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On Cooperation in Joint Development

On cooperation in joint development in international law and realities (Chapter II)

In international realities, there are a lot of agreements relating to the establishment of the areas of the joint exploitation in the sea.

REALITIES OF JOINT DEVELOPMENT IN THE WORLD

This Chapter shall analyze a number of realities typical for cooperation in the joint development in the world and in the Southeast Asian region in accordance with three categories: the joint development in the sea waters or on the overlapping continental shelf  can be regarded as a temporary measure in the process of searching for a final measure for the marine delimitation; the joint development in the boundary already determined as the form added to the exercise of the national sovereignty in the sea and the management of the marine delimitation; and the multilateral joint development.

I. A NUMBER OF REALITIES OF COOPERATION IN JOINT DEVELOPMENT IN SEA WATERS OR OVERLAPPING CONTINENTAL SHELF

1. The Agreement on the Joint Development between Japan and the Republic of Korea in 1974

The Agreement relating to the joint exploitation in the southern part of the contiguous continental shelf between Japan and the Republic of Korea was signed in 1974. Earlier, the two countries had agreed to the boundary dividing the continental shelf in the Japanese sea waters and Tsushima Strait. As far as the continental shelf part in the South of the East China Sea is concerned, there is a considerable difference in the two countries’ viewpoint to such an extent that the two sides cannot be able to reconcile to each other. Japan’s viewpoint is based on the principle of the median line, while South Korean which based itself on the theoretical basis of the natural lengthening of land claimed that the continental shelf should be expanded outside the supposed median line between the two countries.

Photo: Illustration

The dispute had been rising when the Republic of Korea had licensed the concession to some foreign oil and gas companies to explore the continental shelf within the Hoàng Hải Sea (the Yellow Sea) and the East China Sea on the basis of the law on development of the under-the-sea-bed resources promulgated on January 1, 1970. The Southern part of the concession area had extended beyond the supposed median line, thus creating the overlapping of a number of areas where the concession had been licensed by the Japanese Government.

To avoid a conflict, the two countries had signed an Agreement on the joint exploitation on January 30, 1977 in the disputed area. The fundamental spirit of this Agreement is to temporarily shelf the dispute and regard the overlapping area is the area for the joint exploitation and the “joint development area shall not jeopardize the claims of the parties concerned in delimiting the continental shelf” (Article 28 of the Agreement). This joint development area had an area of 240,092 square miles and was divided into 09 sub-areas. Each sub-area was exploited cooperatively by the companies of the two states. A joint commission was set up with 04 members appointed by the two governments with each side having two members (Article 24) with a view to supervising all the activities in the joint development area. This Agreement took effect since 1978 and will end after 50 years.

2. The Grey Zone Agreement between Norway and the former Soviet Union in 1978

“The Grey Zone Agreement” between Norway and the former Soviet Union was signed in 1978 to set up the common zone for fishing sea products with an area of 67,500 square kilometers in the South of the Barent Sea. According to this Agreement, the total quantity of the catch of assorted fish in the zone was decided by the Mixed Fishing Commission of Norway and the Soviet Union; after that this quantity was divided evenly for each signing party. The Agreement also includes a lot of other clauses that adjust the criteria for the sizes of fish and fishing nets for catching. Even though the time limit of the Agreement is 1 year, this is to be considered for addition and extension every year until the two sides are able to reach an agreement on the boundary of the continental shelf or the exclusive economic zone (Rainer Lagoni: Interim measures pending maritime delimitation agreements, 78 AJIL, 345 – 1984).

3. The Memorandum of Understanding between Malaysia and Thailand in 1979

On February 21, 1979, Malaysia and Thailand signed the Memorandum of Understanding on the establishment of the joint power body to exploit the under-the-sea-bed resources within the continental shelf already determined in the Gulf of Thailand. This joint exploitation zone between the two countries was created by the claimed boundary expressed by Thailand in the 1973 declaration and the claimed boundary issued by Malaysia in 1979 with an area of 2,750 square kilometers.

The joint power body was set up to operate and manage all the activities in the joint exploitation zone. This body is entitled to suggest the transfer of the right to explore and exploit the natural resources in the joint exploitation zone in the form of production sharing contract; to supervise the management and operation of the exploration and exploitation of oil and gas; to collect tax and other profits from the oil and gas resources in the zone.

