1.

0 INTRODUCTION

The South China Sea is defined by the International Hydrographic Bureau, as the body of

water stretching in a Southwest to Northeast direction, whose southern border is 3 degrees South

latitude between South Sumatra and Kalimantan (Karimata Straits), and whose northern border is

the Strait of Taiwan from the northern tip of Taiwan to the Fukien coast of China. The islands

are important, however, for strategic and political reasons, because ownership claims to them are

used to bolster claims to the surrounding sea and its resources.

The focus of most attention regarding the South China Sea resources has been on

hydrocarbons in general, and oil in particular. Oil deposits have been found in most of the littoral

(adjacent) countries of the South China Sea. The South China Sea region has proven oil reserves

estimated at about 7.5 billion barrels, and oil production in the region is currently over 1.3

million barrels per day. Malaysian production accounts for about one-half of the region's total.

Total South China Sea production has increased gradually over the past few years, primarily as

additional production from China, Malaysia and Vietnam came online.

Many of these islands are partially submerged islets, rocks, and reefs that are little more

than shipping hazards not suitable for habitation. The South China Sea region is the world's

second busiest international sea lane. In Spratly Island, more than half of the world's supertanker

traffic passes through the region's waters. The important thing is, the South China Sea region

contains oil and gas resources strategically located near large energy-consuming countries.

2.0 The Background of Spratly Island

1
The Spratlys are claimed in total by China, Vietnam, and Taiwan, whereas Malaysia laid claim to

parts of the continental shelf underlying the southernmost islands in the chain. Indeed, ownership

of virtually all of the South China Sea is contested. The disputed islands in the South China Sea

assumed importance only after it was disclosed that they were near the potential sites of

substantial offshore oil deposits. The most proactive claimant in the region is China. In 1909 it

seized some islands in Xisha as known as (a.k.a) the Paracels. In 1946 it seized Itu Aba a.k.a in

the Spratlys) and Phu Lan Island also in the Paracels. In 1950's China seized additional Hoang Sa

(Paracels) islands, which it forcibly repeated in 1974. Vietnam claims that these acts were

unlawful and that the United States in 1974 conspired with China for the take-over of the

Paracels.

Competing territorial claims over the South China Sea and its resources are numerous,

with the most contentious revolving around the Spratly Islands and Paracel Islands. In means the

Xisha and the Nansha in Chinese; the Hoang Sa and Truong Sa in Vietnamese. But, the focus

from the Spratly Island issues that making attention is about hydrocarbons in general, and oil in

particular. Oil deposits have been found in most of the littoral (adjacent) countries of the South

China Sea. The South China Sea region has proven oil reserves estimated at about 7.5 billion

barrels, and oil production in the region is currently over 1.3 million barrels per day. Malaysian

production accounts for about one-half of the region's total. Total South China Sea production

has increased gradually over the past few years, primarily as additional production from China,

Malaysia and Vietnam came online. Statoil's Lufeng Field in China in southeast of Hong Kong

came on-stream in 1997, and oil was discovered in 1997 in Vietnam's Block 46 which is

southwest of Vietnam.

2
The table showing about Oil and Gas in the South China Sea Region.

Proven Oil Proven Gas

Gas Production
Reserves Reserves Oil Production
(Billion Cubic
(Billion (Trillion (Barrels/Day)
Feet)
Barrels) Cubic Feet)

Brunei 1.35 14.1 145,000 340

Cambodia 0 0 0 0

China* 1 (est.) 3.5 290,000 141

Indonesia* 0.2 29.7 46,000 0

Malaysia 3.9 79.8 645,000 1,300

Philippines 0.2 2.7 <1,000 0

Singapore 0 0 0 0

Taiwan <0.01 2.7 <1,000 30

Thailand 0.3 7.0 59,000 482

Vietnam 0.6 6.0 180,000 30

Total 7.5 (est.) 145.5 1,367,000 2323

*Only the regions near the South China Sea are included
Proved reserves as of 1/1/98; 1997 production (except Indonesia, where data is as of 1996)
Note: There are no proved reserves for the Spratly and Paracel Islands

3
Oil and Gas in the South China Sea Comparison with other Regions

Proven Oil Proven Gas

Gas Production
Reserves Reserves Oil Production
(Billion Cubic
(Billion (Trillion (Barrels/Day)
Feet)
Barrels) Cubic Feet)

Caspian Sea 15.4-29.0 236- 337 1,000,000 2846

Region

Gulf of 2.7 29.4 1,014,000 5100

Mexico
(U.S.)

