From Confidence Building, Preventive

Diplomacy and Dispute Resolution to the

ASEAN-China South China Sea Code of Conduct
Carlyle A. Thayer

Presentation to Session 6 - Confidence Building,

Preventive Diplomacy and Dispute Resolution
Tenth South China Sea International Conference
sponsored by the Diplomatic Academy of Vietnam,
Foundation for East Sea Studies
and the Vietnam Lawyers’ Association
Da Nang, Viet Nam, November 7-9, 2018
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From Confidence Building, Preventive Diplomacy and Dispute Resolution to the

ASEAN-China South China Sea Code of Conduct
Carlyle A. Thayer*
Abstract
This paper presents an overview of efforts by the Association of Southeast Asian Nations
(ASEAN) to manage disputes in the South China Sea from 1992 to 2018. It is divided into three
parts. Part 1 reviews ten major turning points: ASEAN statements of concern, ASEAN-China
draft Codes of Conduct (2000), Declaration on Conduct of Parties in the South China Sea
(DOC), Terms of Reference for the Joint Working Group to Implement the DOC, Guidelines to
Implement the DOC, ASEAN ‘s Proposed Elements of a Regional Code of Conduct, ASEAN’s
Six Principles on the South China Sea, ASEAN Consensus (2016), Hot Lines and the Code for
Unplanned Enconters at Sea, and the Framework for the Code of Conduct and Single Draft South
China Sea Neogtiating Text (SDNT). Part 2 discusses six general provisions in the SDNT: duty
to cooperate, promotion of practical maritime cooperation, self-restraint/promotion of trust and
confidence, prevention of incidents, management of incidents, and other undertakings. Part 3, the
concluson, assesses the key issues to be resolved before a final Code of Conduct in the South
China Sea can be adopted.

Introduction
According to the Tentative Program for the 10th South China Sea International Conference
Cooperation for Regional Peace and Development (October 16, 2018):

This panel is designed to review the progress in confidence buildng, preventive

diplomacy, and dispute resolution efforts in the South China Sea. Despite simmering
tenions over the last decade, some positive developments took place. After agreeing on
the framework, ASEAN and China started substantive negotiation on the code of conduct
since early 2018. The two sides already put in place hot lines for emergency and
discussed the extension of the application of CUEs to the coast guard. Talks on joint
development and marine delimitation are also underway between different parties.
Against this backdrop, panelists are tasked with taking stock of the most significant
proceeses, probing the progress and stumbling blocks, and discussing their propsects.

*
Emeritus Professor, The University of New South Wales at the Australian Defence Force Academy, Canberra and
Director, Thayer Consultancy. Email: c.thayer@adfa.edu.au
 3

This paper is divided into three parts. Part 1 identifies the key acomplishments by ASEAN and
China over twenty-three years from 1995 to reach agreement on a Code of Conduct in the South
China Sea (COC). Part 2 evaluates the ASEAN-China Single Draft South China Sea Negotiating
Text with a special focus on confidence building mearures, preventive diplomacy mechanisms,
and efforts at dispute resolution. Part 3, the conclusion, also tooks at likely future challenges.

Part 1 ASEAN-China and the Code of Conduct, 1995-2018

This part identifies ten key turning points or accomplishments in ASEAN’s quest for a COC.
1. ASEAN statements of concern on developments in the South China Sea
The Association of Southeast Asian Nations (ASEAN) issued its first statement of concern on
the South China Sea in July 1992 following several confrontations at sea between Chinese and
Vietnamese vessels in the waters near Vanguard Bank. The ASEAN statement contained key
components that would later be incorporated into the Declaration on Conduct of Parties in the
South China Sea (DOC): the peaceful settlemennt of disputes, the exercise of restraint and four
basic areas of cooperation. The ASEAN Declaration (1992) stated:

1. EMPHASIZE the necessity to resolve all sovereignty and jurisdictional issues pertaining
to the South China Sea by peaceful means, without resort to force;

2. URGE all parties concerned to exercise restraint with the view to creating a positive
climate for the eventual resolution of all disputes;

3. RESOLVE, without prejudicing the sovereignty and jurisdiction of countries having

direct interests in the area, to explore the possibility of cooperation in the South China
Sea relating to the safety of maritime navigation and communication, protection against
pollution of the marine environment, coordination of search and rescue operations, efforts
towards combatting piracy and armed robbery as well as collaboration in the campaign
against illicit trafficking in drugs.