In case when there is an oil field being expanded outside the joint exploitation zone, the two sides are held responsible to keep each other informed and will together find the way to resolve the issue in such a way as to be able to exploit it in the most effective manner and without impacting the benefits of each side (Nguyễn Bá Diến: Cooperation in Joint Exploitation in International Law of the Sea, Ibid, p. 257, 258)

4. The Treaty on Joint Development between Australia and Indonesia in 1989

The Treaty on the cooperation zone in the region between East Timor province of Indonesia and Northern Australia was signed on December 11, 1989. Before that in early 1970, Australia and Indonesia had signed two agreements on delimitating the continental shelf, one in the Australian sea waters and the other in the offshore of East Timor. However, the two countries were yet to reach any agreement on delimitation of the sea in the East Timor region, because each is persistent to keep their own viewpoint in the delimitation: Australia bases itself on the doctrine on the natural expansion of land territory to the sea, while Indonesia holds that the principle of the median line should be applied. Also in this period of time, a promising oil field was discovered 200 km away from the culvert to the West. This had urged the two countries to shelf temporarily the dispute so as to come to the signing of an agreement on the establishment of the Zone of Cooperation. Until today, this Agreement is considered as the most detailed agreement on the joint exploitation (it comprises 34 articles and 04 annexes – Text of the Timor Gap Zone of Cooperation Treaty between Australia and Indonesia, agreed on December 6, 1989)

According to the Treaty, the cooperation zone is divided into three smaller zones: Zone A, Zone B and Zone C. Zone A lies in the middle, Zone B lies near Australia and Zone C lies near Indonesia. That Zone B and Zone C are put under the management of Australia and Indonesia is the typical characteristic of the agreement on the joint exploitation of the kind. All the oil and gas activities in Zone B and Zone C shall be adjusted by the relevant laws of Australia and Indonesia.

According to this Treaty, the boundary in the North of the cooperation zone is the culvert of the gap zone of Timor; whereas, the boundary in the South of the zone coincides with the boundary outside the exclusive economic zone of Timor; the boundary between Zone A and Zone B is the isobath of 1,500 meters; the boundary between Zone B and Zone C is again the median line between East Timor and Australia.

So, both the Timor culvert and the median line are used to set up the joint cooperation zone with the aim of reconciling Australia’s viewpoint of expanding its land territory with Indonesia’s principle of median line. The Treaty took effect within 40 years and when this duration expires, it is possible to extend to further 20 years until the two states reach an agreement on the perpetual boundary (Article 33 of the Treaty).

5/ The Memorandum of Understanding on Exploration and Exploitation of Oil and Gas in the yet-to-be-determined Continental Shelf between Vietnam and Malaysia in 1992

There still existed between Vietnam and Malaysia an overlapping zone on the continental shelf. This zone is not large, about 2,800 square kilometers, and the two countries had the demand of exploitation of the zone for their immediate economic development. While the two countries were yet to be ready for negotiation on delimitation of this marine zone, the Governments of the two countries were unanimous to assign PetroVietnam of Vietnam’s oil and gas group and Petronas (Petrolian National Berhad – Malaysia) to start negotiations so as to come to an agreement on the joint exploitation of oil and gas in the zone. The Agreement on the joint exploitation between the two countries was built on the basis of the Memorandum of Understanding on exploration and exploitation of oil and gas in the overlapping continental shelf zone which was yet to be determined. The Vice Foreign Ministers of the two countries agreed unanimously to sign the Agreement in Kuala Lumpur on June 05, 1992.

The two sides had officially determined the coordinate of the overlapping zone along the line of the continental shelf made public by the General Department of Oil and Gas of Vietnam in 1977 (coincide with the claim of the continental shelf made by the former Saigon regime in 1971) and the boundary of the continental shelf expressed on the sea charts of Malaysia made public in 1979. This determined zone was drawn on Britain’s sea charts, number 2414, published in 1967.

The two sides agreed to shelf the issue of delimitation of the continental shelf to have bilateral cooperation in exploration and exploitation of oil and gas in this determined zone in accordance with the duration effective in the signed Agreement and based on the following principles:

– Equally share the costs and equally divide the profits between the two sides;
– All the exploration and exploitation of oil and gas shall be conducted by Patronas (Malaysia) and Petrovietnam (Vietnam) on the basis of the commercial arrangement after the two Governments approve it.
– This Agreement shall not do harm to the standpoint as well as the demand of each side towards the overlapping zone;
– If there is any oil field that lies in part across the determined zone and in part in the continental shelf of Malaysia or of Vietnam, the two sides shall agree to explore and exploit oil and gas there.

In terms of the state management of the oil and gas activities in the overlapping zone, even it is not mentioned in detail in the Agreement, in principle Vietnam is entitled to exercise its state management of the customs operation, of the oil exporting sea port, sea works, the state management of taxes and border guard. However, it is because of the fact that the sea lies far away from the mainland, it is unfavorable for the deployment of all the above-said managerial activities, so Vietnam could possibly authorize the Malaysian side to exercise all the controls over the oil and gas activities in the overlapping zone between the two countries.

After the Agreement takes effect, the two national oil and gas companies of the two countries have signed the commercial arrangements and deployed the oil and gas exploration and exploitation in the overlapping zone between the two countries.

