Vietnamlawmagazine

near Haiyang-Shiyou 981 oil rig __Photo: Khanh Hieu - Quang Vu/VNA

Purposes of the deployment of the oil rig

Some experts have said that China’s deployment of the HS-981 oil rig in Vietnam’s waters is a response to US President Barack Obama’s visit to four Asian countries from April 21-29, 2014, and an action to satisfy its thirst for energy. In fact, the ability to deploy an oil rig had been anticipated since 1992 when China signed an illegal cooperation agreement with Crestone (US) on the waters covering 125,000 km². This is the area of Tu Chinh (called Vanguard by China) Bank in the continental shelf of Vietnam which China claims belongs to the Chinese sovereignty but lays on the other country’s continental shelf. This ability became clear when the HS-981 oil rig was completed in 2011 and conducted the first drilling in May 2012. In June 2012, the CNOOC called bids for the nine oil lots in the near shore of central Vietnam.[7] The South China Sea with its strategic location - connecting two oceans, with abundant oil and gas resources, natural hydrate and aquatic resources - has become a “hot spot” in the game between the two superpowers, China and the US. The number of international oil tankers passing through the South China Sea accounts for more than half of the world, three times the number of ships passing the Suez Canal, and five times that passing the Panama Canal.[8]

China is the world’s second-largest market for oil and gas, and oil is mainly transported across the Pacific through the critical shipping lanes in the South China Sea so China cannot let the US and its allies control its energy security. China’s maritime security strategy will only succeed if it has the South China Sea as its backyard (core benefits) to avoid direct competition with the US and its allies - Japan and South Korea - in the East China Sea. This strategy is contrary to China’s “peaceful rise” statement. To soften that contradiction, China has put out a policy combining the irrational “nine-dash line” and the doctrine of “sovereignty belongs to China, setting aside disputes and pursuing joint development”. The maritime activities of China in recent years are part of a strategy of hard line but avoiding confrontation with the US, and taking tough actions against selective neighbors, which are provocative enough to achieve China’s short-term goals but still do not cross the red line of war.

Maintaining the U-shaped line as the basis for “setting aside disputes and pursuing joint development” is one aim. China’s most modern facilities are tested in the South China Sea, from the Liaoning aircraft carrier to the HS-981 oil rig and nuclear-powered submarines. The next targets of the HS-981 oil rig may be the Tu Chinh (called Vanguard by Chinaese) Bank, the nine oil blocks along the central coast of Vietnam that the CNOOC offered invitations for illegal bids, Bai Co Rong (Reed Bank), Bai Co May (Second Thomas Shoal), Tang Mau (James Shoal) or anyplace within the U-shaped line. But the priority will be given to coastal areas of other countries where the commercial exploitation of oil and gas has been confirmed. The deployment of the oil rig immediately after US President Obama’s trip to Asia is said to be China’s harsh reaction to the US, but preparations to deploy the oil rig and escort vessels could not take place in several days. The US’s response to Russia’s annexation of Crimea has reinforced China’s determination. The Asian visit by President Obama was only the catalyst. The deployment had been decided and is part of the long-term roadmap for acquiring the South China Sea. This was a geopolitical decision and not merely an economic decision when China set the USD 1 billion oil rig in the waters where the economic potential is unclear.