4. COMMEND all parties concerned to apply the principles contained in the Treaty of
Amity and Cooperation in Southeast Asia as the basis for establishing a code of
international conduct over the South China Sea;

5. INVITE all parties concerned to subscribe to this Declaration of principles.

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In March 1995, in response to China’s occupation of Mischief Reef late the previous year,
ASEAN foreign ministers issued their second statement on the South China in which “they
expressed their concern over recent events” and encouraged

all parties concerned to reaffirm their commitment to the principles contained in the 1992
ASEAN Declaration on the South China Sea, which urges all claimants to resolve their
differences by peaceful means and to exercise self-restraint. They also called on them to
refrain from taking actions that could destabilise the region, including possibly
undermining the freedom of navigation and aviation in the affected areas. They also
encouraged the claimants to address the issue in various bilateral and multilateral fora. In
this regard, they reiterated the significance of promoting confidence-building measures
(CBMs) and mutually beneficial cooperative ventures in the ongoing Informal Workshop
Series on Managing Potential Conflicts in the South China Sea initiated by Indonesia.

2. ASEAN and China Exchange Draft COCs

In the aftermath of the Mischief Reef incident ASEAN members and China held diplomatic
discussions on a Code of Conduct in the South China Sea. In March 2000, ASEAN and China
exchanged their respective drafts but were unable to consolidate them into a final agreed text.
Four major areas of disagreement emerged: the geographic scope, restrictions on construction on
occupied and unoccupied features, military activities in waters adjacent to the Spratly islands,
and whether or not fishermen found in disputed waters could be detained and arrested. China’s
draft COC was limited to the Nansha Islands (Spralty Islands), while the ASEAN draft only
referred to Disputed Areas.

3. Declaration on Conduct of Parties in the South China Sea

After two years of negotiations it became evident that no agreement was possible. In November
2002, as a compromise, ASEAN member states and China signed a non-binding political
statement known as the Declaration on Conduct of Parties in the South China Sea (DOC). This
document set out four trust and confidence building measures and five voluntary cooperative
activities:

5. The Parties undertake to exercise self-restraint in the conduct of activities that would
complicate or escalate disputes and affect peace and stability including, among others,
 5

refraining from action of inhabiting on the presently uninhabited islands, reefs, shoals,
cays, and other features and to handle their differences in a constructive manner.

Pending the peaceful settlement of territorial and jurisdictional disputes, the Parties
concerned undertake to intensify efforts to seek ways, in the spirit of cooperation and
understanding, to build trust and confidence between and among them, including:

a. holding dialogues and exchange of views as appropriate between their defense and
military officials;

b. ensuring just and humane treatment of all persons who are either in danger or in
distress;

c. notifying, on a voluntary basis, other Parties concerned of any impending

joint/combined military exercise; and

d. exchanging, on a voluntary basis, relevant information

6. Pending a comprehensive and durable settlement of the disputes, the Parties concerned
may explore or undertake cooperative activities. These may include the following:

a. marine environmental protection;

b. marine scientific research;

c. safety of navigation and communication at sea;

d. search and rescue operation; and

• e. combating transnational crime, including but not limited to trafficking in illicit

drugs, piracy and armed robbery at sea, and illegal traffic in arms.

Significantly, the parties reaffirmed “that the adoption of a code of conduct in the South China
Sea would further promote peace and stability in the region and agree to work, on the basis of
consensus, towards the eventual attainment of this objective.”

4. Terms of Reference for ASEAN-China Joint Working Group to Implement the DOC
In December 2004 ASEAN and Chinese Senior Officials reached agreement on the Terms of
Reference for the Joint ASEAN-China Working Group to Implement the DOC (ASEAN-China
JWG). At the first JWC meeting in August 2005, ASEAN tabled draft Guidelines to Implement
 6

the DOC. Point two of the ASEAN draft called for ASEAN consultations prior to meeting with
China. China opposed this and counter-argued that sovereignty and jurisdictional disputes could
only be resolved bilaterally directly by the parties concerned. In other words China opposed any
involvement by ASEAN as a multilateral institution. This disagreement became a major sticking
point over the course of the following six years no less than twenty-one successive drafts were
exchanged before ASEAN folded.

5. Guidelines to Implement the DOC

In July 2011, the Guidelines to Implement the DOC were finally agreed after ASEAN amended
Point 2 to read: “to promote dialogue and consultation among the parties.” A new point was
added to the original ASEAN draft specifying that activities and projects carried out under the
DOC should be reported to the ASEAN-China Ministerial Meeting. In all other respects the final
guidelines were word for word the same as the original ASEAN draft tabled in 2005.