The two sides have set up the Joint Committee at the higher level to resolve important issues of principle character and set up the Coordination Committee to resolve and coordinate all the joint exploitation activities. Depending on specific requirements, the Coordination Committee could set up the law, economic, trade and technical sub-committees.

PetroVietnam and Petronas have unanimously released decisions in the Coordination Committee to approve the financial and work plans of the contractors. Even though Petronas is authorized to manage the contractor through the Coordination Committee, PetroVietnam still has the right to attend the meetings of the Coordination Committee.

The Contractor comprises 5 members: the Hamilton Oil Corp (the coordinator), the Enterprise Oil Company, the IPL Company, the Norcen Company and the Carigali Company (the auxiliary company of Patronas).

After two years of deploying all the oil and gas exploration activities, in 1997, the first oil barrels exploited from the overlapping zone had been exported and the initial profits had been equally divided to the two sides in accordance with the agreement. Now, the oil wells in the joint exploitation zone continue to operate effectively. (The report of the National Border Committee, the Foreign Ministry; Nguyễn Hồng Thao: Joint Development in the Gulf of Thailand. IBRU Boundary and Security Bulletin Autumn 1999).

6. The Agreement on the Joint Exploitation between Guinea-Bissau and Senegal in 1993

While an international treaty on the boundary delimitation of the exclusive economic zone was yet to be reached, on October 04, 1993, Guinea-Bissau and Senegal signed the Agreement on Management and Cooperation in the joint exploitation in the sea (after that, on June 12, 1995, this Agreement had been added with a Treaty on organization and operation of the joint management body). The 1993 Agreement determined the sea zone for the joint exploitation that lies in the exclusive economic zone and the contiguous continental shelf of the two countries covering 240 degrees in accordance with the Treaty signed in 1960 had created a fan shape in 48 degree with the 200-nautical-mile radius from Cape Roxo (Masahiro Miyoshi: The Joint Development of Offshore Oil and Gas in relation to maritime boundary delimitation, Maritime Briefing, Edited by Clive Schofield International Boundaries Research Unit Suite 3P, Mountjoy Center University of Durham, 1999). The two sides set up the joint Management Council to manage the activities of the joint exploitation of the source of fish and other resources on the continental shelf. The Agreement took effect for a duration of 20 years and continues to extend it if the two sides do not any intention to put an end to the Agreement.

7. The Agreement on Cooperation in Fisheries between the Republic of Korea and China in 1993

According to the Agreement on Cooperation in Fishing Job between the Republic of Korea and China in 1993, the two zones for the joint exploitation were determined in the exclusive economic zone of the two states. “The temporary measure zone” is adjacent to the coast of South Korea. “The Transition Zone” is adjacent to the coast of China. Fishermen and fishing boats of each side are allowed to catch fish in the exclusive economic zone of the other state, conforming to the provisions of the Agreement and other relevant provisions.

The two sides set up the China-Korea Fisheries Committee with the aim of boosting the implementation of the Agreement. This Committee is authorized to make a decision on such issues as preservation and management of the fish exploitation activities in the temporary zone and the transition zone; propose the recommendation to allow the fishing boats of each side to catch fish in the exclusive economic zone of the other side, in which what sorts of fish and the quantity of fish are allowed to catch and the conditions for operation of the fishing boats.

Besides the “temporary measure zone” and the “transition zone”, China and South Korea also agreed to maintain a number of the traditional fishing grounds which are also called “the free zone for fisheries activities” (Nguyễn Bá Diến: Cooperation in Joint Exploitation in International Law of the Sea, ibid, pa. 264).

8. The Agreement on Cooperation in Fisheries between China and Japan in 1997

The Agreement on Cooperation in Fisheries between China and Japan signed on November 11, 1997 determines a “temporary fishing zone” that lies in the exclusive economic zone of the two countries. In this zone, fishermen and fishing boats of each side could catch fish in the temporary catching zone that lies in the exclusive economic zone of the other side, but they must abide by the measures suitable to international law promulgated by that side with a view to preserving the resource of marine creatures and protecting the marine environment.

The two sides set up the China-Japan Fisheries Joint Committee to manage all the fishing activities in the “temporary fishing zone”. This Committee is authorized to give consulting ideas to the Government on the following issues: to determine the sorts of fish that are allowed to catch, the quantity of fish is allowed to catch, the conditions to carry out the fishing activities and the preservation and management of the resource of marine creatures in the “temporary fishing zone”.

The Agreement clearly provides that all the provisions of the Agreement shall not jeopardize the standpoint of each side on the issue of determining the sea and other issues relating to the sea. The Agreement takes effect within 5 years and could continue to be extended if there is not any signing party that proposes for the end of the Agreement (Nguyễn Bá Diến: Cooperation in Joint Exploitation in International Law of the Sea, ibid, p. 268).