North Sea 16.8 156.6 6,200,000 7981

Region

Persian Gulf 674.5 1718 19,226,000 5887

South China 7.5 145.5 1,367,000 2323

Sea

West 21.5 126.3 3,137,000 200 (est.)

Africa/Gulf
of Guinea *

*Region stretching from Côte d'Ivoire (Ivory Coast) to Angola

Proved reserves as of 1/1/98; 1997 production (Gulf of Mexico reserves 1/1/97; production
1996)

Malaysia is not only the biggest oil producer in the region, it is also the dominant natural gas

producer as well, and until recently has been the primary source of growth in regional gas

production. The development of natural gas resources outside of Malaysia has been hampered by

4
the lack of infrastructure. Despite this constraint, natural gas exploration activity elsewhere in the

region had been increasing until the ongoing East Asian economic crisis. Much of this new

activity had occurred in the Gulf of Thailand in waters claimed by Cambodia, where five

companies signed conditional exploration agreements, and in Thailand. In addition, China had

accelerated development of its offshore fields such as Yacheng, Indonesia had discovered the

giant Natuna gas field, the Malaysian Lawit field had come onstream in June 1997, and Vietnam

had made a series of discoveries in the Nam Con Son basin southeast of Vietnam that were

expected to significantly increase its reserves.

3.0 ECONOMIC ASPECTS OF SPRATLY DISPUTE

All the states which are party to the dispute are pursuing rapid economic development no

matter what their size and political complexion. In the post-Cold war era the area around the

South China sea has been the site of the fastest growing economies in the world. Economic

growth naturally involves increasing consumption of resources. The economic importance of

maritime resources has become increasingly prominent in the past two decades. Partly because of

the steady growth of the world population and economic output, and the corresponding increased

demand for raw materials and food, there has been greater pressure for exploitation of the sea-

bed, has been viewed as an alternative avenue for providing resources to meet those increasing

human needs. Accordingly, much of the economic significance of the Spratlys may lie in its

offshore energy resources. In order to have an understanding of this economic potential, it is

appropriate to make an analysis in two parts. The first part surveys the available data concerning

5
either hydrocarbon or 1fishery resources in the sea around the Spratly. The second part is analysis

the oil, gas and fishery resources of the Spratlys in relation to each claimant’s policy for the

exploitation of those resources.1

3.1 Resources on Troubled Waters

Southeast Asia is widely known for its rich oil and gas deposits. Spratly islands area was

perceived as physically dangerous area for exploitation and it has been politically disputed for

decades. The islands are also believed to be sitting on a bountiful supply of oil and natural gas,

as well as from teeming fish and other marine life (Storey, 1999; Odgaard, 2001; Snyder,

n.d.).2The South China Sea ranks, therefore, as one of the richest fishing grounds in the world. A

marine biological expedition indeed collected about 2 597 fish specimens in 1981.

The fishing fleets of the coastal countries of the South China Sea have long been active in the

unpoliced water of Spratly. It also has superb ecotourism potentials. Accordingly, China,

Vietnam, Malaysia and the Philippines had started granting concessions, many of which overlap

or contested by another claimant country, to foreign multinational companies for exploration and

initial drilling in the area (Odgaard, 2001; Phuong, 1997). The islands’ proximity to Taiwan,

which is at loggerheads with Mainland China over its perceived “pro-independence tune”, as

well as the volatile Korean Peninsula, produces additional headaches to security and economic

planners of all Parties concerned. These, and its pivotal geographical position, make the Spratlys

a serious regional security flashpoint, unless efforts, and rapid efforts at that, could be made.

1
Catley B. & Makmur K., Spratly :The Dispute in the South China Sea, Economic Aspects of the Spratly Dispute, pp. 44-45, (Ashgate
Publishing Limited 1997).

2
Resource on Troubled water, political and Economic Repercussion of the Spratly Islands Territorial Dispute, ( Storey, 1999, Odggard, 2001,
snyder, n.d).
6
Since the area is still disputed and therefore no clear-cut demarcation of EEZs amongst the

claimants, jurisdictional conflicts over fishing territory are regular occurrences.3

3.2 China’s Objectives

China is no doubt the larges oil and gas producer among the claimants of the Spratlys.

