so-called 10-dash line claim with the publication of a new Chinese map laden with more details. What differences have you spotted between the 9-dash claim and now the 10-dash line claim of China and how do you read this move by China to amend its map and territorial claim? ANSWER: The significance of Chinas latest map of the South China Sea lies not in its ten-dash lines but the naming of numerous features in the South China Sea that had not been listed on previous maps [see appendix]. China appear to be laying the ground for claiming sovereignty of every feature, such as reefs, shoals as well as rocks, islets and islands. The original 1947 map published by the Republic of China had eleven dash lines. Two, located in the Gulf of Tonkin, were removed by the Peoples Republic of China in 1953. Approximately two years ago Chinese maps appeared containing ten dash line. The new line was east of Taiwan and was inserted to reinforce Chinas one China policy. Q2. How should rival Asian claimants react to this new Chinese territorial move? ANSWER: Asian claimants should issue official statements reiterating their claims to sovereignty over features in the South China Sea. They should also state unequivocally that naming a feature on a map so recently will not be taken as evidence of sovereignty by any international court or legal tribunal. Maps, in international law, are only pieces of information. The key to sovereignty is to demonstrate long-standing continuous occupation and administration over features in the South China Sea.

Suggested citation: Carlyle A. Thayer, Chinas New 10-Dash Line Claim to the South China Sea, Thayer Consultancy Background Brief, July 18, 2013. All background

2 briefs are posted on Scribd.com (search for Thayer). To remove yourself from the mailing list type UNSUBSCRIBE in the Subject heading and hit the Reply key. Thayer Consultancy provides political analysis of current regional security issues and other research support to selected clients. Thayer Consultancy was officially registered as a small business in Australia in 2002.

Thayer Consultancy
ABN # 65 648 097 123

Background Briefing: South China Sea: U.S. Oil Companies Sign Agreements Carlyle A. Thayer July 27, 2013

[client name deleted] We request your assessment of the following three issues: ANSWER: Q1. On 25 July, PetroVietnam and Exxonmobil 25 signed a framework agreement in the US to develop the Ca Voi Xanh gas field offshore central Vietnam in the South China Sea. China has in the past protested Vietnam-US cooperation in this area. Do you think China will again oppose it and at what level? ANSWER: The spokesperson for Chinas Foreign Ministry is likely to issue a pro forma objection to this agreement. It is unlikely China will take the matter further. In 2009 the Obama Administration came down heavily against Chinese pressures on American oil companies the previous year. The Vice President Joe Biden and the new Assistant Secretary of State Daniel Russell have both reiterated that unimpeded lawful commerce as a key U.S. concern and have opposed the use of intimidation, coercion and force or the threat of force in South China Sea matters. The framework agreement covers blocks 117, 118 and 119 off the east coast from Da Nang. This was a contentious matter last year when Chinas National Offshore Oil Company (CNOOC) put up blocks for bid that overlapped with these blocks. This matter appears to have simmered down. Q2. PetroVietnam Exploration and Production (PVEP) and US Murphy Oil also signed an oil and gas pact. Do you think it will be in disputed area in the South China Sea, too? ANSWER: The oil and gas agreement between PVEP and Murphy Oil covers blocks 144 and 145. These are located in the Phu Khanh Basin where ExxonMobile is presently operating. These blocks are also in an area claimed by China. China is unlikely to do more than issue a public protest at this stage and claim Chinese sovereignty over the area.

2 Q3. Vietnam and the United States have agreed to a Comprehensive Partnership between the two countries during the visit to Washington, D.C. by President Truong Tan Sang. Do you think the strengthened relationship between the two countries may lead to further cooperation between their oil and gas companies? ANSWER: The Comprehensive Partnership agreement calls for a step up in cooperation in nine major areas: political and diplomatic; trade and economic ties; science and technology; education; environment and health; war legacy issues; defense and security; human rights; and culture, tourism and sports. The Joint Statement issued by President Barack Obama and President Truong Tan Sang specifically mentions the MOU between PetroVietnam and the U.S. Export-Import Bank to support trade and investment in Vietnams petroleum and energy sectors. The agreement also takes note of the framework heads agreement between ExxonMobil and PetroVietnam and the cooperation agreement between Murphy Oil Company and PVEP. In addition, the Joint Statement reaffirmed the commitment of both leaders to conclude a comprehensive, high-standard Trans-Pacific Partnership agreement as soon as possible this year. Finally, President Obama promised his best to visit Vietnam before the end of his term. Taken together these developments create both a foundation and more secure environment for further cooperation between American and Vietnamese oil and gas companies.

Suggested citation: Carlyle A. Thayer, South China Sea: U.S. Oil Companies Sign Agreements, Thayer Consultancy Background Brief, July 27, 2013. All background briefs are posted on Scribd.com (search for Thayer). To remove yourself from the mailing list type UNSUBSCRIBE in the Subject heading and hit the Reply key. Thayer Consultancy provides political analysis of current regional security issues and other research support to selected clients. Thayer Consultancy was officially registered as a small business in Australia in 2002.