ASPI Conference on maritime confidence building measures in the South China Sea

Speech, E&OE, (check against delivery)

12 August 2013


The issues before this conference are important ones for Australia’s strategic policy.

Australia has no deeper national interest than helping to ensure that the great success story of our century — the economic transformation of Asia in the Asian Century.

And that means avoiding incidents and increases in tensions that can result in conflict, including in the South China Sea.

For Australia and the region, the stakes couldn’t be higher.

I congratulate the Australian Strategic Policy Institute on this initiative.

I welcome all the distinguished speakers and guests.

Together you represent the expertise and, I may say, the best aspirations of the nations of the East Asia Summit.

In the keynote speaker who will follow me, Professor Hasjim Djalal from Indonesia, we have someone whose long-term interest and involvement in these issues is unsurpassed, notably through the Workshop Process on Managing Potential Conflict in the South China Sea, since 1990.

A conference like this has a double importance and purpose.

Significant in itself, it can become part of the process of the avoidance of conflict.

The disputes arising in the South China Sea involve complex questions of history, territory claims, and competition for resources, national measures and international law.

In our approach, the overriding needs are foresight, awareness, knowledge and understanding.

In presenting paths along these lines, this conference can become part of the solution.

I state Australia’s position at the outset: We do not take a position on any of the competing claims, but our interest in their peaceful settlement could hardly be more direct.

We are a maritime nation as our very condition of our existence.

More than 90 per cent of our merchandise trade goes and comes by sea.

Two thirds of it moves across the South China and East China Seas.

Our continuing objective is to maintain and strengthen the peace and stability of the region based on international law.

The Australian perspective today encompasses the most dynamic region in the world — the vast region of the Pacific and Indian Oceans.

The Indo-Pacific represents the centre of gravity of Australia’s economic and strategic interests.

It includes nine of our top trading partners.

By thinking in Indo-Pacific terms, we embrace our largest trading partner, China, our long established partnership with Japan, and our key strategic ally the United States, while reinforcing India’s role as a strategic partner for Australia.

It brings in the big growth economies of South Korea and Vietnam, and the trade and diplomatic weight of ASEAN, with Indonesia at the centre.

Thinking in Indo-Pacific terms benefits the world’s only nation surrounded by both these great oceans.

Yet it has been a long time coming.

When we remember our preoccupations of barely 40 years ago, the Indo-Pacific concept represents a revolution, and I believe, a liberation in our strategic thinking.

We have come to mature terms with our place in Asia.

So Australia has become familiar with the need for new ways of looking at the region and the world.

Our capacity for new thinking has grown through the work of Australian organisations represented in this room.

As well as this institute, we draw on the Australian National Centre for Ocean Resources and Security at Wollongong University, the Royal Australian Navy’s Sea Power Centre and the Australian Hydrographic Service.

So, in matters of maritime governance, we are well equipped for new thinking, fresh approaches, better ways of anticipating and averting conflict.

And for sharing ideas with the region.

But it is for the nations of the region themselves that we can best draw examples and explanations.

The concept of joint development zones for fair and mutual development of resources, where territorial and maritime claims may overlap, flourishes in the region.

The concept is provided in the United Nations Conventions on the law of the sea — “the Constitution for the Oceans”, as we see it.

In our region, Malaysia, Thailand and Vietnam have long been participants in joint development zones.

Australia and Timor-Leste are also jointly developing Timor Sea petroleum resources.

They are arrangements that have benefitted the countries involved.

Directly relevant to South China Sea disputes, as Foreign Minister I’ve observed and encouraged the lead taken by ASEAN to develop with China a Code of Conduct for the handling and management of disputes.

There is now an agreement between ASEAN and China to hold formal consultations on a code of conduct.

This is something Australia welcomes.

Consultation in itself can be part of the confidence building process by opening the dialogue and keeping it going.

But we have also encouraged — and will continue to encourage — ASEAN countries and China to begin formal negotiations on a substantive code of conduct.

Apart from the obvious benefits from a code of conduct, discussions on it can help clarify countries’ attitudes to confidence building measures (CBMs).

As Rory Medcalf and Raoul Heinrichs paint in their paper Crisis and Confidence: Major Powers and Maritime Security in Indo-Pacific Asia (2011):

“A major obstacle to progress of effective maritime CBMs is the clash of views about the value and purpose of such instruments, particularly between the dominant strains of policy thinking in Beijing on one side and the United States, its allies and partners on the other.” (pg4)

Medcalf and Heinrichs note:

“The prevailing view in Beijing is that strategic “trust” should precede major advances in maritime diplomacy. In Washington and elsewhere the standard view is that CBMs are needed precisely when trust is absent.”

If this correctly states the crux of the problem, it seems to me to open an ample field for the endeavours of Australian and like-minded countries in ASEAN.

For if the argument is to boil down, not so much to trust, but to the order of precedence of trust and compliance, which countries are better placed to help build both trust and confidence, hand in hand, step by step?

Australia in particular, given the depth of our relationship with the United States, China and Japan.

At the highest level of this issue, I believe that we can usefully apply the view I have often stated about the avoidance of conflict over specific, overlapping and competing territorial and maritime claims in the South China Sea and elsewhere:

That to make progress, it can often be better for the parties directly involved to agree to disagree in advance.

That instead of immovable positions on who owns what, rather to focus on how all parties can benefit from cooperative programs, confidence building measures and continuing dialogue.

As I said before, the stakes couldn’t be higher.

It’s true that the great danger is an irreversible crisis sparked by accident or miscalculation.

We would have no excuse for sleep walking our way into unintended conflict.

Let us make sure the story of spectacular growth and transformation of our region is not compromised by any prospect of newspaper headlines reporting conflict in the South China Sea.

This is something that we all need to work at.

We can make a modest contribution to this cause at this conference.

Media enquiries