Whether measure by Chinese official information or by other sources, the figures for China as an

oil and gas producer have been very impressive. However, coal is a much more important source

of China’s energy then either. Chinese government itself has been fully aware that oil and gas

production particularly from its territorial sea and EEZ area should improved if China is to have

a sustainable and high economic growth rate. China energy consumption has risen faster than the

increase in its gross national product. Existing offshore petroleum resources are heavily

exploited and new ones actively pursued by the Chinese government. The phenomenal growth in

the Southern provinces had accelerated after Deng Xiaoping’s famous southern tour of 1992 and

demand for oil was growing at 9 percent annually and by 1994 China was a net importer.

Although Chinese official statements reveal nothing that prove the quest for oil and gas have

prompted them to seize some of the Spratly islands and claim them all, their actions and policies

clearly indicate that is the case. China’s claim over the archipelago is mainly based on the

principle of first discovery and on its own historical records. Thus it can be presumed that the

China occupation had been to some extent motivated by its ambitions to dominate the production

of oil and gas. China is also keen to exploit other resources, particularly fish, in the Spratly.

Mark J. Velencia pointed out in 1981, China had the lowest consumption of fish per capita.

Building up the capability of its fishing fleets in the coastal areas have also been among china

primary goal since the beginning of modernization in 1978. Just as in the Spratly dispute, so in
3
Ibid pp, 45-48.

7
the South East China Sea the economic interests have led China to adopt such stand. But since

there is no generally accepted law for a natural prolongation of an EEZ, China demand might not

be eccepted.4

3.3 Taiwanese Exploration

Taiwan is the most economically developed country among the claimants to the Spratly. Taiwan

rank as the second richest country in the world in terms of foreign exchange reserves. Although

Taiwan is small in size, with twenty million people a main island of only 36 thousand square

kilometers. Taiwan is the only country among the claimants which possesses a long distance blue

water fishing fleet and a most sophisticated fishery industry. Hence one could argue that if the

Spratly were also to be lost to other claimants, Taiwan’s fishery industry would be faced with a

serious crisis. As far as gas and oil are concerned there are some compelling arguments why

Taiwan has large stakes in exploiting the sea area around the Spratly. First, Taipei’s offshore

exploiting of oil near the main island. Seconds, Taiwan has been very depend on energy imports.

Third, there has been domestic political opposition to developing nuclear energy as an alternative

to overcome its vulnerability to energy supply. 5

3.4 Vietnam’s Economic Objective

Vietnam’s energy need, including the development of offshore oil and gas policies

designed to reconstruct its economy and assist its development. The exploration of oil and gas

were indeed given emphasis particularly when the economic liberalization reforms began to
4
Ibid pp. 48-54.

5
Ibid pp. 54-55.

8
produce results in terms of higher economic growth rates after 1988. There is one additional

reasons why Vietnam now places more emphasis on the exploitation of its resources. The oil and

gas deposits of Vietnam seem to be a promising new frontier economically. Vietnam deal with

Nopec to explore the Spratly and the importance it attaches to this region should be understood at

least partly from this economic perspective. The Food and Agriculture Organization statistics

show that Vietnam had only 34 fishery fleets in 1991. Despite this small number, FAO has

observed that fishery exports have steadily improved. There are increasing interests in the

expansion of fisheries in Vietnam. If the entire Spratly were seized by other, Vietnam’s territorial

security would be jeopardized and its economic interest damaged.6

3.5 Philippine Economic Interests

The Philippines is facing a serious problem of energy supply. Despite some efforts to

develop the domestic sources of energy, so it is estimated that 95 percent of its total needs for oil

have to be imported. Because of its vulnerability to energy supply and due to its political

implications, the Philippines governments has been very keen to improve its oil production. For

this purpose, offshore exploitation of Palawan, which is situated adjacent to Kalayaan, the

Philippines claim in the Spratly, has been the main target. The Philippine is hoping that by

exploiting 100 million barrels of oil in the area, the country would become one of the major oil

production in South-east Asia. By claiming part of the Spratly and using the archipelagic

concept, yhe Philippines would gain an additional territory of 360 850 square kilometers. This

would also promote its fishery interest by providing its fleets with additional and exclusive

6
Ibid pp. 55-57.

9
fishing grounds. As the implications of the UNCLOS provisions for archipelagic states and their

EEZs became clear, so the Philippine pressed its claim with more vigour.

3.6 Malaysia’s Economic Objective

The oil industry has been vital for the recent rapid development of the Malaysian

economy. There are projections that Malaysia’s, like China, could face a scarcity of oil by the

turn of this century and it was by the mid 1990s facing a serious balance of payments problem

which threatened to constrain its objective of reaching develop country status by the year 2002. It

is against this background that Malaysia is trying to explore new oil wells in the offshore areas.

