Speaking for the Marine Living Resources in the South China Sea: Balancing the attention between dispute settlement and sustainable fisheries and environmental management

12 December | Ann Zhang, Deloitte Australia

It is not peculiar to the South China Sea (SCS) that commercial incentives to catch as many fish as possible encourage over-exploitation of fish stocks and threaten the integrity of the marine ecosystem. A disproportionate focus on the current SCS maritime disputes may harm the rule of law regarding marine resources conservation, and overlook a critical group of stakeholders in this regard – the fishing businesses. The Philippines-China Arbitration highlights certain limits of the Tribunal, yet from a fisheries management perspective, this case exposes the concern that an unbalanced attention towards dispute settlement may take an unnecessary priority over the pressing need to govern sustainable commercial fishing in the region. This would further set aside longer-term environmental conservation objectives.

The United Nations Convention on the Law of the Sea (LOSC)¹ extends coastal states' fishing jurisdiction to the 200nm exclusive economic zone (EEZ), where 95% of the global commercial fish resources occur.² The SCS is a well-known hub of tropical shallow-water biodiversity;³ it is also a region with three of the world's top fishing nations.⁴ Unsustainable fishing practices, especially illegal, unreported, and unregulated (IUU) fishing, continuously pose serious economic and environmental concerns to states, regional and international organisations. The LOSC provides certain duties of state parties when fishing in their respective maritime zones,⁵ however this is based on the assumption that these zones are clearly delimited, or in practical terms, uncontested by coastal states. In the SCS, not only is the status of many maritime features challenged (for instance, rocks/islands and low-tide elevations), understanding of the associated maritime entitlements and legality of state activities is far from settled. The issue of sustainable commercial fishing is at the risk of being downgraded to a matter of argument in dispute settlement or a subsidiary issue that lacks traction due to its intricate relationship with the notion of territorial sovereignty.

China's failure to protect the marine environment and prevent its nationals from exploiting the Philippines' living resources in the latter's EEZ was precisely one of the arguments put forward.⁶ Upon deliberation of China's practices at Mischief Reef and Second Thomas Shoal, the Tribunal ruled that the LOSC imposes obligations directly on both private parties engaged in fishing as well as flag states with respect to fishing by its nationals.⁷ It may be beneficial that this ruling clarifies the law regarding parties' 'due regard' and 'due diligence' obligations,⁸ however less helpful from the perspective of fisheries management. The imminent issue of fisheries depletion is not subject to outcomes of dispute settlement, it needs to be addressed independently and proactively before damages become irreversible.

Commercial fishing rights are also closely connected to the thorny issue of sovereignty in the SCS. Settling disputes regarding maritime entitlements requires an interpretation of the applicable rule of law against the backdrop of territorial sovereignty.⁹ The complication is that the Tribunal does not have jurisdiction to address this matter. Despite its statement that the Arbitral Award is not dependent on the finding of sovereignty, this concept is nonetheless crucial and problematic. China asserts historic rights and sovereignty based on the 'nine-dash line' and rejects the Tribunal's rulings. Although the decision may facilitate some Southeast Asian states claiming EEZs, its practical application is troublesome without clearing the sovereignty roadblock. When facing a regional superpower who considers safeguarding fishing rights part of safeguarding sovereignty, and is prepared to take a tough stance in fisheries conflicts,¹⁰ tackling the relatively subsidiary issue of fisheries over-exploitation is at the bottom of the list. Further, documents adduced by the Philippines pointed to China's harmful fishing practices and harvesting of endangered species. The Tribunal competently exercised its jurisdiction to address the violation of LOSC Articles 192 and 194(5) in this regard, but the critical next step is to execute measures that are capable of correcting unlawful behaviours. It may well be possible that current IUU fishing businesses are taking a free ride when international spotlight is on the geopolitical tension build-up. From the dispute settlement's perspective, at least a closer nexus needs to be fostered between states' maritime claims (sovereignty or EEZ) and responsible commercial fishing to ensure a sustainable future.

However it may be argued that although in dispute, states do not contest their treaty obligations on marine environmental conservation, and many have enacted domestic laws to the same effect. China, for instance, have long-established domestic fishing operation measures and enforcement mechanisms.¹¹ This interplay between international and domestic rule of law seems logically compatible until a sharp discrepancy was revealed in the Arbitration. The 'Nansha certification of fishing permit' issued by the Chinese government to its nationals fishing in the Spratly Islands is legitimate under domestic law, yet the legality (under international law) and consequences of fishing activities following these permits must be examined on a multi-dimensional front. Moreover, information presented in this Arbitral Award offer valuable insights to the current commercial maritime activities in the region. Attention and further investigations beyond the remit of the Arbitration would be valuable for exploring the potential contribution of the diverse stakeholders (especially businesses and other non-state actors) in marine environmental management moving forward.

The protracted maritime dispute in the SCS may detract from regional attention and effort in preserving the fragile marine ecosystem. Balancing the focus towards sustainable resources and environmental protection is to enhance the fundamental principles of the LOSC and broader rule of law regarding responsible commercial fishing practices. A dispute can be resolved through a variety of means, but a 'tragedy of the commons' will be permanent.

¹ United Nations Convention on the Law of the Sea, opened for signature 10 December 1982, 1833 UTS 3 (entered into force 16 November 1994) ('LOSC').

² Donald R Rothwell and Tim Stephens, The International Law of the Sea (Harts Publishing, 2nd ed, 2016) 320.

³ United Nations Environment Programme, Strategic Action Programme for the South China Sea (25 August 2008) 35.

⁴ China, Indonesia and Japan, according to FAO, The State of World Fisheries and Aquaculture 2016: Table 2 Marine Capture Production: Major Producers, 11.

⁵ See, eg, LOSC art 51(1), 61-63, 87(1)(e), 116-9.

⁶ Submission No. 9 of the Philippines.

⁷ South China Sea Arbitration (Philippines v China) (Award) (Arbitral Tribunal Constituted under Annex VII to LOSC, Case No 2013-19, 12 July 2016) [740]-[741] ('Arbitration').

⁸ LOSC art 58(3); Request for an Advisory Opinion submitted by the Sub-Regional Fisheries Commission (Advisory Opinion) [2015] ITLOS Rep No 21, [129].

⁹ Arbitration [5].

¹⁰ See, eg, Xiaoli Liu and Xiaokun Li, New Hainan port opens as annual fishing ban ends (2 August 2016) China Daily http://usa.chinadaily.com.cn/china/2016-08/02/content_26305536.htm

¹¹ Keyuan Zou, China's Marine Legal System and the Law of the Sea (Martinus Nijhoff, 2005) 113-8.