Muhon in the high seas

Land ownership is such a rush. When one can get land for free, the rush is quite literal. On top of their horses, inside carriages, some on bicycles, and some simply making a run for it, people went all out in a race for parcels of land in what should have been Indian Territory, eventually called Oklahoma. By historical anecdotes, and film adaptations, people waited for one gunshot that marked the start of The Great Land Rush of 1893—a race towards 42,000 parcels of land, participated in by some 100,000 hopefuls. When the dust cleared, and successful racers were able to secure their spots, the next things heard were gunshots that scream: “Keep off my property!” Boundary markers spelled the difference between life and death. Boundary markers are popularly referred to in the Philippines as “muhon”.

In that anecdote, in this country or in any place, the boundaries of property, to achieve exclusive possession of the property, are important because that territory is where one’s home is. A man’s home on his property is at times equated with his life. To defend his home is to defend his life.

After two world wars, where the capable, mighty and greedy would occupy territories under a high-stakes, “finders keepers” game, the United Nations was formed. And among other international treaties, the UN Convention on the Law of the Seas (UNCLOS) was passed. Since 1983, the UNCLOS was signed and ratified by 167 countries and UN member states. The Philippines signed in 1984 and China in 1996.

The UNCLOS talked about a country’s internal waters, a territorial sea of 12 nautical miles where government can impose tax and customs laws, and an Exclusive Economic Zone (EEZ) with 200 nautical miles. The EEZ is measured from a country’s shore and extends 200 nautical miles into the adjacent sea. A country has the sole right to exploit all natural resources and minerals within its EEZ, with one additional privilege: it can create artificial islands within its EEZ. Outside of the EEZ is the high sea, which no one can own nor exercise exclusive economic rights or jurisdiction over. Anyone can feel what the UNCLOS is saying: no more occupations, no more land (or country) grabbing, nor sea grabbing, for that matter. These tactics of the greedy led the world to senseless wars, economic retrogression, human violations and deaths—massive, brutal and unabated. No more, said almost all countries of the world. Thus the UN, thus the UNCLOS.

The South China Sea, according to the US Energy Information Administration (USEIA) has estimated 11 billion barrels of oil and 190 trillion cubic feet of natural gas in proven and probable reserves. The Spratly Islands consist of more than 100 islands, reefs, cay and shoals. The South China Sea is strategic commercially for shipping traffic, and militarily, as has been used by Japan in WW2.

The Spratly Islands are located more than 1,500 miles from China, and about 100 miles from the Palawan. How we wish we could rest our case on that. If you look at any impartial world map, before Chinese vessels can reach the Spratlys, they would need to pass by the corridors of the Philippines and Vietnam, and then they would be stopped by the land territories of Malaysia and Brunei, just below the Spratlys. We can easily say “pass by the corridors” of the Philippines because the Spratlys are west of Palawan, which means Chinese vessels would need to go alongside the “head” of the Philippine archipelago (Luzon) before they get to the side of the belly portion (Visayas).

If I took time describing how it looks, it is to say res ipsa loquitur or the thing speaks for itself. It also shows Vietnam and Malaysia are much nearer to the Islands than China, with the Philippines being the nearest. It is also the same reason why China and the Philippines cannot negotiate, much less enter into an agreement, on the Spratlys because they are not the only interested parties.

China says they have historic rights over the Spratlys and they own that part of the sea evidenced by the world calling it as South China Sea. If one reads the literature on the matter, it would seem that because China’s land territory is huge, explorers or colonizers would use China as reference point to describe that part of the sea. Translated into a long sentence, it would be: The sea that is south of China, of course far south of China, west of the Philippines, east of Vietnam and north of Malaysia.

Secretary of Foreign Affairs Albert del Rosario articulately said in the Philippines’ opening statement in the Hague hearing on jurisdiction that: the UNCLOS overcomes China’s claims of historic rights.

China said that while it ratified the UNCLOS, it never said it will succumb to the jurisdiction of the international arbitration panel, nor did it abandon its sovereignty over Islands it allegedly owns. It’s another way of saying, “our ratification of UNCLOS is meaningless, and no one can do anything about it”.

In global forums, the Philippine government would say that the Philippines’ relationship with China has many angles, and territory is just one of them, and that trade with China has even dramatically increased despite the territorial dispute. Justice Antonio Carpio, a subject matter expert on the West Philippine Sea, would call this an inter-generational struggle as it may take generations to resolve. To say that the situation is complex is almost an understatement.

There should be no mistaking, however, that the international arbitration panel is not merely a mediation panel where it would try to make the parties agree with one another. The arbitration panel will make a decision and will make an order. If the Philippines ultimately wins and China does not comply, resort can be made to the UN Security Council for enforcement. Economic sanctions can be imposed but extremely difficult to do so on a global economic power as it will hurt even those who would implement the sanctions. The next stage of enforcement by air, sea or land force is unthinkable, but force seems to be the only sanction that China fears. It may also have more dire effects on the global economy versus mere economic sanctions.

What the Philippines has done, however, is not without strong effects. The Philippines has put the UNCLOS and the UN, as a whole, to the litmus test. Will the world progress with governance and order, or shall we revert to the animal planet where the big and strong can do as they please to the small and weak? Is the UN merely a coalition of the willing, when willing, or does it really represent a global compact among all mankind grounded on principles of respect for each country’s life and home? The toughest decisions in history are the most important, and most defining. The Philippine challenges may yet bring the UN to its finest hour.

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Alexander B. Cabrera is the chairman and senior partner of Isla Lipana & Co./PwC Philippines. He also chairs the tax committee of the Management Association of the Philippines (MAP). Email your comments and questions to aseasyasABC@ph.pwc.com. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.