Let me thank Rear Admiral Bock and Dr Wang for your welcome address, and I want to congratulate your organisation, the CCG (Center for China and Globalisation), for co-hosting this organisation. I think it is a plus for a think-tank from China to engage in international affairs. So, congratulations and I hope you do more of it. Thank you Dr Hayton for framing the issue.
Let me just start by saying that the South China Sea (SCS) dispute over islands or maritime features and resources are not sui generis. I cite within ASEAN that we have had as well. So mea culpa, my country Singapore and Malaysia had a dispute over ownership of what is called Pedra Branca island. If you come to Singapore, you might see it, it is small, 24 nautical miles east of Singapore, and it has got two features called Middle Rocks and South Ledge. To settle this, both Singapore and Malaysia went to the International Court of Justice (ICJ) in 2003. And in a judgement worthy of Solomon, the Court ruled that Pedra Branca belonged to Singapore, Middle Rocks to Malaysia, and the South Ledge to the State in the territorial waters of which it is located. Similarly, Malaysia and Indonesia went to the ICJ over two islands in Borneo, they are called Ligitan and Sipadan. And for that, the ICJ ruled that both belonged to Malaysia.
Not all such disputes end amicably, if at all. For instance, in this part of the world, Gibraltar is still an outstanding issue between Spain and Britain. Only as recently as February last year, a Spanish warship, with its guns manned, ordered commercial ships anchored near Gibraltar to leave, and the British Royal Navy had in response deployed a vessel to the scene. In some cases, serious consequences can ensue, even war. And in our lifetime and memory, we remember the over 10-week undeclared war in 1982, where Britain and Argentina fought over the Falkland Islands and its dependencies.
What trajectory will the SCS dispute take? That is an important issue I think, as the Chairman, Mr Bill Hayton, has framed, because the SCS is not just like any basin of water or a local dispute between countries. The SCS is like the Mediterranean Sea, with many littoral states and vital sea lines of communication. Unfortunately, the SCS dispute has become even more complex, involving extra-regional countries and many other elements- geopolitics, nationalism, resource competition, history, economic pressures, alliances - and quite beyond the simple question of adherence to international rules and norms, or settlements of disputes by peaceful means. I think it is right for the international community to be involved in the SCS dispute because there are matters of principles, as Mr Hayton has said.
Quo vadis, where do we take it from here? I think as leaders, we have to deal with the situation at hand and agree on a workable roadmap to avoid conflict. And the question is asked - what might such a productive, or at least de-escalatory, roadmap look like?
I thought, to answer the question, first I would like to calibrate the parameters and expectations for the SCS: On one extreme, complete resolution on the SCS dispute in the near future, I think, could be well-impossible, especially on issues of sovereignty. There are powerful nationalist sentiments domestically that make it very difficult for national leaders to make concessions without being perceived as compromising on national sovereignty, or even to bring the dispute to international arbitration and risk losing. I don't think this is what will happen between us and Malaysia, or Malaysia and Indonesia. Indeed, this was the case after the Philippines unilaterally initiated arbitration proceedings in the Permanent Court of Arbitration.
At the other extreme, the status quo remains - the presence of civilian and military facilities on the disputed features and islands. No one thinks it likely for any physical measures of force to be used against incumbents. It would not be possible to do so without triggering a conflict; I think the justification is questionable, the cost too high, and the returns debatable.
So within these two extremes, the main issues to be resolved can be brought into sharper focus for conflict prevention, if not resolution. And I think these areas can be broken down from hard to harder issues to tackle, and parties can pursue multiple tracks to alleviate tensions on multiple fronts.
First, upholding freedom of navigation despite conflicting and overlapping claims. All sides must allow freedom of navigation for both the commercial and the military. This means not only unimpeded rights of passage, but also military training in international waters including the Exclusive Economic Zones (EEZs), in compliance with UNCLOS. The 2016 Arbitral Tribunal ruling held that none of the Spratly Islands is capable of generating extended maritime zones, in other words, irrespective of who owns any of these features , ships and aircraft, both commercial and military, ought to be able to operate in the region in a manner consistent with the rules of UNCLOS.
Second, exploring resource-sharing mechanisms such as for fisheries and hydrocarbons. Let me talk about fisheries - we should not underestimate the potential fallout over the common fish on our dinner tables. My staff did a tally of the 43 incidents involving fishing vessels in the SCS over the last five years. 43 incidents: 18 had a vessel ram another, and in 10, shots were fired, and at least one vessel sank in eight cases. Much more than military conflicts - just over the common fish. Fishery disputes can precipitate larger conflicts as competing agencies enforce their putative rights. I would therefore put fisheries agreements or consensus as a priority. It may take time, but it can and has been done. Japan and Taiwan took 17 years to negotiate a civil fisheries agreement in 2013. In 2015, the Philippines and Taiwan signed a fisheries agreement.
Let me turn to hydrocarbons. With at least 190 trillion cubic feet of natural gas and 11 billion barrels of oil estimated in SCS reserves, we begin to understand what the dispute can be about. It will be the biggest pay-off, but unlocking this resource requires large capital investments over long gestational periods. Here, it makes sense to multi-lateralise hydrocarbon projects in the SCS across multiple partners, with a view to share the costs and dividends in win-win arrangements without prejudice to sovereignty.
These focus areas can be worked on to promote mutual benefits without prejudice to competing claims of ownership. In the meantime, our defence establishments within ASEAN have worked on areas in which we facilitated de-escalation and common understanding, and we practice CUES, for example, Code for Unplanned Encounters at Sea and in 2019, 18 ships from ASEAN member states and the Plus countries, practiced CUES in an exercise. And in 2018, Singapore as ASEAN Chair developed the air counterpart of CUES, called the Guidelines for Air Military Encounters. In 2018, we also co-organised the ASEAN-China Maritime Exercise, and facilitated the ADMM's agreement to conduct the ASEAN-US Maritime Exercise in 2019. These (interactions) are to build confidence.
I'll end here and I'm happy to respond to any questions. Thank you.