II. ESTABLISHING THE JOINT EXPLOITATION ZONE WHERE THE MARINE BOUNDARY IS DETERMINED

There are a lot of agreements on the establishment of the joint exploitation zones where the marine boundary has been determined as a form of adding to the enforcement of the national sovereignty over the sea having been signed.

Most of the agreements on boundary delimitation on the continental shelf among states have the clauses that stipulate that if any gas field crossing the delimitation line is discovered, the two sides should have agreement on the merging the field, make equal division of benefits between the parties or have cooperation in the joint exploitation of these crossing gas fields.

1. The agreement on the joint exploitation between Bahrain and Saudi Arabia in 1958

On December 22, 1958, Bahrain and Saudi Arabia signed the Agreement on Delimitation of the Continental Shelf in the Arabian Gulf. In 1974, after having discovered the Fa Abu-Safah oil field, the two countries signed an agreement on the joint exploitation of this oil field. Accordingly, the Araian Government of Saudi Arabia was authorized to conduct the exploitation, provided that it should transfer 50% of the collected value to Bahrain.

2. The agreement on delimitation of the neutral zone between Kuwait and Saudi Arabia in 1965

The Agreement on delimitation of the neutral zone between Kuwait and Saudi Arabia was signed in 1965 to divide the neutral zone and officially set up the joint exploitation zone between Kuwait and Saudi Arabia. According to this Agreement, Kuwait and Saudi Arabia conduct the exploitation of the resources in the joint exploitation zone in the principle of equality. The two sides set up a Joint Committee (a Standing Committee) with the equal number of members to manage the activities of the joint exploitation. However, in the zone lying on its own territory, each state still has sovereignty in the management, legislature and national defense fields. This joint exploitation continues to be carried out and happened smoothly since the signing of the Agreement (M.J. Valencia, Taming Trouble Waters: Joint Development of Oil and Mineral Resources in Overlapping Claim Areas, San Diego Law Review, 1986).

3. The Agreement on delimitation of the continental shelf between Denmark and Canada in 1973

The Agreement between Denmark and Canada signed on December 17, 1973 determines the delimitation of the boundary of the continental shelf of the states, at the same time it is also aimed at boosting the activities of exploration and exploitation of the natural resources of each country on the part of the continental shelf of its own state, conforming to the law and international practices.

The Agreement does not create a joint exploitation zone. It only stipulates the basis for the joint exploitation if a resource mine that crosses the delimitation line is discovered later. In that case, this clause shall create a basis and obligation of cooperation between the two states so that they can come to an agreement on the joint exploitation in accordance with the model of the joint exploitation of where there is a delimitation line.

4. The Agreement on delimitation of the territorial sea between France and Spain in 1974

On January 29, 1974, France and Spain signed the Agreement on delimitation of the territorial sea, the contiguous zone and the continental shelf in Biscay Bay. Article 3 of the Agreement stipulates that the signing parties are eligible to apply the additional process as provided in Annex II concerning the provisions of the exploration and exploitation of the resources in the zone already determined by the geological lines that connect to the attached coordinates. Therefore, the determined joint exploitation zone lies crossing the last bend of the boundary of the continental shelf, with an area of 814 nautical square miles.

According to the clauses applied in the joint exploitation zone in Annex II of the Agreement, the two states encourage the exploitation of resources in the zone based on the principle of equality. To conform to this principle, the two parties undertake to ensure and encourage enterprises of the two countries to take part in the exploitation in the joint exploitation zone based on equality concerning the financial contribution for the activities that match with the benefits of each side. The two states also encourage the application of the suitable modes to set up the joint exploitation zones in the future.

5. The Agreement on the Joint Exploitation between Saudi Arabia and Sudan in 1974

The Agreement on May 16, 1974 between Saudi Arabia and Sudan was signed to set up a joint exploitation zone of the resources in the sea bed and underground in the Red Sea bed. The Common Zone is the zone of the sea bed that lies on the left of the middle zone of the Red Sea, after the right to sovereignty of each state is maintained to the depth of 1,000 meters (the sea area with the depth of 1,000 meters and more is the joint exploitation zone). This provides the delimitation of the boundary of the continental shelf as well as the establishment of the common zone. In the common zone, the two states have the “equal sovereignty over all the natural resources” and these rights are the privileges for them (Article 5 of the Agreement).

