What the South China Sea code of conduct talks should focus on instead of dispute resolution

Better to let states resolve things bilaterally, given the complexity of the disputes and Asean’s traditional approach
Instead, the code of conduct should bind China and Asean into good behaviours: respecting the status quo and refraining from military activity

Riaz Khokhar

Published: 1:00am, 14 Jul 2023

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As Asean foreign ministers gather in Jakarta this week, the focus will be on discussions with China’s foreign policy chief Wang Yi on the South China Sea code of conduct. Wang is representing Beijing in place of foreign minister Qin Gang, absent because of health reasons. Wang’s presence shows China’s acknowledgement of the significance of the code of conduct talks and its engagement with the Association of Southeast Asian Nations.

Since the 2018 adoption of the “single draft negotiating text”, only one reading has been completed, leaving two more to finalise the code of conduct. These readings aim to narrow down the differences between conflicting parties in the South China Sea.

For some Asean members, the main obstacles revolve around China’s military assertiveness against their energy exploration and fishing in disputed territorial waters and exclusive economic zones. For Beijing, outside interference in regional affairs, primarily by the United States, is the most significant concern. Beijing sees this interference as encouraging Asean members, particularly the Philippines and Vietnam, to assert their territorial claims and adopt anti-China foreign policies.

A successful code of conduct would legally bind each party, halting China’s aggressive military posture against Asean members’ economic activity in the South China Sea, while regional states refrain from inviting or supporting US military intervention. It would ensure water disputes do not hinder economic development and maritime cooperation between China and Asean.

But the code of conduct should not govern dispute resolution. This is despite criticism that China prefers to resolve its disputes bilaterally and separately from code of conduct discussions because it would grant it greater leverage. Or that, unless Asean can establish a consensus in resolving maritime disputes with China, Beijing will be able to continue to offer economic benefits in exchange for shelving the disputes.

Indeed, China employs a “dual track” approach in the South China Sea: aiming to negotiate directly with claimant states while working with Asean to maintain peace and stability.

There are two key reasons the bilateral resolution of disputes is important. Firstly, the complexity of the disputes makes collective negotiations with China challenging.

China claims at least 62 per cent of the South China Sea, encompassing areas from the Taiwan Strait to the north of the Natuna Islands and the south of the Gulf of Tonkin. Vietnam claims the Paracel and Spratly Islands, the Philippines claims parts of the Spratlys and Scarborough Shoal, Malaysia claims a few areas of the Spratlys, and Brunei claims Louisa Reef within the Spratlys.

Each country has its rationale for its claims. Moreover, some Southeast Asian countries have disputes with each other over areas also claimed by China, further complicating the resolution process.

Secondly, pursuing bilateral dispute resolutions with China aligns with Asean’s approach to regional disputes. Asean has remained neutral towards most developments related to the disputed regions between China, the Philippines and Vietnam. It did not even support the 2016 international tribunal judgment against China.

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Critics point out that many Asean members are China’s close economic partners, some have no disputes with China, and there are conflicting maritime boundaries among members. This lack of consensus hinders a collective approach.

That is true. But that premise also lends stronger support to pursuing the bilateral resolution of disputes. Given Asean’s inability to reach a consensus on regional disputes, discussing the matter within the bloc is futile.

Asean’s outlook on the Indo-Pacific, adopted in 2019, prioritises dispute prevention and management for a peaceful and comprehensive resolution. Asean centrality does not imply that claimant states must resolve their bilateral disputes by seeking the consensus of other bloc members. This approach would only complicate the issues and prolong the disputes.

Instead, Asean provides a framework to manage and address common challenges. In essence, regional countries show commitment to Asean by upholding its principles and pursuing the common goals of regional peace and stability. Other countries, in interacting with Asean, are also expected to consider the bloc’s principles. Asean values efforts by regional states to prevent, manage and ultimately resolve such issues.

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To prevent the South China Sea disputes from escalating into conflict, one crucial step is to establish a legally binding code of conduct that explicitly addresses two key behaviours.

Firstly, all parties must respect the status quo of the controlled areas. This means refraining from further occupation, particularly in the Xisha/Paracel and Nansha/Spratly Islands. The code of conduct should neither legitimise their territorial control nor incentivise further acquisition – behaviours that have not stopped after the 2002 non-binding Declaration on the Conduct of Parties in the South China Sea.

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Secondly, the parties should abstain from military activity within disputed areas. China must be legally restricted from using military vessels to intimidate when other regional countries are carrying out economic activities in their exclusive economic zones or territorial seas. Likewise, Asean members should be prohibited from conducting military exercises, especially with external powers, or permitting their military vessels and aircraft to navigate in disputed areas.

Should any party breach these commitments, the opposing party would be authorised to pursue actions that align with its national interests. For instance, if China threatens the fishing and energy exploration of Asean members, they would be permitted to conduct military activities alongside the US and other nations within the disputed regions. They could also seek international intervention to hold China accountable. Conversely, if any Asean member violates the commitments, China would have the licence to respond militarily.

A binding code of conduct with these principles would pave the way for countries to peacefully pursue maritime cooperation, including joint economic development and fishing and energy exploration, in the South China Sea.

Riaz Khokhar is a research analyst on geopolitics and security of the Indo-Pacific region and a former Asia studies visiting fellow at East-West Center in Washington