COVER PHOTO U.S. NAVY PHOTO BY MASS COMMUNICATION SPECIALIST JANUARY 2017 2ND CLASS CONOR MINTO/RELEASED. 1616 Rhode Island Avenue NW Washington, DC 20036 202 887 0200 | www.csis.org In the Wake Lanham • Boulder • New York • London 4501 Forbes Boulevard Lanham, MD 20706 301 459 3366 | www.rowman.com of Arbitration Papers from the Sixth Annual CSIS South China Sea Conference editors Murray Hiebert Gregory B. Poling Conor Cronin ISBN 978-1-4422-7984-1 A Report of the Ë|xHSLEOCy279841z v*:+:!:+:! CSIS SOUTHEAST ASIA PROGRAM AND THE ASIA MARITIME TRANSPARENCY INITIATIVE Blank JANUARY 2017 In the Wake of Arbitration Papers from the Sixth Annual CSIS South China Sea Conference EDITORS Murray Hiebert Gregory B. Poling Conor Cronin A REPORT OF THE CSIS SOUTHEAST ASIA PROGRAM AND THE ASIA MARITIME TRANSPARENCY INITIATIVE Lanham • Boulder • New York • London 594-67931_ch00_2Pa.indd 1 1/20/17 12:19 PM About CSIS For over 50 years, the Center for Strategic and International Studies (CSIS) has worked to develop solutions to the world’s greatest policy challenges. T oday, CSIS scholars are providing strategic insights and bipartisan policy solutions to help decisionmakers chart a course toward a better world. CSIS is a nonprofit organ ization headquartered in Washington, D.C. The Center’s 220 full- time staff and large network of affiliated scholars conduct research and analy sis and develop policy initiatives that look into the future and anticipate change. Founded at the height of the Cold War by David M. Abshire and Admiral Arleigh Burke, CSIS was dedicated to finding ways to sustain American prominence and prosperity as a force for good in the world. Since 1962, CSIS has become one of the world’s preeminent international institutions focused on defense and security; regional stability; and transnational challenges ranging from energy and climate to global health and economic integration. Thomas J. Pritzker was named chairman of the CSIS Board of Trustees in November 2015. Former U.S. deputy secretary of defense John J. Hamre has served as the Center’s president and chief executive officer since 2000. CSIS does not take specific policy positions; accordingly, all views expressed herein should be understood to be solely those of the author(s). © 2017 by the Center for Strategic and International Studies. All rights reserved. Acknowle dgments This report is made pos si ble by general support to CSIS. No direct sponsorship has contributed to its publication. ISBN: 978-1-4422-7984-1 (pb); 978-1-4422-7985-8 (eBook) Center for Strategic & International Studies Rowman & Littlefield 1616 Rhode Island Ave nue, NW 4501 Forbes Boulevard Washington, DC 20036 Lanham, MD 20706 202-887-0200 | www . csis . org 301 - 459 - 3366 | www . rowman. c om 594-67931_ch00_2Pa.indd 2 1/20/17 12:19 PM Contents v Preface PART 1. THE SOUTH CHINA SEA IN 2016 3 CHAPTER 1 | U.S. South China Sea Policy 2015–2016: The Growing Role of the Defense Department Michael McDevitt 18 CHAPTER 2 | Understanding Malaysia’s Approach to the South China Sea Dispute Elina Noor PART 2. LEGAL ISSUES 33 CHAPTER 3 | Philippines v. China: Impact of the Arbitral Tribunal Award on the Merits Jay L. Batongbacal 47 CHAPTER 4 | The Effects of the South China Sea Dispute and the Arbitral Ruling on UNCLOS and International Law Erik Franckx 58 CHAPTER 5 | The Law Concerning Military Activities on the Continental Shelf in the Aftermath of the South China Sea Arbitration James Kraska PART 3. MILITARY MODERNIZATION AND CAPACITY BUILDING 71 CHAPTER 6 | China’s Military Modernization and the South China Sea Timothy R. Heath 83 CHAPTER 7 | Indonesia’s Naval and Coast Guard Upgrades and Jokowi’s Global Maritime Fulcrum Natalie Sambhi 95 CHAPTER 8 | Military Modernization and Capacity Building in the Philippines and Vietnam Carlyle A. Thayer III 594-67931_ch00_2Pa.indd 3 1/20/17 12:19 PM PART 4. THE ENVIRONMENTAL QUESTION 113 CHAPTER 9 | Destroyed Reefs, Vanishing Giant Clams: Marine Imperialism E. D. Gomez 124 CHAPTER 10 | Offshore Coral Reefs and High- Tide Features of the South China Sea: Origins, Resources, Recent Damage, and Potential Peace Parks John W. McM anus 148 CHAPTER 11 | Marine Biodiversity at Spratly Islands and Proposal for Establishing Marine Protected Areas Kwang- Tsao Shao 159 About the Editors and Contributors IV Contents 594-67931_ch00_2Pa.indd 4 1/20/17 12:19 PM Preface The Center for Strategic and International Studies (CSIS) hosted its sixth annual South China Sea conference on July 12, 2016. The day featured keynote speeches from Senator Dan Sullivan (R- AK), Committee on Armed Ser vices, and Daniel Kritenbrink, se nior director for Asian Affairs on the National Security Council, as well as four panel discussions with highly respected experts from 10 countries. The event fortuitously fell on the same day that the arbitral tribunal at the Permanent Court of Arbitration in The Hague issued its ruling on the Philippines’ case against China’s claims in the South China Sea. The conference provided the panelists and the audience with a first opportunity to grapple with the results of the tribunal ruling and begin to mea sure its impact. This report contains papers by 11 of the panelists, providing a wide array of perspectives on the po liti cal, l egal, military, and environmental outlook for the South China Sea in 2016. The papers herein are based on the subject m atter to which their authors spoke: • Elina Noor and Admiral Mike McDevitt discuss the state of the South China Sea in 2016. • Erik Franckx, Jay Batongbacal, and James Kraska discuss legal issues of the ruling and next steps. • Carlyle Thayer, Timothy Heath, and Natalie Sambhi discuss military modernization and capacity building in the region. • John Mc Manus, E. D. Gomez, and Kwang- Tsao Shao discuss the impact of the disputes on the environment. The papers that follow represent the views of the authors and do not reflect t hose of CSIS, the Southeast Asia Program, or the Asia Maritime Transparency Initiative. V 594-67931_ch00_2Pa.indd 5 1/20/17 12:19 PM 594-67931_ch00_2Pa.indd 6 1/20/17 12:19 PM PART ONE The South China Sea in 2016 594-67931_ch01_2Pa.indd 1 1/20/17 12:18 PM 594-67931_ch01_2Pa.indd 2 1/20/17 12:18 PM