Besides these above-mentioned reasons, there are several other factors that can affect this decision. It is the way of using external issues to mitigate and settle internal matters, when riots continuously occurred in Guangzhou, Yunnan, and especially in Xinjiang, including the Xinjiang attack and bombing right after President Xin Jiping left on April 30, 2014, just a day prior to the movement of the HS 981 oil rig into the South China Sea.[9] It might be also a response to pressure from the military junta, who seem unsatisfied with the significantly increasing military budget over the past years. The national defense expenditure in 2014 is anticipated to reach USD 131.5 billion (an increase of 12.2% over 2013), or even a response to pressure from oil corporations who want to expand their business in the seas with commercial potential which belong to other coastal nations. Anchoring the oil rig also aims to intimidate countries in the region, first and foremost Vietnam, not to follow the Philippines’ decision to bring disputes to the International Tribunal for the Law of the Sea. Unfortunately for China, the Philippines’ profile was submitted on time (March 30, 2014) and was accepted by the tribunal. The HS-981 oil rig case is a conflict between Vietnam and China but actually is a step in the struggle between China and the US to find allies and satellites in and then control the South China Sea. This strategy has never changed in China’s policy and was demonstrated clearly in the statement of China’s Foreign Minster Yang Jiechi during the ASEAN Summit 2010 in Hanoi “China is a big country and other countries are small countries and that’s just a fact”.[10]

Choose the right time

China has been well-known as a master in choosing right time for strategic decisions. There were several favorable events in April and May 2014. The first one was the Chinese National Security Commission Meeting in which the concept of “national security with Chinese characteristics” was adopted. Another event was the visit by President Obama that provided an excuse for China to react in order to stop the enthusiasm wave spreading widely in the region as well as prove that the US’s support is just rhetoric words in case of regional conflict. Thirdly, the instability of Ukraine distracted the US and EU. Russia has been still isolated and needs support from China, which cast an abstention vote on the UN Security Council Resolution on Crimea issue. Russia and China declared their joint military exercise in the East China Sea, just a day prior to the deployment of the HS 981 oil rig. From May 20-21, 2014, President Putin paid an official visit to China, with a gas procurement deal worth USD 400 billion, and stated that now the two countries are enjoying the best stage in bilateral relations. A coalition between China and Russia is emerging, challenging the US’s interests.

This time ASEAN is still occupied by its own matters. Malaysia is still stuck with MH 370 incident, election has not come to an end in Indonesia, and a political crisis has hit Thailand. It is indeed difficult for ASEAN to reach a highest consensus in the ASEAN Summit on May 10, 2014, under the pressure from China, thus the scenario of being unable to issue a joint statement, as in 2012, could happen again. After not a short time of stability since the visit by Foreign Minster Wang Yi and Premier Li Keqiang in 2013, the Southeast Asian nations are shocked again although they have known well the “cabbage” strategy and “salami tactics” of China, especially since 2009. May is also the starting time of a ban on fishing in the South China Sea imposed by China since 1998, that still being insufficient in preventing fishing activities of Vietnamese or Filipino fishermen in their waters. Moving the oil rig into the South China Sea, China aimed at enhancing its presence, repelling fishermen and also restraining “harassing fishing vessels” of the related parties, which can obstruct the operation of the oil rig. China also chose the right time when Vietnam was holding the ninth plenum of the 11^th Communist Party of Vietnam Central Committee and celebrating the 60^th anniversary of Dien Bien Phu victory, in which the assistance and support of Chinese people was also highlighted, and lacking precaution against China.

