Background

• Currently, among the most disputed topics in the world, in the South China Sea (SCS) dispute, the governments of six countries (Vietnam, Indonesia, Philippines, Brunei, Malaysia and China) claim that they are the rightful owner of Paracel and Spratly islands, and among them, China has been the most aggressive one. 
• The disputed sea is composed of approximately 100 to 230 islands wherein small islands called islets are usually included in it. 
• The Chinese government claims an enormous area under what is known as the “nine-dash line” that is over 2000 km long, starting from mainland China and reaching waters close to Indonesia and Malaysia. China maintains that the area has been under Chinese rule since ancient times.
• China has been building military bases on small islands and also expanding the area of islands artificially. 

Importance of the South China Sea

• This sea route, connecting Asia with Europe and Africa, is an important trade passageway for international trade. 
• The Strait of Malacca, along with the Lombok Strait and Sunda strait are all connected with SCS and responsible for oil and LNG imports by major countries such as China, Japan, Indonesia, South Korea, and others from Gulf countries.
• It is estimated that around 15 million barrels each day are transported through the Strait of Malacca, making it the second busiest strait after the Strait of Hormuz in terms of oil transportation with respect to volume. 
• The economy of China depends upon the oil import in which 80% of the oil is transported through the Strait of Malacca and then through SCS to China, which means that full control and easy access through this strait is the justification behind economic prosperity of the Chinese nation.
• Apart from the strategic importance of the SCS, this region is also blessed with large deposits of natural resources beneath the sea. 
• Aside from oil and gas reserves, this region is also gifted with one-third of the total marine biodiversity of the Earth, which means that substantial revenue can also be generated through fishing alone.

PCA award

• Following the dispute, the Philippines filed a case against China in the Permanent court of arbitration (PCA).
• In 2016, a tribunal of the PCA issued its ruling against China’s claims in the South China Sea. The tribunal’s five arbitrators ruled overwhelmingly in the Philippines’ favor after finding that China had violated the sovereign rights of the Philippines in its exclusive economic zone.
• However, China refused to participate in the arbitration and rejected the outcome. 

Why in News?

• A fresh controversy broke out recently between China and The Philippines after China installed a barricade near the South China Sea’s Scarborough Shoal. 
• Both countries have been embroiled in a tussle over the shoal’s territorial claim since 2012. The shoal was seized in 2012 by China, which has maintained a constant presence of coast guard and fishing trawlers there ever since.

Related Information

About PCA

• The Permanent Court of Arbitration was established by the Convention for the Pacific Settlement of International Disputes, concluded at The Hague in 1899 during the first Hague Peace Conference. 
• The 1899 Convention was revised at the second Hague Peace Conference in 1907.
• The PCA is not a court in the traditional sense but provides services of an arbitral tribunal to resolve disputes that arise out of international agreements between member states, international organizations or private parties.
• The cases span a range of legal issues involving territorial and maritime boundaries, sovereignty, human rights, international investment, and international and regional trade. 
• The PCA has no sitting judges: the parties themselves select the arbitrators. 
• The PCA is an official United Nations Observer. It is headquartered in The Hague, Netherlands.

Members

• The PCA has more than 120 Contracting Parties which have acceded to one or both of the PCA’s founding conventions (1899 and 1907 Conventions).
• India is a party to the PCA according to the convention of 1899.