Two years ago, Taiwan and Japan signed a fisheries agreement. It was a sign that relations between the nations were developing in the right direction, but the agreement has also become an important benchmark for resolving the problem of South China Sea territorial disputes. The US and other countries have repeatedly held up this agreement as a model for future deals. This shows that shadowy military operations cannot be used to resolve the sovereignty claims of disputed islands.
In the early 1970s, the government’s position regarding the Diaoyutai Islands (釣魚台) and the South China Sea was to advocate “putting aside disputes in the interest of common development” — a rare gesture of conciliation. However, Taiwan was unable to obtain agreement from other nations with parallel claims to the islands. It is the winner-takes-all attitude that has lead to the situation of never-ending tussles over islands and reefs in the region.
According to a 1968 report by the UN Economic and Social Council (ECOSOC) — confirmed in the following year by the UN Economic Commission for Asia and the Far East (ECAFE) — waters in close proximity to the Diaoyutais contain an abundance of oil and natural gas reserves. As for the South China Sea basin, development has already verified the existence of rich deposits of oil and natural gas. Areas near the Spratly Islands (Nansha Islands, 南沙群島) have already been developed by Vietnam, Indonesia, Malaysia, Brunei and the Philippines. Recently, the region has been cloaked in an atmosphere of conflict.
Restricted by distance and its maritime strength, it would be difficult for Taiwan to start to develop the area. Therefore, the government should consider developing oil and gas reserves close to Taiwanese waters, the best area being waters near the Diaoyutai Islands.
The Philippines has petitioned a UN tribunal. One of Manila’s charges against Beijing is that islands controlled by China, such as the Fiery Cross Reef (Yongshu Reef, 永暑礁) and Hughes Reef (Dongmen Reef, 東門礁), are fringing reefs and, as such, cannot be classified as belonging to any nation’s exclusive economic zone.
The UN Convention on the Law of the Sea, Article 121, says: “Rocks which cannot sustain human habitation or economic life of their own shall have no exclusive economic zone or continental shelf.”
If the tribunal were to rule in accordance with Article 121, this could effectively resolve disputes in the South China Sea. Taking the Diaoyutais as an example, if they are determined by the tribunal to be fringing reefs, then the Diaoyutai chain might only provide rights to 12 nautical miles (22.2km) of sovereign water, as opposed to a 200 nautical mile exclusive economic zone. This would mean that waters outside the 12 nautical mile zone would be available for common development — something worth thinking about.
The block on exploiting natural resources near the Diaoyutai Islands — due to many years of disputes — is extremely unfortunate. Waters around the island chain could be split between north and south. The sea to the north of the islands is made up of the overlapping territorial waters of Taiwan, China and Japan; and to the south, Taiwan and Japan. To simplify the problem, consider only the area to the south of the Diaoyutai Islands and north of Japan’s Yaeyama Islands. This area falls within the scope of the Taiwan-Japan fisheries cooperation agreement and functions as a joint-development area.
The stretch of water also marks the midway point between the coastal waters of the two nations. In the absence of a formal sea border, turning this stretch of water into an area for joint development and cooperation has its advantages. The important thing is that future scope for exploration of natural resources would not have to include the Diaoyutais themselves. It would be possible to put aside the dispute and allow joint development of the surrounding area, thereby preventing the dispute from impacting the common will of the two sides.
Oil and gas exploration cooperation between Taiwan and Japan could use the Gulf of Thailand joint development agreement, signed by Malaysia and Thailand in 1979, as a model. Much experience can be drawn from the agreement, which has been in place for more than 30 years and is proof of a successful pact. The agreement is based on the principles of equal sovereign rights and shared profits and would serve as an invaluable reference for any agreement between Taiwan and Japan.
In recent years, the economy has stagnated and the nation has faced difficulties entering into free-trade agreements. The government should open up a path for the development of off-shore oil and gas as a strategy for economic development.
Since Taiwan and Japan have been able to reach a common agreement on fishing in the area surrounding the Diaoyutais, what is to prevent them from carrying out joint energy development in the same area? If an agreement could be reached, that would likely be to Taiwan’s advantage. Indonesia, Malaysia and Brunei are already important exporters of natural gas, and even Vietnam is an oil exporter, while the Philippines produces enough natural gas to be self-sufficient. This shows that nations that dare to develop oil and gas reserves reap significant rewards.
By contrast, the government has been far too conservative in this respect. At a time when Taiwan is under attack from the combined East Asian economies, failure to open up a new economic strategic front will result in further hardship. Hopefully, officials have the backbone to take up the challenge, learn from Taiwan’s neighbors, develop the nation’s offshore natural resources and potentially lift the nation out of the economic doldrums.
Chen Hurng-yu is a professor in the Graduate Institute of Asian Studies at Tamkang University.
Translated by Edward Jones
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