Thayer Consultancy

ABN # 65 648 097 123

Background Briefing: Vietnam: New Maritime Law Carlyle A. Thayer June 25, , 2012

[client name deleted] 1. How would you assess the newly- born Sea Law of Viet Nam as well as the action of approving it of Viet Nam National Congress? ANSWER: The National Assemblys adoption of the Sea Law of Viet Nam lays a legal foundation for Vietnams national sovereignty. While it is unlikely that China and Vietnam will resolve their sovereignty disputes, if they ever do decide to take a territorial dispute to international arbitration to determine sovereignty, international courts will look for evidence of continual occupation and administration. The Sea Law of Viet Nam will strengthen Vietnams case in this respect. Since 1992 when China has begun to adopt a number of laws asserting its sovereignty over maritime areas of the East Sea. It then uses domestic law to trump international law. Vietnam has now replied with its own legal assertion of sovereignty and members of the international community will have to respect this law. 2. Newly-approved Sea Law faced much criticism from China. A Chinese military officer even announced that their army is ready for fight. Besides, China has just decided to establish so-called Sanshi city, which includes the Spratly and the Paracel islands. Taking all these facts into consideration, what would happen in the coming time? ANSWER: In late 2007 it was reported that China has established the Sanshi administrative unit with responsibility over the Paracels, Spratlys and Macclesfield Bank. This led to the first demonstrations by Vietnamese students and youth. China is also trying to lay a legal basis for its claims to historical rights over islands and rocks in the East Sea. China will use its domestic administrative arrangements to assert jurisdiction over these areas. With respect to the Chinese military, they have incorporated legal warfare as part of their military strategy. Chinas laws and administrative arrangements are designed support its sovereignty claims. They are also designed to deter other claimants and to influence third parties from voicing their concerns. China wants other nations to believe it has a legal basis for its claims.

2 Chinese military commentators often take extreme positions. Threats against Vietnam are not official Chinese policy and are unlikely to be carried out. The East Sea has been relatively quiet since the 2011 cable cutting incidents. Any Chinese assertiveness will attract the attention of the international community at the forthcoming meeting of the ASEAN Regional Forum in mid-year and at ASEAN and related summit meetings later in the year. It is not in Chinas interest to be isolated diplomatically.

Suggested citation: Carlyle A. Thayer, Vietnam: New Maritime Law, Thayer Consultancy Background Brief, June 25, 2012.

Thayer Consultancy
ABN # 65 648 097 123

Background Briefing: South China Sea: Vietnams New Martime Law & Russias GAZPROM Carlyle A. Thayer June 25, 2012

[client name deleted] Q1. Vietnam's National Assembly on Thursday approved the country's Maritime Law. China immediately got angry. We would like your asessment on how this latest development will affect the security situation, oil and gas exploration and production in the South China Sea, as well as the relationship between the two countries. ANSWER: The passage of the Luat Biet (Law on the Sea) by Vietnams National Assembly provides the legal basis for Vietnams sovereignty over islands and rocks in the South China Sea, which in turn provides the legal basis for jurisdictional claims over waters surrounding islands and rocks. It is a necessary step for Vietnam to demonstrate continual occupation and administration over features in the South China Sea. While it is highly unlikely that Vietnam and China will resolve their sovereignty dispute, if they did take their disagreement to international arbitration, each would have to make the case that its continual occupation and administration was superior to the other claimant. Chinas protests are a necessary part of the legal game of continually asserting sovereignty and protesting the actions of the other side. Silence can used to argue that China acquiesced to Vietnams legal claim. The Luat Bien puts Vietnam on a more equal footing with China in a legal sense. The current trend is for a lessening of tensions until the draft Code of Conduct is finalized and presented to Beijing. Q2. Regaerding Russia's role in the South China Sea: it seems that the region is now centered on the busy outsiders such as U.S., India and Japan. But if we think a bit more deeply, we will recognize the role of Russia. This silent outside player pumped oil in Vietnam decades ago and is going ahead with new projects in the South China Sea. It is also a traditional arms supplier to the nations in the region, particularly Vietnam. What is your assessment of Russias role. ANSWER: I recently visited St. Petersburg, Russia for a major international conference on security in Asia including Southeast Asia and the South China Sea. Russian diplomats that I spoke to were not concerned at Chinas public statements criticizing GAZPROM for its involvement in new oil blocks in Vietnams Exclusive Economic Zone. The Soviet Union and now Russia has long been involved in

2 developing Vietnams oil and gas industry, but in areas further south. Chinas protest was for the record, designed to shore up its sovereignty claims. Russia is and will become a larger supplier of oil and gas to China via overland pipeline. It is also a major provider of military equipment and technology. It was noticeable in 2008 when Chinese authorities put pressure on foreign oil companies not to become involved in assisting Vietnam, Russia was not affected. Wikileaks cables reveal that Russian diplomats queried the U.S. Embassy concerned that they might be next. Russia is Vietnams largest supplier of military equipment. But it is noticeable that Vietnam is diversifying its source of new arms and military technology procurements to western countries. The most significant is the purchase of four Sigma-class corvettes from the Netherlands.

Suggested citation: Carlyle A. Thayer, South China Sea: Vietnams New Martime Law & Russias GAZPROM, Thayer Consultancy Background Brief, June 25, 2012.