The prospects for territories substantial oil deposits adjacent to the territories it claims in the

Spratly has prompted Malaysia to seek to control and explore that region for an exploitable

deposit of oil. That may provide alternative to existing oil wells and sustain Malaysia’s efforts it

maintain the status of newly industrialized country (NIC). Public Affairs Department of

Malaysia has forecast that the future of the oil industry in Malaysia lies in its offshore territory.

The Spratly Island offshore two major economic opportunities, offshore oil and gas deposits and

fishery. The energy deposits are only partly proven and may not yet be recoverable at a cost

which makes them profitable. Since sovereign possession of both resources is more profitable

that acquiring them through trade, the littoral states heve every reasons to pursue energetically

claims to the Spratly which they may possess or contrive, if only for economic reasons.7

4.0 STRATEGIC ASPECTS OF THE SPRATLY: CHINA, TAIWAN AND VIETNAM

7
Ibid pp. 59-60.

10
 CHINA’S ASPIRATIONS

As stated earlier, Chinese concerns over the South China Sea are historically deep rooted.

China’s strategic interests in the South China Sea have been twofold. One is that the South China

Sea may be used to project its power potential to influence the Southeast Asian region and to

derive thereby economic advantage. However, this strategy has had its own limitations. It seems

that China’s past aspirations have been moulded with a view to the power play between China

and its neighbouring countries in North and East Asia. Indeed, the development of China’s naval

power in the early period of the Ming dynasty had been made possible because of the low

intensity of the Mongolian threat on the northern frontier. An analysis of China’s security

concerns in the past shows that the South China Sea has been periodically used by Chinese

kingdoms to extend their power, but that it was also a weak point of Chinese territorial security.

The Chinese reluctance to maintain great naval forces in the South China Sea had partly been a

reason why Western countries and then Japanese military forces did not face greater difficulties

and resistance when intruding into the area before the Second World War. China is, indeed,

geographically faced with the paradoxical nature of its strategic concerns for the South China

Sea. It could be argued that, on the one hand, the South China Sea could provide an opportunity

for developing extra-regional interests beyond the East Asian region, but that on the other hand,

the South China Sea could be the “soft underbelly” of Chinese territorial security. 8 It is against

this historical background that the Chinese position towards the Spratlys should be understood.

Its claim over the Spratlys, and the Paracels, on the one hand, could be seen as part of its efforts

to revitalize its long held aspiration to place the South China Sea under its own domination, and

on the other hand to avoid the continuing incursion of other countries towards its mainland, as

has been occurring since the 1840 Opium War with Britain. Nevertheless, by virtue of its
8
Ibid pp. 66-74
11
carefully calculated military actions when occupying the Paracels in 1974 and parts of the

Spratlys in 1988,and after considering its ambivalent diplomatic position, it is difficult to avoid

the conclusion that the first, strategic, motive has become more apparent. 9

In order to have a balanced perspective about China’s strategies in the Spratlys, it is

necessary to revisit developments in the post-Second World War and Cold War ares. The US

policy of containment against the communist world was witnessed initially in East Asia after

1950 and its firm stand in the Korean War and its concurrent decision to protect the rump KMT

regime on Taiwan. This produced a US strategic determination and consequential requirement to

become a major sea power and continuing military presence in the region. In order to prevent the

US military from having contiguous territory with China the People’s Liberation Army (PLA)

took two million casualties in the Korean War against the vastly technologically superior

American-led UN forces. Consequently, top priority was then given to the improvement of its

army and air force, and the navy was for the time being ignored. The post-1950 alliance with the

Soviet Union was utilized for this purpose. China appeared more as a continental power, and the

largely defensive one at that, rather than a sea power. In the 1960s, despite a substantial change

in its strategic outlook, similar geopolitical constraints on naval expansion continued to exist.

The deterioration in Sino-Soviet relation after 1960 culminating in the 1969 border war and the

associated threat of Soviet military intervention in China, had created an additional constraint

against China playing a bigger role in the South China Sea. China was forced to direct its

security attention to its land territory bordering the former Soviet Union. One reason why China

did nothing to expand its military occupation to the Spratlys in 1974 was because of its larger

geopolitical calculations. Although it had effectively allowed China to have more say and a

9
Ibid pp. 75-83
12
bigger role in the South China Sea, the United States was nonetheless aware of its other security

commitments to the region. It continued to attach importance to its Clark Field air base and

Subic Bay naval base in the Philippines as part of its continuing forward defence policy of the

non-communist world’s maritime borne trading system in the Asia Pasific region. The

importance of these bases was crucial for the American East Asian strategy of continuing to

support and defend the system of free trade from which the economies of East Asia were such

major beneficiaries. The period after 1978 has produced a different order of priorities for China.