A Joint Committee (a collation committee) was set up to guarantee the boost of activities of exploitation of the zone in an effective way. This Committee is authorized largely such as to investigate, delimitate the boundary of the common zone; guarantee the research work relating the exploration and exploitation in the common zone; consider and decide the transfer of technologies and concession relating the exploration and exploitation; take the necessary steps  for the start of exploitation, examination and supervision of the exploitation activities; make decisions when necessary on the implementation of the assigned tasks; carry out any other tasks when assigned by the Government (Article 7 of this Agreement). On the financial issue for the operation of the common committee, Saudi Arabia undertakes to supply budget and collect it from the turnover arisen from the exploitation work in the common zone and in accordance with the concrete agreement of the two Governments (Article 12 of the Agreement).

6. The Agreement on the Joint Exploitation between Libya and Tunisia

After the judgments of the International Court of Justice (ICJ) in 1982 and 1985, Libya and Tunisia signed 03 international treaties in order to exercise the judgment of the ICJ and set up a joint venture to explore and exploit the joint exploitation zone. The official documents on the agreement on the joint exploitation were not officially made public, but from different sources of information, the joint exploitation zone between the two states seems being divided into two parts, on the basis of the ruling in 1982 of the ICJ. Each side is entitled to participate in the joint exploitation through the concessionary companies. The parties shall set up a Consulting Committee for the activities in the joint exploitation zone. Through this agreement, Tunisia shall receive 10% of the revenue from the production of the oil and gas fields on Libya’s continental shelf, corresponding to the share in the west of the joint exploitation zone (Masashiro Miyoshi: The Joint Development of offshore oil and gas in relation to maritime boundary delimitation, Maritime Briefing, 1999).

7. The Agreement on the Joint Exploitation between Colombia and Jamaica in 1993

According to the Agreement on marine delimitation between Jamaica and Colombia on November 12, 1993, apart from delimitating the marine boundary, the two countries also set up a joint exploitation area (called the Joint Regulation Area – JRA) in the places where the two sides were yet to agree on the marine boundary delimitation. The JRA has an area of about 4,500 square nautical miles, where the two sides shall “together manage, control, explore and exploit the biological and non-biological resources” (Articles 1 and 3 of the Agreement on the Marine Delimitation between Jamaica and Colombia signed on November 12, 1993). The two sides set up a Joint Committee to manage all the activities of exploration and exploitation of resources and scientific researches. The Agreement does not provide the effective duration.

8. The Agreement on delimitation of the Tonkin Gulf between Vietnam and China in 2000

The Agreement on delimitation of the territorial sea, the exclusive economic zone and the continental shelf between Vietnam and China was signed on December 25, 2000. On the basis of applying the principle of equality, the two countries have determined the delimitation of the territorial sea, the exclusive economic zone and the continental shelf in the Tonkin Gulf with 21 points with the determined coordinates.

As far as the oil and gas resources in the Tonkin Gulf are concerned, the Agreement stipulates clearly that in case there is any structure of an oil or natural gas field or the structure of any other field or other mineral mines that cross the delimitation line, the two countries shall go through the friendly consultation to reach an agreement on the most effective exploitation of the above-said structures or minerals as well as the equal division of benefits accrued from the exploitation.

In terms of the biological resources, the two countries agree to conduct the consultation on the reasonable use and sustainable development of the biological resources in the Tonkin Gulf as well as the cooperation relating to the preservation, management and use of the biological resources in the exclusive economic zone and the continental shelf of the two countries.

9. The Agreement on cooperation in developing fisheries in the Tonkin Gulf between Vietnam and China in 2000

On December 25, 2000, Vietnam and China reached the agreement on delimitation of the territorial sea, the exclusive economic zone and the continental shelf in the Tonkin Gulf (also called Agreement on Marine Boundary Delimitation in the Beibu Gulf) in attachment of the agreement on cooperation in fisheries development (Fisheries Agreement) in the Tonkin Gulf. Four years later, on April 30, 2004, the two sides exchanged the document already approved in Hanoi and the two above-said agreements had been officially enforced.
The area for the joint fishing activities in the Tonkin Gulf from the 20th Parallel North to the closure of the Bay, the width is 30.5 nautical miles from the delimitation line for each side; the total area is 33,500 square kilometers, or about 27.9% of the Bay’s total area. So, it is to guarantee that the distance from the shore of each country is 30 nautical miles: The majority of the distance from the shore of Vietnam is 35 nautical miles to 59 nautical miles; there are only two points where the distance from the shore of Vietnam is 28 nautical miles: Mũi Ròn and Mũi Độc (Hà Tĩnh – Quảng Bình). The time limit of the joint fishing zone is 15 years (12 official years and 3 extended years).

The mechanism for management of fishing activities in the joint exploitation zone guarantees three principles: if the exclusive economic zone belongs to this country, this country is entitled to control, examine and treat the fishing boats that are allowed to enter the joint fishing zone; the output and quantity of fishing boats allowed to enter the joint fishing zone are based on the principle of equality, by basing on the output that is allowed to catch through the regular investigation; each side is entitled to set up a joint venture and cooperation in fishing with the third party in its own exclusive economic zone. The two sides agree to set up the Joint Fisheries Committee to build the mechanism and implement the management of the joint fishing zone.