In January 2012, ASEAN and Chinese senior officials commenced discussions in Beijing on the
implementation of the guidelines. This meeting agreed to set up four expert committees on
maritime scientific research, environmental protection, search and rescue, and transnational
crime. These committees were based on four of the five cooperative activities included in the
2002 DOC. Significantly no expert committee on safety of navigation and communication at sea
was established due to its contentious nature.

The adoption of the DOC Guidelines led ASEAN officials to consider how to implement a
clause in the 2002 DOC to adopt “a code of conduct in the South China Sea… on the basis of
consensus.” In January 2012, the Philippines circulated an informal working draft simply titled,
“Philippines Draft Code of Conduct.” ASEAN senior officials began discussions on this draft
with the intention of reaching a common position before presenting it to China for discussion.

China insisted, however, that the DOC Guidelines should be implemented first. China also
announced that it would discuss the COC with ASEAN at an “appropriate timing” or when
“appropriate conditions” were met. As ASEAN discussions progressed China changed position
and sought to join ASEAN officials in drafting the COC. China’s demarche quickly became a
contentious issue within ASEAN. At the 20th ASEAN Summit in Phnom Penh in April,
Cambodia, the ASEAN Chair, pushed for China’s inclusion in ASEAN discussions. The
Philippines and Vietnam objected strongly and a compromise was reached. It was agreed that
 7

ASEAN would proceed on its own to draft a COC, while communication with China would take
place through the ASEAN Chair.

6. ASEAN’s Proposed Elements of a Regional Code of Conduct in the South China Sea
ASEAN Senior Officials quickly accomplished their task. On June 13, 2012 a special Working
Group reached agreement on key elements to be included in ASEAN’s draft Code of Conduct in
the South China Sea after only seven meetings. This document was formally approved by a
meeting of ASEAN Senior Officials in Phnom Penh from July 6-7. The draft was transmitted to
ASEAN Foreign Ministers for their approval.

ASEAN Foreign Ministers held their 45th Annual Ministerial Meeting (AMM) in Phnom Penh
from July 8-13, 2012. On July 9, the ministers unanimously approved “ASEAN’s Proposed
Elements of a Regional Code of Conduct in the South China Sea (COC) between ASEAN
Member States and the People’s Republic of China.” The Foreign Ministers also directed
ASEAN Senior Officials to meet with their Chinese counterparts to complete negotiations on the
COC.

These positive developments were quickly marred by the extraordinary events at the AMM
Retreat held in the evening of July 9. Cambodia’s foreign minister Hor Nam Hong, as ASEAN
Chair, delegated the task of drawing up the joint statement on AMM discussions to a working
group composed of the foreign ministers from Indonesia, Malaysia, the Philippines, and
Vietnam. When the draft joint statement was tabled at the AMM Retreat Cambodia objected to
the wording of two paragraphs summarizing discussions on the South China Sea. The draft
mentioned the Philippines’ objections to the deployment of Chinese paramilitary vessels to
Scarborough Shoal, and Vietnam’s objections to China’s announcement that it was leasing oil
blocks that fell within Vietnam’s Exclusive Economic Zone. Cambodia insisted that these were
bilateral issues and should not be included in the AMM joint statement.

Despite repeated attempts to broker a compromise over the wording of the South China Sea
section of the joint statement by Indonesia and Singapore, Cambodia remained firm. Hor Nam
Hong reportedly rejected the wording of eighteen successive drafts. As a result no joint statement
was issued. This was unprecedented in ASEAN’s forty-five year history.
 8

7. ASEAN’s Six-Point Principles on the South China Sea.

ASEAN’s disarray proved temporary. Amidst the recriminations that followed the ASEAN’s 45th
AMM, Indonesia’s Foreign Minister Marty Natalegawa initiated consultations with his ASEAN
counterparts in an effort to restore unity and commit ASEAN to a common position on the South
China Sea. Marty conducted an intense round of shuttle diplomacy flying to five capitols
(Manila, Hanoi, Bangkok, Phnom Penh and Singapore) over a two-day period (July 18-19).
Marty and Philippine Foreign Secretary Albert del Rosario met first and agreed to a six-point
proposal that Marty put to his other ASEAN counterparts. After he obtained their agreement
Marty informed Cambodia’s Hor Namhong and left it to him as ASEAN Chair to complete the
diplomatic formalities. On July 20, 2012 Hor Namhong, officially released ASEAN’s Six-Point
Principles on the South China Sea. All ASEAN Foreign Ministers reaffirmed their commitment
to:

 the full implementation of the DOC;

 Guidelines for the Implementation of the DOC;
 the early conclusion of a Regional COC in the South China Sea;
 full respect of the universally recognized principles of international law including the
1982 United Nations Convention on the Law of the Sea (UNCLOS);
 continued exercise of self-restraint and non-use of force by all parties; and
 peaceful resolution of disputes in accordance the universally recognized principles of
international law including the 1982 UNCLOS.