In the first place, the year 1978 marked a milestone in the history of China’s modernization with

the return to power of the anti-Maoist faction within the Communist Party led by Deng Xiaoping.

China decided to offer more opportunities for external power to support its economic

development by permitting direct and private foreign investment in that year. Again, 1978

marked a new beginning for China’s armed forces. Facilitated by its strategic consensus with the

US, China’s military modernization was accelerated.10 In short, China’s military action both on

the Paracels and the Spratlys took place at a time when its perceived super power enemies

changed their hostile positions and showed more friendly attitudes toward China. In April 1988,

the Beijing National passed a resolution incorporating the Spratly and the Paracels into Hainan

province. Two months later, China established its first permanent military post in the Spratlys.

4.1 Taiwan’s Strategies

Taiwan took a position of solidarity with China’s military action against Vietnam in

1988. Taiwan’s interests in the South China Sea have been primarily conditioned by its territorial

security considerations. According to Taiwan’s projection, the most likely way for China to
10
Ibid pp. 84-86.

13
implement such a policy would involve three options. First, it could be by launching an open

and direct attack with a full-scale invasion of the entire region of Taiwan. Second, it could be in

the shape of a series of actions, starting by occupying Taiwan’s smaller islands one by one.

Third, it could be in a form of total sea blockade. The strategy of a total sea blockade is

conceived as the most plausible and realistic option as it would entail the lowest risk for China in

terms of casualties and it could be lower in terms of cost. Should take a decision to choose this

option, it would have the potential to create a disaster for Taiwan. It not only would its territorial

sovereignty be damaged but, what is perhaps even more dangerous, the lifeblood of Taiwan’s

economy-international would be put in jeopardy. The sea lanes of communication connecting

Taiwan with the world would be closed and it could subsequently force Taiwan to surrender to

China. It is likely against this background that the geographic location of the Spratly has been of

some strategic importance for Taiwan. Taiwan has embarked on a very ambitious naval

modernization programme. Under Wu Chin 1, 2 and 3 programs, the weapons systems of its

destroyers have been upgraded, and under the Kwanghwa-1 programme, the number and

capability of frigates have also been improved. During the 1990s Taiwan undertook three broad

initiatives. It continued the impressive modernization of its military forces. It began a successful

transformation of its political structure from the military regime established in 1947 to a

functioning democracy culminating in Presidential elections in 1996. After some apparent

hesitation the US deployed a flotilla of the Seventh Fleet around two carriers into the Taiwan

Strait in support of the island state. This clearly demonstrated the continuing utility of sea power

and America’s ability to use it.

4.2 Vietnam’s Strategies

14
 However, most of Vietnam's 18th and 19th century historical evidence, hich Vietnam

maintains included both the Paracel islands and the Spratly islands. Vietnam claims that it

conducted surveys and mapping expeditions to both island groups. However, its activities clearly

focused on the Paracel Islands. Vietnam claims that France administered the islands as part of its

protectorate, established under a 1884 treaty. After France consolidated its hold on Vietnam in a

war with China, the two parties concluded a peace treaty delimiting the boundary of French

Indochina on 27 June 1887. The 1887 treaty has been cited as evidence against French and

Vietnamese claims to the Paracel and Spratly islands. It is unlikely that this allocation can

reasonably be interpreted to reach into the South China Sea, proper, because when extended

beyond the Gulf of Tonkin the line intersects the mainland of Vietnam. Under French

sponsorship, a Vietnamese delegation participated in the 1951 San Francisco peace conference,

where the delegation head issued a statement reaffirming Vietnamese sovereignty over the

Paracel and Spratly islands. Vietnam points out that no delegation objected to the statement, but

fails to mention that China was not represented at the conference. The resulting treaty included a

Japanese renunciation of the Spratly and Paracel islands, without designating which country was

sovereign. Vietnam maintains that the Paracel and Spratly islands, which lie south of the 17th

parallel that formerly separated North and South Vietnam, were transferred by the French to

South Vietnamese administration in 1956. Evidently France ceded control of the Paracel Islands

to Vietnam on 15 October 1950, but there is no record of a similar devolution of French rights in

the Spratly islands when they withdrew from Indochina in 1956. Indeed, in that year the French

reportedly notified the Philippine government that they regarded the Spratly islands as French

territory and had not ceded them to Vietnam.11 On 1 June 1956 the government of South Vietnam

issued a communique reaffirming its sovereignty over the Paracel and Spratly islands. During
11
Ibid pp. 92-96.
15
August 1956 the government of South Vietnam sent a naval patrol to Spratly Island, but it did

not at that time establish a base there.

