Summary

The Spratlys are a group of islands located in the South China Sea. Vietnam, Taiwan, Brunei, Malaysia, the Philippines, and China currently have overlapping territorial claims consisting of all or part of the islands. The Spratlys are strategically located near important international shipping lanes in the South China Sea. The islands also have rich fishing grounds and possibly oil and gas deposits, although the area has yet to be thoroughly explored. Many claimants to the Spartlys maintain a military presence in the area, raising concerns that the islands’ status could be a future source of armed conflict in the region.  Although a comprehensive, binding agreement has not been negotiated, the Association of Southeast Asian Nations (ASEAN) and China did sign a code of conduct in 2002 that encouraged all parties to exercise restraint.  Progress on resolving the issue has mainly focused on joint commercial initiatives to explore and develop the resources of the Spartlys.

Context

The geopolitical importance of the Spratly Islands arises from two factors.  First, the islands are located in the South China Sea, which is the world’s second busiest international shipping lane. A significant portion of East Asia’s rising energy demands is met by oil shipped from the Middle East through the Strait of Malacca to the South China Sea. Second, the islands and the water that surrounds them have important economic resources. Aside from a lucrative fishing industry, the area potentially has significant oil and gas deposits that have gone unexplored.  Thus, having sovereignty over the islands bolsters claims to the surrounding resources.

The United Nations Convention on Laws of the Sea (UNCLOS) grants coastal states the sovereign right to control the resources of an Exclusive Economic Zone (EEZ) extending up to 200 nautical miles off its coastline.  In areas where EEZs overlap, the UNCLOS calls for the establishment of joint resource management areas. However, the UNCLOS lacks clear guidelines for facilitating such cooperation. According to the UNCLOS, states have a sovereign right to the area over their continental shelves, which some of the claimants in the Spratlys dispute have used to justify their assertions. 

Background

France administered the Spartlys as part of French Indochina starting in the 1930s. Japan claimed jurisdiction over the Spartlys in 1939 and then forcibly seized the islands from France in 1941, using them for a submarine base during World War II. After the war, the Chinese nationalists established a garrison on Itu Aba that they maintained after they fled to Taiwan in 1949. Japan renounced all claims to the islands in 1951 when it signed the San Francisco Peace Treaty.  Taiwan, mainland China, and Vietnam all immediately declared ownership of the islands.  The Philippines claimed the territory in 1955.

In 1976, the Philippines moved forces onto seven islets and constructed an airstrip on Pagasa Island. In 1978, the Philippines and Vietnam agreed to negotiate their disagreement about the issue, but failed to reach a compromise. In 1988, the Chinese and Vietnamese navies fought for control over the Johnson Reef.  The Chinese navy managed to sink three Vietnamese ships, killing seventy-two Vietnamese. In the process, China captured six atolls.

Past Initiatives

Since 1991, Indonesia has taken a leading role in trying to negotiate a resolution to the dispute.  The Association of Southeast Asian Nations (ASEAN), in cooperation with China and Taiwan, has hosted a number of working groups on the subject. In 1999, ASEAN began drafting a regional code of conduct in an attempt to prevent conflict from erupting over the issue.  The Philippines hoped to unite ASEAN behind a common position to counter what it saw as Chinese expansionism in the Spartlys.  Vietnam raised concerns that the code did not include the Paracel Islands, which China had seized from Vietnam in 1976.  

In early 2002, the Philippines presented ASEAN foreign ministers with photographic evidence that China had been secretly expanding its military grip on the Spratlys since 1995.  China had allegedly built military instillations under the guise of constructing facilities for its fishermen.  ASEAN officials subsequently called on China to show restraint and observe international law.

Later in 2002, the member states of ASEAN and China signed the Declaration on the Conduct of Parties in the South China Sea.  The declaration urged all claimants to the Spratly Islands to exercise restraint and avoid any actions that could complicate or escalate territorial disputes in the area. Signatories pledged to maintain the region’s peace and security by handling their disagreements in a constructive manner.  Signatories also pledged not to inhabit previously uninhabited areas of the islands and to inform each other of their military activities in the region. Largely due to China’s insistence, the declaration was non-binding. ASEAN Secretary-General Rodolfo Severino cautioned that a final agreement on the issue would likely not be achieved in his lifetime.  Despite the agreement, China and Vietnam both released public statements reasserting their territorial claims in 2004.
 