Thayer Consultancy
ABN # 65 648 097 123

Background Briefing: Vietnams New Maritime Law and Chinas Response Carlyle A. Thayer July 2, 2012

[client name deleted] Q1. How do you assess the recent move by Vietnam with its new Maritime Law, which formally incorporated the Paracels and the Spratlys into its territory ? ANSWER: The passage of this law is a natural development to Vietnams Maritime Strategy to 2020. No text of the legislation, Luat Bien, has been made public. But statements by Vietnamese officials indicate that the Maritime Law incorporates international law, the UN Convention on Law of the Sea, into domestic legislation. It specifies jurisdiction over the various types of maritime domains: inland waters, territorial sea, contiguous zone, exclusive economic zone, continental shelf, islands and archipelagos. Vietnams actions are seen as highly provocative by China as evidenced by the actions of the China National Offshore Oil Company (CNOOC) in putting out to tender nine exploration blocks lying in the area seaward of its ninedash line but entirely within Vietnams EEZ. Q2. What are the differences between this law and previous Vietnamese legislations on the sea and islands ? ANSWER: Vietnam has never adopted a formal Maritime Law. There are scattered references to Vietnams maritime jurisdiction in various legal documents. But this is the first time that Vietnam has clarified the legal status of its maritime domain, including features (islands and rocks) as well as maritime jurisdiction. The full text of the Luat Bien has not been published. Q3. What can this law bring to Vietnam in its dispute with China in the South China Sea ? or is it simply a symbolic gesture ? ANSWER: The law is a necessary instrument for Vietnam if it ever takes its territorial dispute in the East Sea with China to international arbitration. International courts look at claims to sovereignty on the basis of continuous occupation and administration. Having enacted the law it is now up to Vietnam to protect its sovereignty and sovereign rights. China also claims the waters seaward of the ushaped line. This situation could become potentially explosive if China attempts to explore for oil in Vietnams EEZ or if China interferes with commercial operations in Vietnams EEZ that it claims. Q4. For you, is it a surprising move ?

2 ANSWER: I was caught unawares because I failed to notice any mention of the Maritime Law in the work program of the National Assembly session that just ended. The National Assembly has been considering a Maritime Law since 1998. This raises the question of timing. It would seem likely that the Maritime Law was ratified in order to shore up Vietnams legal case if cooperative activities under the DOC are undertaken and also in the case if a Code of Conduct is agreed. Q5. Some said that this move was a kind of provocation. Others saw that it was a bold one. Your opinion on that matter? ANSWER: China certainly took the passage of the Maritime Law as a provocation because its diplomats have been applying pressure on Vietnam not to proceed with ratification. Thus China has plenty of time to prepare a response. It is significant that China chose to use a state-owned oil company as its cats paw. This makes the issue legal and commercial. The passage of the Maritime Law is fully in accord with Vietnam dual policy of doi tac (cooperation) and doi tuong (struggle). Vietnam must struggle to uphold national sovereignty. Q6. What do you think about the timing (roughly two weeks before the annual ARF and ASEAN meetings in Phnom Penh and after the visit of Leon Panetta to Cam Ranh)? ANSWER: I would argue that Vietnam was motivated to pass the law to strengthen the legal basis of its claims with regard to negotiations to implement the DOC and to adopt a Code of Conduct. In 2000-02 ASEAN states and China could not agree on the area to be covered and so the original COC failed and a weaker DOC was adopted. Now Vietnam has reinforced its claims to include the Hoang Sa and Truong Sa archipelagos. The United States will not get directly involved in a legal disputed. Vietnam could not have anticipated China response. CNOOCs concessions include an area where ExonMobile is operating. The US has always added unimpeded commerce to its national interests in freedom of navigation and overflight. China, on the other hand, has consistently argued that U.S. involvement only emboldens Vietnam and the Philippines to stand up to China. Chinese officials may well have concluded that Vietnam acted in the shadow of Secretary Panettas visit. But with respect to the ARF, China has badly miscalculated. CNOOCs actions coupled with the dispatch of four China Marine Surveillance ships to the South China Sea will only ensure that this issue is raised at the ARF meeting this month. Chinas actions may prove counter-productive if they stiffen the resolve of ASEAN states to negotiate a more binding Code of Conduct. Q7. Chinese government had protested vehemently, Chinese state media - the Global Times for example had urged countermeasures to teach Vietnam a lesson. What would happen now? ANSWER: The Chinese media frequently resorts to extremist language and threats. By and large it can be discounted as nationalist bluster. The Global Times is nothing more than the regimes Rottweiler, a vicious guard dog. The real indicator of what

3 actions China may take may be found in the words of official spokespersons and high-level officials. Q8. All your other assessments on that matter are welcomed. ANSWER: Media reports indicate that the power shift in Chinas leadership is proving internally divisive. This is a recipe for belligerence in the South China Sea, not just in reaction to Vietnams passage of a Maritime Law but to intransigence by the Philippines and the Obama Administrations rebalancing towards the Asia Pacific. China may view disarray in ASEAN and the U.S. election period as providing an opportunity for it to act more assertively.

Suggested citation: Carlyle A. Thayer, Vietnams New Maritime Law and Chinas Response, Thayer Consultancy Background Brief, July 2, 2012.