In January 2013, the Philippines, without consultation with other ASEAN members, filed a claim
against China under Annex VII of the United Nations Convention on the Law of the Sea. After
several months of diplomatic exchanges, China and ASEAN commenced their first consultations
on the COC under the umbrella of the ASEAN-China JWG to Implement the DOC at a meeting
of Senior Officials in Suzhou, on September 13, 2013. At the 12th ASEAN-China SOM held in
Quang Ninh, Vietnam on June 9, 2014, Senior Officials discussed the nature of the COC as well
as approaches to designing it for the first time. They also reached agreement to draft guidelines
for a hotline to respond to urgent incidents at sea and complete the wording of the ASEAN-
China Joint Statement on the Implementation of the Code for Unplanned Encounters at Sea
(CUES).
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ASEAN’s desire to press China to quicken the pace on consultations on the COC collided with
Beijing’s obstructionism at the China-ASEAN Foreign Ministers Special Meeting held in
Kunming on June 14, 2016. This meeting was co-chaired by China and Singapore, as ASEAN’s
country coordinator for China. Prior to the meeting ASEAN ministers signed off on an agreed
press statement that expressed their frustration:

We noted that 2016 is a milestone for ASEAN-China relations as it marks the

25th Anniversary of ASEAN-China dialogue relations. We look forward to working together
with China to bring ASEAN-China cooperation to the next level. But we also cannot ignore
what is happening in the South China Sea as it is an important issue in the relations and
cooperation between ASEAN and China. This is the context in which this Special ASEAN-
China Foreign Ministers’ Meeting was held today (emphasis added).

The press statement was anathema to Beijing because China had long argued that the South
China Sea was a bilateral matter that did not involve ASEAN. China, therefore, exerted heavy
diplomatic pressure on ASEAN ministers to drop their press statement and agree to a Chinese
ten-point declaration instead. Cambodia played a willing accomplice to China’s heavy-
handedness and scuttled ASEAN consensus. The special meeting ended in disarray. Singapore’s
foreign minister left early rather than attend the joint press conference. Malaysia, the Philippines
and Vietnam later issued a copy of the press statement that was published in their media.

On 12 July 2016, the Arbitral Tribunal hearing the claims brought by the Philippines against
China issued a unanimous Award that found against China on all but one matter. Chinese
propaganda then went into high gear to attack the probity of the judges and the legal basis of
their Award.

Initially only two ASEAN members, the Philippines and Vietnam, issued statements
acknowledging the Award by name. Since then all ASEAN members have used the
circumlocution “legal and diplomatic processes.” Rodrigo Durtete, newly elected president of the
Philippines, set aside the Award in order to placate if not ingratiate himself to China.

8. ASEAN Consensus on the South China Sea

ASEAN responded by putting on a show of unity at the 49th Annual Ministerial Meeting (AMM)
in Vientiane in July 2016. They adopted four statements:
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 ASEAN Foreign Ministers’ Statement on the Occasion of the 40th Anniversary of the
Treaty of Amity and Cooperation in Southeast Asia (TAC);
 Joint Communiqué of the 49th ASEAN Foreign Ministers’ Meeting, Vientiane, 24 July
2016;
 Joint Statement of the Foreign Ministers of ASEAN Member States and China on the Full
and Effective Implementation of the Declaration on the Conduct of Parties in the South
China Sea (25 July 2016); and
 Joint Statement of the Foreign Ministers of ASEAN Members States on the Maintenance
of Peace, Security and Stability in the Region, July 25, 2018.

9. Hot Lines and Code for Unplanned Encounters at Sea

The following month Chinese and ASEAN Senior Officials met in China for their third meeting
of the year and made notable progress in three areas. First, they approved guidelines for a hotline
for use during maritime emergencies. Second, they agreed that the Code for Unplanned
Encounters at Sea (CUES) applied to the South China Sea. Third, they agreed to complete a draft
framework for the COC by mid-2017. The ASEAN Foreign Ministers’ new consensus was
endorsed by the combined 28th and 29th ASEAN Summits held in Vientiane in September.
ASEAN leaders took note of and endorsed the four key documents issued after the 49th AMM.

10. Framework for and Single Draft South China Sea Code of Conduct Negotiating Text
In August 2017, ASEAN members and China adopted the Framework for the Code of Conduct, a
brief document that outlined the three-part structure of a future Code of Conduct - pre-ambular
provisions, general provisions and final clauses. A year later, on August 3, 2018, the Foreign
Ministers from ASEAN members and China adopted the Single Draft South China Sea Code of
Conduct Negotiating Text (Single Draft Negotiating Text) based on the Framework for the Code
of Conduct.