Choose the rival

Besides Japan in the East China Sea and the Philippines over Scarborough, Vietnam has emerged as a direct rival confronting China in the region. As proved by history, a strong Vietnam, which is out of China’s control, has never been favorable in China’s policy. The recent signals showing that Vietnam’s economy is overcoming depression and the bilateral relations with the US have been promoted to a comprehensive partnership, have made China unhappy without doubt. China did not choose the Philippines as this country is a long-time ally of the US and has just signed an agreement on military cooperation for a period of 10 years, in which the Philippines let the US use its military bases. Therefore, an over-red line action can provoke unfavorable response from the US. Moreover, the Philippines is suing China in the International Arbitration, so if China undertakes wrongdoings against the Philippines, it will be inevitably seen as a mean actor in the international stage. That may push the International Arbitration to stand up for the Philippines. For the above-said reasons, deploying the oil rig into Vietnam’s waters would give a warning for Vietnam not to exhort the Philippines in pursuing a case against China, force Vietnam to choose Beijing or Washington and accept the offer of removal of disputes for joint exploitation. Testing Vietnam’s mettle, China can easily control the other ASEAN nations. It is Vietnam, not the Philippines, that has always been a well-matched rival blocking the extension of China to the South, both in the past and present. Aiming at Vietnam, China might wake up the whole world about its determination and consistence to the “cow tongue” claim, even if necessary, it can disregard the ideological ties or traditional warm relations already established between the two countries. Vietnam’s self-restraint in similar incidents, including the recent attacks on fishermen or the cut of underground telecom cables in the past, makes up a China’s thought that Vietnam would continue to be calm down, too scared to respond these aggressive violations. This consideration was further encouraged when looking at the Vietnamese economy. In 2012, the total two-way volume of Vietnamese-Sino trade reached USD 41.18 billion, in which Vietnam’s export was close to USD 12.4 billion while its import was around USD 28.8 billion. In 2013, the total trade volume of Vietnam with the whole world attained an impressive number of USD 264.26 billion, in which the one with China alone reached USD 50.21 billion, up 22 percent in comparison with 2012. Vietnam’s export to China in 2013 was USD 13.3 billion, making up 10 percent of total export while its import from China was USD 36.9 billion, 28.1 percent of the total imports.[11] China has also invested in various important infrastructure and energy projects in Vietnam. The unofficial cross-border trade also inclined favorably to the Chinese side. Therefore, it seems that China is holding significant economic means to put pressure on Vietnam and able to easily hit this country’s economy, in case of lack of support from the US and ASEAN, thus forcing Vietnam back to its control.

Choose the position

The way China chose the position for operating this drilling oil rig, which is located 17 nautical miles from Tri Ton Islet, aims at reaffirming its stated baseline in 1996 as well as the claim over the status of this rock, along with other features in Xisha archipelago (Paracels - or Hoang Sa, of Vietnam’s territory), and the rock’s right to have a 200-nautical mile EEZ and continental shelf. This position also consolidates China’s claim that the Xisha is totally under indisputable China’s territory. If China chose the position within the arch of 12 nautical miles, people would consider that the country asserted only the claim over the status of territorial waters for the islands which they have occupied illegally since 1974 by force. This position is also located near Hainan island, so they can deploy an enormous navy and maritime enforcement force, as well as fishing boats, to protect the oil rig. In case commercial oil found, it can be transported via a shorter oil pipeline transportation system to Xinsha or Hainan. It is easier for China to establish and protect this system than a similar one going deep in Vietnam’s waters. This position is also near block 119 that Exxon and the US undertook exploration drills, thus China can put enough pressure on the US companies, but still avoid confrontation with the US. Only Vietnam and China are involved in dispute in this area, so Beijing hoped that ASEAN, with its tradition of neutrality and no interference in other countries’ domestic issues, would not find out any reasons to engage. This position would not cause any major impacts to the bustling shipping line in the South China Sea, thus easily rejecting any international concern. On May 27, 2014, the oil rig was moved to the co-ordinate of 15°33’38” North latitude and 111°34’62” East longitude, 25 nautical miles east-southeast of Tri Ton Islet, 23 nautical miles east-northeast from the previous location and 150 nautical miles from Ly Son Island.[12] Both locations are well within the EEZ and continental shelf of Vietnam.