Apart from the joint fishing zone, the two sides agree to the transitional arrangement with the 4-year duration in the sea area of Latitude 20 degrees North for fishing boats of both sides to carry on their fishing activities. The two sides shall continue to discuss the concrete scope of this zone. After the transitional period, fishing boats of the two sides shall return to catch fish in their own exclusive economic zone and are not allowed to catch fish in the exclusive economic zone of the other side any more, provided that they are allowed by the other side.

At the same time, the two sides agree to set up a small buffer zone outside the Bắc Luân river mouth with the aim that it is to create advantages to the in and out cruising of the small fishing boats (if these fishing boats are discovered to catch fish, they will be given warning and forced to leave their water area). This area is 10 nautical miles long and 3 nautical miles large from the boundary delimitation of each side (The Border Committee, the Foreign Ministry: Introduction of a number of fundamental issues of Vietnam’s Law of the Sea, the National Political Publishing House, Hanoi, 2004, p. 101-106).

10. The Agreement on Delimitation of Continental Shelf between Vietnam and Indonesia in 2003

On June 26, 2003, the Agreement on Delimitation of Continental Shelf between Vietnam and Indonesia was signed and on May 29, 2007, it was enforced. The two countries affirm that the Agreement shall not make impact on the agreement reached later between the two countries on the delimitation of boundary of the exclusive economic zone.

As far as the oil and gas resources are concerned, the two countries are unanimous that in case when there is a structure of an oil or natural gas field or another mineral mine in the sea bed that crosses this boundary delimitation, the two countries shall kept each other informed of the relevant information and shall agree to the way of having the most effective exploitation of these structures or fields and to the equal division of benefits accrued from this exploitation.

11. The Agreement on the Joint Exploitation of Oild and Gas between Malaysia and Brunei in 2011

Under the time of Prime Minister Abdullah Badawi, Malaysia returned to Brunei two oil and gas blocks named L and M (later called CA1 and CA2) in exchange for Limbang area and the right to together exploit oil and gas of these two blocks.

On November 9, 2011, Patronas of Malaysia and the Oil and Gas Company of Brunei signed two production sharing agreements (PSA) at CA1 and CA2 blocks that lie offshore under the sovereignty of Brunei. According to the PSA, Petronas shall together with the Oil and Gas Company of Brunei to explore and exploit the oil and gas in the two aforesaid blocks with a duration of 40 years. However, the percentage of production sharing between the two companies is still under discussion (Vietnam News Agency, November 23, 2011).

III. MULTILATERAL AGREEMENTS ON THE JOINT DEVELOPMENT

The fact shows that the temporary solutions to the dispute of territorial sovereignty, especially the multilateral dispute, are not many. However, there are a number of models on the joint exploitation and cooperation in management and exploitation in a territorial area that are worth being paid attention to. These models are the Common Fisheries Policy of the European Union (CFP), the Svalbard Treaty and the Antarctic Treaty.

1. The Svalbard Treaty in 1925

The Svalbard archipelago lying near the Antarctic was discovered by William Barent in 1596 who had named it Spitsbergen, and after that fishermen of Holland, Britian, Norway, France, Spain and Russia had operated there. This region has potential in fisheries and minerals. The parties concerned were unanimous in discussing the management of exploitation of the natural resources and fishing activities, the control of activities and other issues relating to sovereignty and the right to sovereignty.

In the First World War, Norway was the country that managed and implemented most of the behaviors of sovereignty over this archipelago. When the War ended, the parties concerned had started discussion on sovereignty over this archipelago, but they had fallen into a blind alley until Russia declared that it would not protest against Norway’s sovereignty over this archipelago, provided that a number of interests belonging to Russia should be guaranteed. This proposal had been accepted by the other parties. On February 09, 1925, The Svalbard Treaty was signed. Norway had the full sovereignty over the archipelago, but the signing parties had equal economic interests such as fishing, exploiting the natural resources and the freedom of navigation; the citizens of the countries concerned were treated equally in terms of taxes and their previous property on the archipelago had been maintained (Christopher C. Joyner: The Spratly Islands Dispute in the South China Sea: Problems, Policies and Prospect for diplomatic accommodation, p.107).