Part 2 ASEAN-China South China Sea Code of Conduct

The Single Draft Negotiating Text (SDNT) is an unwiedly document that cobbles together
proposals from nine countries identified in the text as BN (Brunei), CA (Cambodia), CH (China),
ID (Indonesia), MY (Malaysia), PH (Philippines, SG (Singapore), TH (Thailand) and VN
(Vietnam). Laos and Myanmar did not table any proposals for inclusion in the SDNT.

The SDNT is characterized as a “living document” subject to further revision that is expected to
 11

pass through three readings before adoption. A proposal by the Philippines, if agreed, would
permit “agreed processes, guidelines and protocols” to be annexed to the final COC.

The SDNT is divided into three parts: Part 1 Preambular provisions, Part 2 General Provisions
and Part 3 Final Clauses. The bulk of the SDNT is contained in Part 2 that is structured as
follows:

2. General Provisions
a. Objectives:
i. To establish a rules-based framework containing a set of norms to guide the
conduct of parties and promote maritime cooperation in the South China Sea;
ii. To promote mutual trust, cooperation and confidence, prevent incidents, manage
incidents should they occur, and create a favourable environment for the peaceful
settlement of the disputes;
iii. To ensure maritime security and safety and freedom of navigation and overflight.
b. Principles
i. Not an instrument to settle territorial disputes or maritime delimitation issues;
ii. Commitment to the purposes and principles of the Charter of the United Nations,
the 1982 United Nations Convention on the Law of the Sea (UNCLOS), the Treaty
of Amity and Cooperation in Southeast Asia (TAC), the Five Principles of Peaceful
Coexistence, and other universally recognized principles of international law;
iii. Commitment to full and effective implementation of the DOC;
iv. Respect for each other's independence, sovereignty and territorial integrity in
accordance with international law, and the principle of non-interference in the
internal affairs of other states.
c. Basic undertakings
i. Duty to cooperate
ii. Promotion of practical maritime cooperation
iii. Self-restraint / Promotion of trust and confidence;
iv. Prevention of incidents;
 Confidence Building Measures
 Hotlines
v. Management of incidents
 Hotlines
vi. Other undertakings, in accordance with international law, to fulfil the objectives
and principles of the COC
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The sections below discuss the six provisions listed under 2.c of the SDNT.

Duty to Cooperate. The SDNT incorporates provisions in UNCLOS that state signatories have a
duty to cooperate to protect the marine environment in a semi-enclosed sea and pending
settlement of disputes state signatories should enter into arrangements of a practical nature.

Promotion of practical maritime cooperation. Section 2.c of the SDNT includes four options on
the promotion of practical maritime cooperation submitted by the Philippines, Indonesia and
Singapore, China, and Cambodia. To complicate matters, Vietnam tabled a separate proposal to
replace all of the recommendations in Section 2c (i-vi).

Options 1, 2 and 4 in Section 2.c (i and ii), by the Philippines, Indonesia-Singapore, and
Cambodia, overlap substantially. These three options all include the five areas of cooperation
included in DOC: marine environmental protection, marine scientific research, safety of
navigation and communication at sea, and combatting transnational crime including but not
limited to trafficking in illicit drugs, piracy and armed robbery at sea, and illegal traffic in arms.
Indonesia’s option includes illegal fishing under transnational crime, while Cambodia’s option
includes marine connectivity.

Option 3, submitted by China proposes, six areas for cooperation to be carried out on a voluntary
basis: (a) development and conservation of fishing resources, (b) maritime law enforcement and
security cooperation, (c) navigation safety and search and rescue operation, (d) maritime
scientific research and environmental protection, (e) marine economy, and (f) marine culture. In
order to carry out cooperation China proposed the establishment of three technical committees:
navigation safety and search and rescue, marine scientific research and environmental protection,
and combating transnational crimes at sea.

Most significantly China’s proposal on cooperation on the marine economy states that
cooperation is to be carried out by the littoral states “and shall not be conducted in cooperation
with companies from countries outside the region.” In contrast, Malaysia proposed that nothing
in the COC “shall affect… rights or ability of the Parties to conduct activities with foreign
countries or private entities of their own choosing.”

Self-restraint/Promotion of trust and confidence. Two options are proposed under 2.c.iii. The
first was tabled by Indonesia and includes four measures: dialogues between defense and
 13

military officials, humane treatment of persons in distress, voluntary notification of impending

joint/combined military exercises and the exchange of relevant information on a regular basis.