4.3 Philippine

Spartly island also known as Kalayaan Group by Philippines that means freedom. They called as

freedomland because there is no crime rate in Spratly Island. In May 1956, Retired Admirel

Tomas Cloma Sr., the founder of Philippines Maritime Institute claimed ownership of all

territory comprising 33 island, sand cays, sand bars, coral reef and fishing ground that roughly

64,976 square miles.12 However, during that time the government reluctant to endorse his claim.

Yet, Manila occupied three islands in 1970 until 1971 within the area that had been claimed by

Tomas Cloma before. Philippines sent their troops on Itu Aba Island in 1971. In 1978, late

President Ferdinand Macros signed Presidential Decree which claimed Kalayaan Group over the

Philippines.13 Based on the previous claimed that had been made and the occupied, the former

President claimed that Spratly Island a part of their territory. The eight Island that occupied and

claimed by Philippines are Nanshan, Flat, West York, Northeast Cay, Thitu, Lankiam Cay,

Loaita and Commodore Reef.

Phillippines claimed based on the four arguments. First, islets are adjacent and contiguous.

Philippines argued that the Spratly Island close and nearby to their mainland. Based on the

closed proximity to the Palawan Island that Philippines major westerly island, they said that

Spratly Island is also belongs to them (see Figure 1). Second, economically and strategically

vital. Philippines point out that Spratly Island as the source for hydrocarbon gas and also source

12
B.A Hamzah, The spratlies: What can be done to enhance confidence (ISIS Malaysia 1990)

13
Ibid pp. 6-7
16
of fishery. It is because, Spratly Island located at the South China Sea that rich with natural gas,

oil as well as teeming fish and other marine life. In the year 1988, Philippines, Vietnam and

China begin hydrocarbon exploration activities and began enforcing their alleged economic

rights in that area.14 This lead to rise of disagreement of fishery and hydrocarbon resources. It is

also as strategic location that serves as primary passageway for raw materials coming from

Borneo(Sabah) such as tin, oil, and rubber or from the Mindanao which supply fish.15 Third

argument, the islets were abandoned after World War II. During the World War II, Spratly Island

came under jurisdiction of Japanese Imperial Forces which used those area staging posts to

regulate access through the strategic straits in the area.16 In 1945, Japan surrendered to Allied

Power and withdrew their army from Hainan, Paracels and Spratly Islands. Spratly Island was

abandoned and Japan left Spratly without any marker stone that said that area belongs to them.

Thus, Philippines claimed that Spartly Islands was not belonging to any jurisdiction after World

War II, it is only occupied without any legal declaration. Fourth, Spratly Island recently under

Philippines occupations. The eight Island as mentioned before occupied by Philippines whereby,

Philippines sent their troops and small aircraft has been constructed on Thitu Island. Besides,

Manila also expressed to develop infrastructure for tourism in there. Based on all these

arguments, Philippines claimed Spratly Island belongs to them. Recently, on October, 3 2009,

President Gloria Macapagal Arroyo signed new law adjusting Philippines archipelagic baselines

which is from 12 mile territorial sea up to 24 miles from the baselines. It means Philippines can

enforce its custom, fiscal, immigration or security law and regulations.17 The Exclusive

14
Odgaard L., Deterrence and Co-0peration in the South China Sea, vol. 23. 2001

15
Political and economic repercussions of the Spratly Islands territorial dispute
16
Ibid pp. 3, 6-7.
17
Rodolfo S.C. Clarifying the new Philippines baselines law
17
Economic Zone (EEZ) can expand to 200 nautical miles from the baseline whereby, they can

explore, converse and manage sources and land within it.

4.4 Malaysia

Malaysia claimed over the Spratly Island on 1979. Malaysia had published new map on 1979

whereby, the map consist of a part of Spratly Island was within its area. Malaysia also claimed

apart of Spratly Island which in total 12 island near the Sabah. Among the island claimed by

Malaysia are Ardasier Reef (Terumbu Ubi), Dallas Reef (Terumbu Laya), Louisa Reef (Terumbu

Semarang Barat Kecil), Mariveles Reef (Terumbu Mantanani), Royal Charlotte Reef (Terumbu

Semarang Barat Besar) and Swallow Reef (Terumbu Layang-Layang). However, there are some

of the islands claimed by Malaysia also claimed by other countries such as Commodore Reef

claimed by Philippines, Amboyna Cay and Braque Canada Reef claimed by Vietnam and Brunei

claimed the area around Louisa Reef.