Choose the tactics

There are two tactically significant points. First, China used cleverly the civil force or disguised civil force and conducted civil and economic activities, avoiding military provocation that can raise international concern. This tactic can be called as replacing “grey ship” (navy) by “white ship” (civil) to deal with maritime enforcement teams of neighbors. This tactic proved to be useful in expelling Filipino fishing boats in Scarborough. Second, they deployed a movable oil rig instead of a fixed one. That allows them to place the oil rig in the targeted position in a short time, making the other side completely unexpected and unable to react; even the outside actors also cannot carry out any interference if necessary. The opponent was also given not enough time to arrange other long-term measures, such as using legal tools, due to the fact that it is not a short time to prepare an international case. It took one year to establish a court, prepare MOU and complete necessary procedures since the time when the Philippines applied for a case against China after the Scarborough incident in February 2013, and the Court can handle the case at the soonest by December 15, 2014.[13] During this period, the CNOOC may purposely move the oil rig to other positions, thus stripping the mandate of the court due to withdrawal of the object. China also mobilized a huge number of fishing boats to prevent, or even undertake provocative attacks, the enforcement forces of its neighboring countries, thus creating a stick to beat by its “grey ships”. As history proved, the Chinese fishing boats were always the pioneer force in provoking conflicts in Da Nang in 1962, the Paracels in 1974 and Scarborough in 2012. Deploying a oil rig in the North came in parallel with expanding Johnson South Reef in the South as the tactic of making a sound in the east, then striking in the west, thus distracting attention of the opponent as well as international community.

However, plots do not always match reality.

China lost its political reputation, Vietnam was impacted economically

For China, there are six comments as follows:

Firstly, what Beijing tried to avoid most is to internationalize the South China Sea issue. Its attitude of aggressiveness, provocation and disregard of international law, causing instability in the region, raised concern from all over the world. The South China Sea issue, to a certain aspect, attracted more attention than the Ukrainian conflict in international media. The US’s State Secretary called it provocative activities. US Vice President Joe Biden, in the meeting with the Chinese military chief of staff, emphasized that the US would never take side with any country taking provocative steps to assert its claim in the disputed area that undermine stability and peace. President Obama stated: “Regional aggression that goes unchecked, whether in southern Ukraine or the South China Sea or anywhere else in the world, will ultimately impact our allies, and could draw in our military. We can’t ignore what happens beyond our boundaries.”[14] Singaporean Prime Minister Lee Hsien Loong urged ASEAN to express common views on the South China Sea as the “conflicts have happened right at our gate.”[15] Indonesian Foreign Minister Marty Natalegawa confirmed that China must respect its commitment to the Declaration on the Conduct of Parties in the South China Sea (DOC). According to him, Beijing wants to resolve the South China Sea disputes on a bilateral basis and does not want to have the participation of a third party. However, its illegal deployment of the HD-981 oil rig in Vietnam’s waters is not a bilateral issue but an issue of the region, so ASEAN has “special responsibility” to ensure that both parties will enter into a dialogue to resolve the situation.[16] Even in Taiwan, former chairman of the Democratic Progressive Party, Su Tseng Chang, also commented that Beijing’s activities caused serious conflict in the sea. In general, the international response and concerns seem to display much stronger than in the Scaborough incident, forcing China to think twice.[17]

Secondly, contrary to Beijing’s calculation, ASEAN showed its strength of solidarity by referring, with consensus, to the South China Sea issue in the block’s Summit documents (including the Nay Pi Taw Declaration and the Chairman’s Statement in May 2014). A separate statement of the ASEAN Foreign Ministers on the South China Sea was also released after 19 years since the Mischief Reef incident in 1995. ASEAN has obviously more matured since 2012, when China still had opportunity to corner. Peace, security, safety and freedom of navigation, removal of threat or use of force in solving disputes, compliance with international law, UNCLOS, DOC and early conclusion of COC always serve as the ASEAN lodestar.

Thirdly, it is Beijing’s reaction against the US’s Asia Pivot Strategy. However, with this recent conduct, Beijing more and more caused mistrust from the regional nations, thus forcing them to align with the US and its allies. The region has witnessed shuttle diplomatic maneuvers, including the visit to Manila by Vietnam’s Prime Minster Nguyen Tan Dung or the official visit to Japan by Malaysia’s Prime Minister Najib Tun Razak from May 22-24. The more aggression China shows, the greater isolation it will suffer. That also facilitates the “Asia Pivot” of the US in the future. What China took great pains to build up as “peaceful rise” and “sentiment attack” will be wiped out totally by the shadow of navy ship threat or Chinese danger in East Asia and South East Asia.