The second option under 2.c.iii contains seven points, five of which are proposed by China, one
proposed by the Philippines and the final point proposed jointly by China and the Philippines.
China’s first point states that, “military activities in the region shall be conducive to enhancing
mutual trust.” China’s second point calls for exchanges between defense and military forces
including “mutual port calls of military vessels and joint patrols on a regular basis.” Point three
calls for “undertaking joint military exercises among China and ASEAN Member States on a
regular basis.” China’s point four states:

The Parties shall establish a notification mechanism on military activities, and to notify
each other of major military activities if deemed necessary. The Parties shall not hold
joint military exercises with countries from outside the region, unless the parties
concerned are notified beforehand and express no objection.

China’s fifth point notes that military vessels and aircraft enjoy sovereign immunity and are
“immune from the jurisdiction of any State other than the flag state.” Further, military vessels
and aircraft are entitled to self-defense “but should have due regard for the other side’s military
vessels and military aircraft…”

China and the Philippines both inserted point six that called for the “just and humane treatment
of all persons who are either in danger or in distress in the South China Sea.”

Finally, the Philippines’ point seven called for “respect of the exercise of traditional fishing
rights by fishermen… [and] access to features and fishing grounds.”

Prevention of incidents. Eight countries submitted a total of seven proposals under this heading
that also included a single bullet point - confidence building measures. The first proposal was
endorsed by five countries (Cambodia, China, Indonesia, Singapore and Thailand) and called for
compliance with five international laws and instruments: the 1972 International Regulations for
Preventing Collisions at Sea (COLREG), the 1974 International Convention for the Safety of
Life at Sea (SOLAS), the 1979 International Convention on Maritime Search and Rescue (SAR),
the 1988 Convention for the Suppression of Unlawful Acts against the Safety of Maritime
Navigation (SUA) and the 1990 International Convention on Oil Pollution Preparedness,
 14

Response and Co-operation. This proposal also called for the application of operational
procedures for the promotion of safety of overflight and navigation under the International Civil
Aviation Organization (ICAO) and the International Maritime Organization (IMO).

The Philippines tabled proposals two and three. Proposal two called for governments “at the
appropriate level” to adopt “processes, guidelines and notification protocols to operationalise the
Parties’ obligation to exercise self-restraint in the South China Sea, and mechanisms at the
appropriate levels to ensure their implementation.” The third proposal, noted above,
recommended that, “these agreed processes, guidelines and protocols… shall be annexed to this
Code.”

The fourth proposal, tabled by China, stated that bi- and multi-lateral cooperation among
maritime law enforcement agencies should “adopt an incremental approach and gradually
explore the establishment of cooperation mechanisms.” Brunei, in the fifth proposal, suggested
that the ASEAN-China Maritime Cooperation Fund be used to finance capacity-building projects
such as “English language enrichment projects at the operational level, including with naval and
law enforcement agencies.”

The sixth proposal, suggested by Thailand, called on parties to “carry out and enhance the early
harvest measures… [to] create a conducive atmosphere for strengthening confidence and mutual
trust. The seventh proposal was made by Malaysia. It called on the parties “to prevent incidents
that would affect trust and confidence, and peace and stability in the South China Sea.”

Management of incidents. This section of the SDNT contains perhaps the most detailed
submissions for the management of incidents at sea. Eight countries contributed eleven proposals
with China and Indonesia playing a prominent role. Three of the proposals called for compliance
with the following international laws and instruments to ensure safety of navigation and the
management of incidents/collisions at sea: 1972 COLREG, 1974 SOLAS, International Ship and
Port Facility Security Code (ISPC Code), and Code for Unplanned Encounters at Sea. China
proposed that the parties “carry out joint exercises for the implementation of CUES” and
“develop bilateral and multilateral codes for maritime and air encounters of military ships and
aircraft, consistent with the purposes and principles of the COC.”

The use of hotlines featured prominently as a means of managing incidents. Brunei, Cambodia,
China, Indonesia and Singapore all supported the use of
 15

the MFA-to-MFA [Ministry of Foreign Affairs-to-Ministry of Foreign Affairs] Hotline

established to promote immediate and effective exchange of information and views and
coordination among the MFAs of the ASEAN Member States and China with regard to
maritime emergencies that require immediate policy level intervention, in relation to the
full and effective implementation of the Code, to promote confidence.

China also tabled three separate recommendations: (1) establish bilateral and multilateral
military hotlines among the defence authorities at all levels, (2) establish hotline platforms
among maritime law enforcement agencies; and launch “the Hotline Platform on Search and
Rescue Among China and ASEAN Member states” at an early date, (3) and explore the
possibilities to establish hotline platforms in other fields where there is a practical need.