There are few arguments why Malaysia claimed some of the area of Spratly Island. First, Spratly

Island situated in continental shelf (see Figure 2). Based on the map that published in 1979, some

of the Spratly Island include in Malaysia continental shelf. However, Brunei had protested

against the drawing line of map published. In addition, before the Malaysia map was published,

in 1978 a troop from Malaysia Engineers Regiment landed on Amboyna Cay and put marker

stone and returned to Malaysia. After that, Vietnam came to the island, discarded the marker

stone and took over the island until today. Besides, Malaysia troops also landed in Swallow Reef

in 1983. Malaysia had upgraded that island by dredged materials to expand it into a cay of 6

hecteres including 500 metre air strip.18 Second, within its declared Exclusive Economic Zone

(EEZ). Malaysia proclaimed its EEZ in 1980, whereby Malaysia can expand their sources into
18
Daniel J.Z The Spratly Island Disputes: Who’s on First?, vol. 2 no. 1
18
200 nautical miles from the baseline. It means, some of the Spratly Island includes in the zone

and Malaysia can use the sources in that area such as natural gas. Third, proximity to the

mainland. Malaysia claimed that a part of Spratly Island located closed to the west of Malaysia

which is Sabah. Last but not least, Spratly Island is res nullius. In other words, Spratly Island is

uninhabited. Malaysia argue that Spratly Island uninhabited and certainly have no government

thus, it do not belong to any jurisdiction of a country.

4.5 Brunei

On behalf of Brunei, the United Kingdom also protested Malaysia's claim to Louisa Reef on its

1979 map.19 It is because during that time, Brunei was still under the United Kingdom

jurisdiction. Brunei has also published a map of its fishery zone limits. If we take a look the map

that published by the Brunei regarding the fishery zone, if the area of fishery extended, it close to

the Louisa Reef. In addition, Brunei is more concern towards their fishery zone rather than to

have the sovereignty towards Spratly Island. Brunei is reported to claim the marine around the

reef, but does not appear to view the reef as an island subject to a claim of sovereignty. 20 After

Malaysia published map in 1979, Brunei declare their fisheries zone limits in 1983 and publish

printed map describing fishery and continental shelf in 1987. Based on the map, Brunei extended

the area beyond Rifleman Bank whereby, this Bank lies beyond the Malaysia claim and also

discount the Vietnam baseline. Even though Brunei had give statement previously that they more

19
Ibid pp.6-7.
20
Dzurek, D.J (1996). Malaysia Continental Shelf Claim, 1979. Statement of the Foreign
Minister of Brunei, January 1993, as reported in Thomas, 1993: 4.
19
concern towards their fishery zone, however, in the January ASEAN Summit, Brunei’s Foreign

Minister stated at press conference that Brunei claims only sea surrounding Louisa Reef. It is

because Brunei claimed EEZ (Exclusive Economic Zone) to the extend 200 nautical miles that

include the area around Louisa Reef.

5.0 Malaysian sovereignty over Spratly islands. 21

Since 1979, Malaysia was enter the scene of the dispute claims in the South China Sea

when Malaysia claimed for some islets that they argued them under its territories. Malaysia’s

claim is based on the conviction that the islands are situated on its continental shelf, well within

its declared exclusive economic zone (EEZ), security and its proximity to the mainland.

There are Louisa Reef, Royal Charlotte Reef, Marsveles Reef, Andasier Reef,

Commodore Reef, Barque Canada Reef, Amboyna Cay and Swallow Reef. Because of China

and Taiwan have claims that the entire South China Sea is under their territory automatically

there were disputed claims on all of the islets that Malaysian claims into.

Like the other nations who have made invest on their heavy military, economic and

political investments on the territories they are laying claims on , Malaysia also have been made

a various forms of executive act when Malaysia published its Continental shelf on 1979.

Malaysian government also deployed troops in Swallow Reef to show very clear orders defend

their territories.

21
Ibid
20
 Currently Malaysia government occupied and developing the Mariveles Reef and both

Swallow Reef and Ardasier Reef at the south Mariveles. At the present Malaysian government

have developed Swallow Reef as their exclusive tourism resort.