Fourthly, it is Beijing’s plan to use the external issue to handle its domestic problems. Yet, the regional instability and concerns over real intentions of Beijing have undermined the international climate for sustainable economic development and national stability of China. Amidst the days of operating the oil rig in the sea, a new gun attack in Xinjiang market led China to launch a new counter terrorism campaign till next year. The internal division in this giant has not been settled down, if not deepened further. The country’s economy was also impacted with the decline of Hang Sheng Index to 13 percent, being the most decreased index in the world in May. The Chinese currency, renminbi, also felt down 2.8 percent against USD and plunged to the lowest point since October 2012.[18]

Fifthly, Beijing always requests to solve disputes through bilateral negotiations. Hanoi contacted more than 30 times within a month with Beijing calling for talks but just received silence from China. It is obvious that Beijing only thinks about its “core interests”, ignoring DOC, COC and international law. Even in the bilateral framework, China showed reluctance to resolve by peaceful means, so it is believable that its proposals were merely a fine allusion.

Sixthly, it is Beijing’s plot to force Hanoi to say goodbye to Washington, thus falling into Beijing’s controlled orbit. The oil rig movement drove Vietnam into a corner, so the country must respond quickly, consistently and determinedly in order to protect its legitimate interests according to the UNCLOS. Vietnam’s Prime Minister self-confidently stated that “Vietnam will resolutely defend its sovereignty and legitimate interests because territorial sovereignty, including sovereignty on its maritime zones and islands, is sacred. We always want peace and friendship but this must ensure independence, self-reliance, sovereignty, territorial integrity, and maritime zones. These are sacred and we will never trade them off for some kind of elusive, dependent peace and friendship.”[19] China deployed a 5-6 times bigger force of vessels to attack and oppose Vietnam but has never forced Vietnamese ships to leave their positions. On the contrary, it reflected China as a bully in the eye of the international community. China has never expected its reputation undermined since other countries join the Philippines in the case against China in the international court, but now Vietnam must consider various self-defense options, including the legal means. The fact that lots of countries want to sue China will raise a question on why a country that always calls for peace was mistrusted by so many others. It is indeed an opportunity for Vietnam to re-heat its territory claim over the Paracels, which was denied to negotiate by Beijing. The demonstrations showing the patriotism of the Vietnamese people broke out not only in Vietnam but over the world. Vietnam has won the support of its people and the world community. China accused wrongly and withdrew Chinese workers from Vietnam but could not affect Vietnam’s economy, which has been still stable so far. Vietnam remains one of the top investment destinations in the world. The fact is that China underestimated Vietnamese determination. However, the relationship between the two countries, which has been unceasingly consolidated since the normalization of the diplomatic ties in 1991, is now facing serious challenges.

For Vietnam, the incident hit hard Vietnam’s stock and gold markets. Two shocks happening on May 8 and 15 were the worst in Vietnam’s infant stock market, making tens of thousands billions dong evaporate in few days, even within 11 minutes on May 15, 2014.[20] The gold price rocketed and flustered investors. These were direct consequences of the situation in the South China Sea, as well as incidents burst out in Binh Duong, Dong Nai, Ha Tinh during the 13^th and 14^th days of May 2014. Thousands of Chinese workers were evacuated to their country and around 60,000 Vietnamese labors affected badly. Various flights and tourism tours by the Chinese were cancelled. The total FDI capital for new and expanded projects has merely reached the number of USD 5.5 billion, accounting for 65.7 percent of the figure of the same period last year.[21] However, thanks to the determined and enlightened leadership of the Government, the storm in the mainland caused by the South China Sea incident was absolutely blocked, contributing to stabilizing the economic climate and gaining back investors’ trust. This incident has brought a real good opportunity for Vietnam to review its economic policy and reconstruct the economy for its less dependence on China.