Indonesia weighed in with the suggestion that seven specific rules and procedures be adopted to
manage and resolve incidents:

a. The relevant Parties shall submit a written chronology of events that include signals
used during an incident and whether or not both sides acknowledged signals; provide
appropriate position, course, speed and bearing, and range data;

b. The relevant Parties shall, when available, submit narrated video, motion pictures,
and/or sequence of photographs;

c. The chiefs of naval operation or naval attachés/military attachés of the parties involved
shall discuss the incident immediately after it occurs;

d. The Parties agreed to establish a hotline of communication between the Ministers of

Foreign Affairs to facilitate the speedy resolution of the incidents;

e. The Parties commit themselves to resolve incidents expeditiously and peacefully

through diplomatic channels by resorting, inter alia, to formal ASEAN-China
mechanisms;

f. The Parties agreed, as appropriate, to resort to the High Council of the Treaty of Amity
and Cooperation (TAC), at the consent of the Parties concerned, to settle any dispute
relating to incidents that may arise in the South China Sea;

g. The Parties agreed that any unresolved incident may be referred to an appropriate
international dispute settlement mechanism, at the consent of the concerned Parties.
 16

Other undertakings. The SDNT contains two options for monitoring implementation. The first
option, supported by Brunei, Cambodia, China, Malaysia and Singapore, vested responsibility
with the ASEAN-China Senior Officials’ Meeting. The second option, proposed by Vietnam,
recommended setting up a Commission led by foreign ministers or their representatives.

Alternate to Section 2.c Basic Undertakings. Vietnam tabled twenty-one proposals as an alternate
to the four options in Section 2.c (Basic Undertakings) summarized above. Vietnam’s proposals
were detailed and formed a coherent whole. Most of Vietnam’s proposals overlapped with those
of other countries and could easily be merged when the SDNT is revised. Of note is Vietnam’s
suggestion that the Contracting States respect “the maritime zones as provided for and
established in accordance with the 1982 UNCLOS” and that the Contracting States provide sixty
days notification of “impending joint/combined military exercise/drill” in the South China Sea.

Vietnam also suggested specific guidance on what the Contracting States should not do:

a. Resort to threat or use of force, coercive actions or any other cruel, inhuman and
degrading treatment and punishment against persons from other Contracting States while
conducting law enforcement activities;

b. Conduct construction of any artificial island in the South China Sea;

c. Initiate, participating in, or allow the use of its territories for any policy or activity that
would complicate or escalate disputes and affect peace and stability;

d. Militarize occupied features in the South China Sea;

e. Blockade vessels carrying provisions or personnel for rotation;

f. Declare an Air Defence Identification Zone (ADIZ) in the South China Sea;

g. Conduct simulated attacks that aim guns, missile launches, inter alia, at targets of other
countries.

The SDNT is a messy work in progress. As soon as it was adopted by the foreign ministers from
China and the ten ASEAN member states senior Chinese officials began cautioning that the text
was complicated and would take a year or more to complete. Overall the SDNT contains little
that is new in terms of confidence building that has not been on the table since the 2002 DOC
 17

was adopted. The most important recent developments have been the hotlines between foreign
ministries and the adoption of CUES for naval vessels plying the waters of the South China Sea.

Conclusion
In looking to the future, at least six major issues must be resolved before the COC can be
completed.

Geographic Scope and Disputed Areas. The SDNT does not clearly define the geographic scope
of the South China Sea. Under General Provisions, Vietnam suggested that, “the present Code of
Conduct shall apply to all disputed features and overlapping maritime areas claimed under the
1982 UNCLOS in the South China Sea.” Indonesia inserted, “the Parties are committed to
respect the Exclusive Economic Zone and continental shelf of the coastal states as provided for
in the 1982 UNCLOS.” Malaysia proposed, “depending on the operative elements/contents of
the COC, the geographic scope/scope of application may have to be defined,” while Singapore
inserted the comment “the Parties may wish to consider the utility of including a section defining
the terms contained herein.”

One possible solution would be to adopt the International Hydrographic Organization’s (IHO)
definition that covers the maritime area to the north of Taiwan, the semi-enclosed sea and the
waters off the mouth of the Straits of Malaysia and Singapore. Of the eleven states that approved
the SDNT only two, Cambodia and Laos, are not members of the IHO.