2. The Antarctic Treaty in 1959

After the Second World War, in face of the massive requirement of exploiting the natural resources, it was decided to establish a mechanism to manage the exploitation of the resources in Antarctic. In 1959, 12 countries signed the Antarctic Treaty and now there are a lot more countries having participated in the Treaty. This Treaty had “frozen” all the demands for sovereignty and Antarctic can be used only for the peaceful purposes, where all the states have the freedom of conducting the scientific researches (Lynn M. Fountain: Ending the Paralysis Produced by the “Common Heritage of Mankind” Doctrine, 35 Conn. L. Rev. 1753, 2003, p. 1760). According to the Antarctic Treaty, the parties shall together set up an International Power Body with a function of common management of all cooperative activities stipulated in the Antarctic Treaty. Two main principles recorded in the Treaty are: institutionalize all cooperative activities in the region and set up a de-militarized zone to help boost the cooperative activities and freeze all the declarations of demanding sovereignty. The members of this Power Body consists of all the countries in direct dispute and a number of countries with relevant interests (Antarctic Treaty Secretariat, Christopher C. Joyner, Ibid, p. 108).

3. The Common Fisheries Policy of the European Union (CFP)

The EU six founding members (at that time, EC) for the first time had taken the common measures towards the fishing activities in 1970 in the principle that all EU citizens were equal in getting access to the fishing grounds of the member states. Having seen the importance of the European Union in managing the source of fish in the waters in their management, the member states started the negotiation and reached an agreement on the Common Fisheries Policy (CFP) in 1983. In 2002, EU started the reform of CFP, stressing the long-term exploitation of the sources of fisheries in combination with the protection of these sources of income; restriction on the impact of the fishing activities towards the marine eco-environment. The EU also decided to establish the Community Fisheries Control Agency that regulates the fishing activities in the region in this reform. This agency started its operation in 2007. The prominent point of CFP after 2002 is the running in parallel of two plans: the recovery plan and the management plan.

To carry out the common objective, the CFP highlights the measures to avoid the overfishing, including the stipulation of the allowed quantity of catch; the restriction of capability of fishing and the technical measures. The member states shall be responsible to report their implementation of the said provisions.

The EU distributes the quantity of fish to be caught in the form of quota. In late December every year, the Council of Ministers of the EU countries meets in Brussels (Belgium) to make decisions on the quantity of fish for the whole block. These decisions were based on the scientific researches of the national and international organizations, including the International Council for the Exploration of the Sea – ICES), the Scientific, Technical and Economic Committee for Fisheries.

However, the provision on the quantity of fish to be caught revealed certain weak points. First of all, it does not rule out the possibility of unintentionally catching a certain kind of fish, even though quota for this kind of fish has been used up in the process of having the catch-by. This leads to the fact that fishermen shall throw away this kind of fish unintentionally caught in order to guarantee the quota.. Besides, to guarantee the quota, fishermen only keep the part of good fish and throw away the remainder of fish. Both of the above-said cases shall lead to big waste. On the other hand, there is also the case of buying up the quota among the EU member countries. That is why the EU also provides that the tonnage of fishing boats will be reduced and there will be a fixed number of days for going offshore.

The development of fishing technology had posed an unavoidable danger of over-fishing. It is for this reason that the EU has issued the measures to restrict the possibility of fishing. It means that it will make the fishing activities suitable to the existing quantity of fish. This measure has been taken by the EU since 1995. Accordingly, fishing boats operating in the EU waters and the EU fishing boats outside the EU region should have a fishing license. So, it has limited the possibility of catching fish through granting the special fishing licenses and only those fishing boats which meet the conditions can set sail offshore. The decisions relating to the granting of the special license and other attached decisions will be made by the Council of EU Ministers. In the long term, this measure proves effective in protecting the source of fish for the future fishing, but in the short term, it has created the economic pressure when the quantity of catch has reduced, causing damage to the fisheries sector as well as to fishermen. However, the EU has given them certain financial support.

That the technical measures have been taken is to restrict the possibility of catching small fish or fish of less commercial value. These measures include the use of small-size fishing net; the use of fish selecting instruments; the area and time to ban the fishing activities. The EU has issued the different  measures to adjust the technical measures in the sea waters like the Mediterranean Sea (1994), the North Sea (1998), the Baltic Sea (1998) and so on. However, the above cited stipulations are being reconsidered. The technical measures have often met with the protest of fishermen when they are not allowed to catch assorted fish in each offshore fishing, because as stipulated, they are allowed to bring along the instrument that can help to catch only one kind of fish. On the other hand, controlling the implementation of the technical measures has also become ever more difficult because not all fishing activities are examined and supervised.

One notable point of CFP is that the EU signed agreements with the third countries. These agreements allow the EU fishing boats to carry out their fishing activities in the waters under the management of that third country. The protesters held that with this agreement, the EU has done damage to the fishing sector of the third country, to the activities of the EU fishing boats offshore of South Africa, as an example (Kate-Zillah & Aneurin Brewer: Common Fisheries Policy).

CFP is valued highly because of its comprehensive objectives: economy, society and environment. However, this model is only feasible when integration among the states is high.