Solution to the conflict

It seems that all international conflicts come to a common ending, based on the balance of power and as a combination of five factors: politics, diplomacy, military power, economics and public media. Considering the economic scale, military force and public media system, Vietnam is hardly compared to China. However, if a small country uses appropriately its synergy extracted from the great national unity as well as international support, it could be a thorny opponent to the big guys. China is not an exception, especially in fighting with a resilient nation who has known everything about the rival and is willing to sacrifice like Vietnam. War can make the “China’s dream” a bubble and provide room for third party’s interference. Vietnam’s geographical position might make it easily hurt by a lightning attack; however, it is also considered an “unsinkable aircraft carrier” that blocks almost the length of the energy and goods transportation line of China. Applying guerilla warfare and waging a protracted resistance war always display Vietnam’s strength. However, a military self-defense would be only the last resort when the territorial sovereignty was violated. War is always hard, for both sides, especially for innocent people, and will soak the whole region in a condition of instability and disorder. That’s why the stance of self-restraint, eliminating the use of force, resolving disputes through peaceful manners always receive applause and support from regional and international countries. The self-restraint of Vietnam’s Maritime Police and Fisheries Resources Surveillance Force over the attack and water cannon shots of China is not only for Vietnam’s interests, but also for the sake of peace, stability and development of the whole region and the world. China acknowledges well that an adventure outside the red line will become a war, thus this scenario hardly happens. However, a threat of sudden and limited military attack aiming at changing the status quo is still latent.

On the international political chessboard, in a world getting increasingly flatter, the countries need one another badly, toward building a stable friendship. Vietnam’s position is reflected clearly by its high-level leaders’ statement that Vietnam will apply necessary measures to protect its legitimate rights and interests. At the same time, Vietnam shows its good will and persistence to settle differences through negotiations, dialogue and other peaceful means in line with the common knowledge of the two countries’ senior leaders, the agreement on basic principles guiding the settlement of sea-related issues in conformity with international law and practices, including the 1982 UNCLOS, not allowing this issue to hinder political trust and cooperation between the two countries.

According to Article 33 of the United Nations Charter, peaceful means range from negotiation, mediation, international mechanism to other legal means. Vietnam has been consistently suggesting negotiation and informing the tension in the South China Sea to the UN, ASEAN, Non-Aligned Movement and other countries and received proposals to be mediator from Indonesia and Russia. In this connection, Indonesia is a neutral country that has played the leading role and has an important voice in ASEAN. Moreover, it was the mediator in Vietnam - Cambodian issue in 1991 and most recently, in 2012, when ASEAN was in threat of division as failing to issue a joint statement for the first time, it was the Indonesian Foreign Minister who rescued this block by a 6-point initiative. The mediation role of Indonesia also complies with ASEAN’s policy in resolving regional disputes without any outside intervention. In addition, a surveilance and reconciliation board based on the suggestion of the UN is another option. Despite lack of binding decisions, this kind of board can also make recommendations, in combination with international public opinions, thus being able to shape a resolution. Vietnam can also choose the legal means at a necessary point of time, if the other measures do not work.

In the field, the tactic of “mouses playing with cats” conducted by the Vietnamese Maritime Police and Fisheries Resources Surveillance Force cost China millions of USD each day for operating the oil rig and deploying more than 130 escort vessels. The propaganda work, both inside or outside the border, in combination with strong and effective diplomatic reactions, will help shape the public opinion toward a better understanding of the legitimate interests of a coastal state and unacceptable activities in international relations. The synergy in the field and of diplomatic, legal, economic, public media maneuvers, in combination with the balance of power in politics, will certainly lead to the movement of the HS 981 drilling oil rig. After the HS 981 incident, the resistance for sovereignty in the South China Sea will still continue.-