In addition to defining the geographic scope of the South China Sea, disputed areas need to be
clearly identified and delimited. Each claimant should submit a list of all currently occupied
features in the South China Sea, their classification (island, rock, low-tide elevation), the
baselines to which these features are entitled, and the claimed maritime zone (territorial sea and
Exclusive Economic Zone as appropriate). Claimants could identify and define traditional
fishing grounds.

It should be noted that Indonesia and Vietnam and Vietnam and the Philippines, respectively, are
discussing how to delimit their maritime boundary. The Philippines and China are poised to
discuss joint development.

Military Activities, Exercises and Militarization. It is significant that the SDNT makes explicit
reference to advance notification of military exercises (China’s proposal includes the option of
 18

objecting), military cooperation (dialogues, exchanges, port visits, joint patrols, exchange of
information), military hotlines at various levels of command, and a code for air encounters.
Vietnam has suggested the prohibition of a number of military activities including blockades,
establishing an Air Defence Identification Zones and conducting simulated attacks.

While the SDNT includes the injunction for self-restraint the text needs to be further developed
to deal with on-going militarization. Should there be agreement to freeze the status quo and halt
further militarization (including construction of military facilities). Should the COC include a
commitment by the parties to de-militarize occupied features in the future?

In order to operationalize these proposals it will be necessary to adopt agreed processes,

guidelines and protocols and append them to the final text of the COC.

Cooperation Among Maritime Law Enforcement Agencies. The SDNT contains a number of
proposals for cooperation among maritime law enforcement agencies including the humane
treatment of persons in danger or distress at sea, safety of navigation, communication at sea,
search and rescue, fisheries cooperation, capacity building, joint exercises, hotlines, exchange of
information, and the extension of CUES to Coast Guard-type agencies. These proposals need to
be operationalized in guidelines and protocols attached to the final text of the COC.

Dispute Resolution. The SDNT does not contain any specific reference to the binding dispute
mechanisms included in UNCLOS Annex VII. In fact, the SDNT leaves in limbo the obligation
of signatories to comply with decisions for binding dispute settlement established under Annex
VII of UNCLOS.

There are only two proposals in the SDNT related to dispute resolution. The first was tabled by
Indonesia and suggested the following:

The Parties agreed, as appropriate, to resort to the High Council of the Treaty of Amity
and Cooperation (TAC) at the consent of the Parties concerned, to settle any dispute
relating to incidents that many arise in the South China Sea.

The Parties agreed that any unresolved incident may be referred to an appropriate
international disputes settlement mechanism, at the consent of the concerned Parties.

The second proposal by Vietnam recommended that parties settle their disputes “through friendly
negotiations, enquiry, mediation, conciliation and other means as may be agreed by the disputing
 19

Contracting Parties,” failing that the disputants “utilize the dispute settlement mechanism under
relevant provisions of the Treaty of Amity and Cooperation in Southeast Asia.”

Vietnam concluded that nothing in the COC “shall prevent” the peaceful settlement of disputes
under Article 33(1) of the Charter of the United Nations. Article 33 includes “other means” such
as arbitration, judicial settlement, resort to regional agencies or arrangements, or other peaceful
means decided by the parties concerned.

In sum, the provisions for dispute resolution in the SDNT are weak because they are voluntary
and without means of enforcement.

Legal Status of the COC. The SDNT does not include reference to the COC as a treaty under
international law. It does contain a proposal by Vietnam that the Contracting States “have
consented to be bound by the present Code of Conduct…” Vietnam also suggested that the COC
“be subject to ratification in accordance with the respective internal procedure of the signatory
States” and the instrument of ratification be deposited with the ASEAN Secretary General who
“shall register” the COC pursuant to Article 102 of the Charter of the United Nations.

Both Brunei and Vietnam separately proposed that no Contracting Party may hold a reservation
when signing the COC.

Role of Third Parties. Third parties are states that are not signatories to the COC. There is no
reference in the SDNT about accession to the COC by third parties. Brunei proposed that,
“following the Entry into Force of the COC, the Parties can jointly propose an UNGA (United
Nations General Assembly) biennial resolution which would ensure all other countries respect
the principles contained in the COC.

China’s input into the SDNT aims to bind ASEAN member states in the COC and limit if not
exclude the involvement of third parties in resource development and the conduct of military
exercises.

The final COC should contain a provision permitting third parties who are major stakeholders in
the security and stability of the South China Sea to accede to the Code of Conduct.

In conclusion, the SDNT is a flawed work-in-progress that does not authoritatively address major
issues that are crucial to peace, security and stability in the South China Sea: a definition of
geographic scope and disputed areas; military activities, exercises and militarization;
 20

coordination among maritime law enforcement agencies; dispute resolution; legal status; and the
role of third parties
 21

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