 Current Initiative

Confidence-building measures aimed at resolving the dispute have generally focused on joint research and development projects. In 2003, China and the Philippines discussed joint petroleum exploration. Later that year, claimants to the islands issued a declaration to cooperate on developing the resources of the Spartlys. In March 2005, the national oil companies of China, the Philippines, and Vietnam signed an agreement to collectively monitor marine seismic activities in the Spratlys. Although some hailed the agreement as a major step toward cooperation, the president of the Philippine oil company cautioned that it was simply a commercial transaction with no reference to political or territorial rights.  He also asserted that there could be no joint development of the resources "without a legal framework and established maritime baselines.”

Foreign Policy Positions of Key Players

China

China claims all of the Spratlys, asserting that its historical ownership of the islands dates back to the Han Dynasty and that its fishermen have been active in the region for centuries. In February 1992, China’s National People’s Congress formally declared that the Spratlys were an integral part of Chinese territory. China has demonstrated its willingness to back its territorial claims with military force.  In 1988, it seized some islands from Vietnam and, in 1995, it seized the Mischief Reef, which the Philippines had previously controlled. No other country involved in the dispute has a military that matches China’s.  The Chinese economy’s growing energy needs certainly contribute to the perceived value of the Spratlys.  Considering the geostrategic dimensions of the dispute, having control over the Spratlys could expand China’s influence in the region.  Some analysts have noted that the islands could be used as a military staging ground for other regional actions.  Prior to its discussions with ASEAN in 2002, China had been reluctant to address the issue in multilateral forums.

Taiwan

Taiwan claims all of the Spratly Islands, citing the same historical basis for its claim that China invokes. In March 2004, eight individuals from Taiwan started constructing a “bird watching station” on a reef in the Spratlys.  Vietnam strongly condemned the move, labeling it "an act of land grabbing expansion that seriously violated Vietnam's territorial sovereignty" and warning against further Taiwanese “adventurism.”

Vietnam

Vietnam claims all of the Spratly Islands, which are based on both historical claims and the continental shelf principle. Vietnam argues that cartographic surveys, as far back as 1862, labeled the Spratlys as Vietnamese territory. In addition, Vietnam claims that it rightfully inherited the Spratlys, which were French possessions, when France relinquished its colonial control over Vietnam in 1954. Following the North Vietnamese victory in 1975, the communist government occupied the islands previously held South Vietnam. August 2002, Vietnamese troops based on an islet in the region fired warning shots at a Philippine plane flying overhead. Vietnam is building a 600-meter runway in the islands to facilitate tourism.

Philippines

The Philippines has claimed ownership over part of the Spratlys since 1955.  Its claim is largely based on its close proximity to the islands. In 1971, the Philippines formally claimed eight islands called the Kalayaan, which it argued were not part of the Spratlys and had not previously been claimed by any other state. The Philippines has looked to the U.S. for protection, claiming that its 1951 mutual defense pact which it claims commits the Americans to come to its defense should conflict arise with China over the islands. In 2004, the Philippines held joint military exercises with the U.S. in the South China Sea. Although the Philippines denied that the exercises had anything to do with the Spartly Islands, some speculated that the Philippines had grown uneasy with an increasing number of visits by Chinese research vessels and warships. 

Brunei

Brunei has established an exclusive fishing zone in part of the Spratly Islands, though it has not formally claimed that area as its sovereign territory.

Malaysia

Malaysia’s claims are based on the continental shelf principle.  Malaysia has occupied Turumbu Layang-Layang reef since June 1983. In addition, it currently occupies three islands.  Malaysia has attempted to create an atoll using soil from the mainland.

United States

The U.S. does not currently support the claim of any particular country with regard to the dispute, though it has concerns about China’s regional aspirations for hegemony. 

Australia

In the past, Australia has pressed for a moratorium on occupying or building on reefs or atolls until a final settlement is reached.

Singapore

Singapore fears that an armed conflict over the islands could disrupt shipping lanes in the South China Sea that are vital to its economy. 

Written by Ryan Holliway, Researcher and Writer, CountryWatch Inc. and Denise Youngblood Coleman,  Editor in Chief, CountryWatch Inc.

Sources:

CIA World Factbook, Asia Times, GlobalSecurity.org, Washington Post, Encyclopedia Britannica, Financial Times, Trade and Environment Database. 

China's Illusory Threat to the South China Sea
Michael G. Gallagher

International Security, Vol. 19, No. 1 (Summer, 1994), pp. 169-194