5.1 Why Malaysia claim for these islets?

Malaysia have declared that these islets are under their territories through the establishment of

the exclusive economic zones. Malaysia support its territorial claims by the third of the United

Nations successive Law of the Sea Conferences known as UNCLOS III on 1982. Its clear

provides detail structure of the territorial sea measurement to support for Malaysia claims on its

exclusive economic zone.

According to the UNCLOS III on the doctrine of continental shelf on 1975 determined

adjacent boundaries measured from mainland or archipelagic are baselines to 200 nautical miles.

The customary international law based on more than 65 000 islands boundaries agreement in

1942 until the present also establish the 200 nautical miles boundaries.22

Article 55, the UNCLOS 1982 show that the structure of new regime is an area beyond

and adjacent to the territorial sea. In which by Article 57 defined that structure shall not extend

beyond 200 nautical miles form the baselines from which the breath of the territorial sea is

measured. Refer to all these statement Malaysia claims for some islet in Spratlies Island under its

territories.23

In case of the James Shoal Reef disputed claims between Malaysia with Taiwan and

China, Malaysia government argued that James Shoal Reef is under its territory in which it was

22
UNCLOS III, The doctrine of continental shelf 1975; Article 46 on the Archipelagic State.
23
UNCLOS 1982, Articles 55 ; Article 57
21
only 32 nautical miles from Tanjung Krudong off Bintulu in Sarawak. Logically between

Malaysia and both Taiwan and China, the James Shoal Reef is more proximity toward

Malaysia’s mainland off Sarawak.

While the dispute claim between Malaysia and Brunei Darussalam toward the Louisa

Reef, as Brunei cannot be drawn its normal maritime boundaries without taking into account the

position of Malaysia, its adjacent state. According to the Malaysia continental shelf published on

1979 show that Louisa Reef is under the Malaysia’s territorial sea. But the Malaysia claims for

the Louisa Reef is however relatively weak because the Louisa Reef is only the combination of

two small rock that partially exposed during the high tide.

Malaysia has also claims for Amboyna Cay that located at west of Mariveles Reef that

was protested by Vietnam. Vietnam claims that Amboyna Cay as part of the Spratly Island and

maintains that Amboyna Cay has always been under its territory through legal and history

process. While Malaysia argues that there was no evidence to support Vietnamese claiming.

At the earliest of 1978 before the published of Malaysia’s map on the continental shelf, a

troop from Malaysian Engineers Regiment landed on Amboyna Cay. Apart from an existing

marker stone, there was no evidence on Vietnamese occupation on that island. As it was not

occupied, the Malaysian soldier planted a small monument stone along the existing one. The in

1979 Vietnam returned to that island and removed the Malaysian marker stone.

The claims dispute between Malaysia and Philippine are towards the Commodore Island.

Philippine not only claim for the Commodore Island but for all the cay and reef around the

Commodore Island that they argue that encroached into its Kalayaan Group over which it have

claims to have established ‘sovereignty, title and jurisdiction.

22
 But Malaysia denied the claims made by Philippine on the Commodore Islands and the

other islets that are proximity to the Malaysia’s mainland and are under Malaysia territory.

There were not all the islets around the Commodore Island have claim by Malaysia’s

government but only that are included to the Malaysia’s continental shelf.

As with all of the others islets in Spratly Islands, the ownership of the Swallow islands

are still in disputed claims but it is under controlled by Malaysia. The Malaysian Navy has

maintained an offshore security post called Uniform on Swallow Reef since 1983 and Malaysia

also have a dive resort that has been operated on the island for a number of years.

5.2 Malaysia investment towards the islets

Just like the other nation, Malaysia also have made an investment towards the islets that

Malaysia was claims since a year before. This exclusive action made by the Malaysia’s

government as the clear apparent to maintain its claims on that islets. Its also as the action on to

preserve the Malaysia government appears so that Malaysia have full control to the claims.

For example, Malaysia have develop that Swallow Reef near the Malaysia’s mainland

at the area off Sabah as the exclusive tourism resort. It not only recognized by the Malaysian but

also the others country that the Swallow Reef as one of the Malaysia’s tourism destinations.

6.0 CONCLUSION

The claims dispute in the South China Sea country on the Spratly Island have been happen since

the. The conflict claims over the Spratly Island is a complexity issues as its involved many

countries. All the conflict country refuse to the idea of bringing this cases to the International
23
Court of Justice (IJC) and still continued with the conference and the negotiation between the

dispute countries. Most of the country like China have a strong evidence if the cases viewed by

the history factor. But Malaysia arguing its claim based on the historial right by the colonial

inheritance, outright territorial annexation and the norms of the 20th century.

24