4. The International Seabed in accordance with the 1982 Convention on the Law of the Sea

The international seabed is determined in Article 132.2 of the 1982 Convention on the Law of the Sea as the seabed and subsoil in the seabed lying outside the sea waters under the national jurisdiction. The area and mineral resource here are regarded as “the common property of mankind”, The natural resources there shall have to serve the common goal of mankind. None of the states is allowed to occupy these natural resources.

The 1982 Convention on the Law of the Sea works out a number of principles for exploration and exploitation of the resources of minerals in the international seabed areas:

– All activities of exploration and exploitation shall have to be carried out in a reasonable manner without making any impact on the legal use of this region.
– The international seabed is only used for the peaceful purposes.
– Protection and preservation of environment and ecosystem in the international seabed area (1,2. Article 141, 145: the 1982 UN Convention on the Law of the Sea).

The management of the international seabed is assigned to the International Seabed Authority set up in accordance with Articles 156, 157 and 158 of the Convention. This Authority comprises three agencies: the General Assembly, the Council and the Secretariat. On the other hand, there are two consultant agencies: the Economic Planning Committee and the Legal and Technical Committee.

5. The Agreement on the Vietnam-Philippine-China Joint Sea Seismic Survey in the South China Sea in 2005

This Agreement was signed on March 14, 2005 in the Philippines among the Oil and Gas Corporation of Vietnam (PV), the China National Offshore Oil Corporation (CNOOC) and the Philippine National Oil Company (PNOC). The agreed area in the South China Sea is 142,886 square kilometers large, determined by 9 points with specific coordinate attached with the Agreement.

To operate the activities in accordance with the Agreement, the parties set up the Joint Operating Committee (JOC) and the JOC’s decision was approved through negotiation to reach high unanimity of views.

The Agreement’s duration is 3 years and now the parties have completed the first phase (survey and record the sea seismic explosion) and are now discussing to come to agree to the way of deploying the second phase when the practical exploration and exploitation can be started (The Agreement on the Vietnam-Philippine-China Joint Sea Seismic Survey in 2005).

The typical points of the tripartite agreement are that the participating parties are the national oil and gas companies of the states concerned, so it is possible to avoid the dispute of sovereignty. On the other hand, this is only the agreement on the seismic survey, so it is of scientific research character only and it is yet to enter the exploitation of the resources. That is why it is temporary to avoid the sensitive issue of “joint exploitation”. The area under survey is relatively far from the mainland of the countries concerned, and it is possible to avoid to some extent the internal reaction unfavorable to the states concerned.

Through practical study of the cooperation in the joint exploitation in the world, including the Southeast Asian region, it is possible to make some remarks as follows:

– The area for cooperation in the joint exploitation is usually set up on the basis of the bilateral claim of the states concerned. However, the bilateral claims of the states concerned are only accepted when these claims are formed on the basis of the provisions of international law, especially the 1982 Convention on the Law of the Sea.

– Cooperation in the joint exploitation can be able to bring about a lot of practical benefits to the states concerned. In the sea where there are the delimitations, but the resources are shared by two or many states, for example, an oil field and fish resource that lies across the delimitation, then cooperation in the joint exploitation could create conditions to guarantee the effective exploitation of marine resources and protect marine environment and ecosystems. In the disputed marine areas, cooperation in the joint exploitation as the temporary measure can possibly prevent the danger of dispute from breaking out into the violent conflicts, thus making a contribution to maintaining peace, security, stability and cooperation in the region; at the same time, creating an opportunity to make full use of the resources in the disputed region with a view to serving the economic development of the states in dispute. Through cooperation in the joint exploitation, the states participating in the joint exploitation can consolidate confidence and enhance the friendly relations among the neighboring countries. As for the developing states, cooperation in the joint exploitation will also create opportunities to avail themselves of technologies, finance and capabilities of management to exploit the offshore resources for the economic development.

– Even though the agreements on the joint exploitation reaffirm that cooperation in the joint exploitation in the disputed areas shall not make any impact on the results of the final delimitation in the future, it is clear that cooperation in the joint exploitation cannot but influence the issue of sovereignty, the right to sovereignty and the jurisdiction of the states concerned. Once there is unanimity of views of establishing the joint exploitation zone in the disputed overlapping zone, it means that the states concerned have recognized sovereignty, the right to sovereignty and mutual benefits in this marine zone; and sovereignty, the rights to sovereignty and these benefits shall be taken into satisfactory consideration in the final solution when there is the delimitation of the disputed areas.

Translated by Manh Chuong

This article originally appeared at : http://www.vietnam.vn/on-cooperation-in-oint-development-in-international-law-and-realities-chapter-ii-c1068n20130222155828527.htm

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