An ASEAN do-over: prospects for Brunei’s chairmanship

A REGION DIVIDED

Brunei, a tiny but rich nation with vast oil and gas deposits, is set to assume the chairmanship of the ten-member Association of Southeast Asian Nations (ASEAN) next year from incumbent Vietnam. This will be a momentous development, especially in regard to the bloc’s interaction with its significant yet thorny partner, China. Nowhere are ASEAN’s divided sub-regional allegiances more prominent than in the South China Sea dispute. China, which claims much of the contested waters via its self-proclaimed ‘nine-dash line’ zone, has faced fierce opposition from other claimants —namely Vietnam, Brunei, Philippines and Malaysia — on the basis of their respective Exclusive Economic Zones (EEZ), pursuant to the UN Convention on the Law of the Sea (UNCLOS). As such, these countries have banded together over the past decade to balance Chinese naval belligerence and attempt recourse via international law to invalidate China’s claims to the contested zone.

As a regional bloc, ASEAN occupies the role of interlocutor in the dispute, lifting negotiations to a multilateral level. Its key aim is to continue China’s strategic engagement in the region — ASEAN is China’s largest trading partner — while de-escalating tensions at the bilateral level. To this end, the bloc has pursued a South China Sea Code of Conduct (COC) that seeks to manage inter-state relations and outline a clear dispute resolution mechanism. The COC would, in short, provide legally binding and overarching principles with which future territorial claims in the disputed waters could be approached. In 2016, an arbitral tribunal of the Permanent Court of Arbitration rebuked China’s overextended nine-dash line, ruling in favour of the Philippines instead. Objections by China and its allies to this ruling have stalled COC negotiations, especially over the minutiae of the wording, how the legality of claims are to be considered (according to UNCLOS or some other wording) as well as future dispute resolution mechanisms.

A QUID PRO QUO

Finalising the COC is contingent on the willingness of Brunei to be more proactive in asserting ASEAN’s stance on the dispute and to utilise the chairmanship to counter Chinese sabre-rattling in the South China Sea.

Sino-Brunei relations are historically rooted, dating to 2,000 years ago when Chinese settlers from the Western Han Dynasty settled in Borneo. In the modern era, these relations have gone from strength to strength with China seeking Brunei’s oil and gas to fuel its economic growth and to mediate its interests with ASEAN. Brunei considers Beijing a crucial partner in diversifying its fossil-fuel-based economy and ensuring stability in Southeast Asia. To this end, Beijing has signalled that it would like small and medium enterprises from Brunei to invest in less developed parts of China, while Brunei has tried to broaden the range of Chinese investments in the country.

For example, Brunei’s 30km mega Temburong bridge — aimed at reducing travel time between the capital and the Temburong district, vital to Brunei’s social and economic development — was co-constructed by China State Construction Engineering Corporation and opened in March 2020. Most of Brunei’s large-scale infrastructure deals, including dams, roads, and the Muara Port, are financed by China under the Brunei-Guangxi Economic Corridor plan. In 2018, Brunei and China upgraded their relationship to a strategic cooperative partnership, indicating that both parties see alignment between their respective long-term development visions: China’s Belt and Road Initiative (BRI) and Brunei’s Wawasan 2035.

Consequently, Brunei has traditionally been less proactive than the other claimants in directly opposing China’s construction and militarisation of artificial islands in the contested waters. For instance, despite claiming sovereignty over the Louisa Reef, a small atoll in the South China Sea that overlaps with Chinese and Malaysian claims, Brunei has not occupied the atoll itself — it is the only claimant state that does not occupy any maritime features or maintain a military presence. Instead, it has opted to divert attention away from tensions or inflammatory remarks against Beijing toward multilateral mechanisms for dispute resolution and joint development.

FENCE-SITTING BECOMES PAINFUL

Brunei’s Sultan Hassanal Bolkiah has long balanced dialogue with the West (the UK and the US are major export partners) while courting increased engagement with China. While Brunei remains a strategic partner to China, especially as a net oil exporter, its importance is not indispensable — its oil and gas reserves are declining and it may outlive its usefulness to China. Should Beijing’s interest in the sultanate ebb while China continues to assert itself in the region, Brunei may find its ability to leverage its strategic partnership to talk China down via ASEAN effectively constrained.

Becoming the ASEAN chair is a significant undertaking complicated by urgent imperatives. These include reviewing and updating ASEAN’s Outlook on the Indo-Pacific, the COC, the Regional Comprehensive Economic Partnership (RCEP), the ASEAN Community Blueprints and ASEAN Charter, and the development of a post-2025 ASEAN Vision. Under ordinary circumstances, this is already a tall order. As Brunei assumes this role at the end of 2020, it will also inherit a suite of pandemic-related legacies that may distract it from negotiating the resolution of imminent tensions in the South China Sea.

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As chair this year, Vietnam experienced this dilemma, and it diverted the bulk of the 36th ASEAN Summit to jointly addressing a regional COVID-19 response. As such, the draft reading of the COC and energies toward convincing member states to align with a counter-China policy stance on the South China Sea dispute were delayed. Vietnam did manage to get ASEAN states to reassert their commitment to the UNCLOS, a significant move in calling to attention the primacy of international law in dispute resolution. It is a worrying possibility that without a forceful country like Vietnam driving the ASEAN side of negotiations, Beijing could convince the bloc to accept a COC that is entirely favourable to China’s interests.

Brunei already has very different ideas than Hanoi about easing tensions in the South China Sea. Brunei’s two-step approach, as outlined in its July 20 statement, highlights the need for all countries to accede to the UNCLOS and for countries to agree to avoid inflaming tensions, both of which are generally pro-ASEAN positions. However, Brunei’s maintains that specific issues in the maritime region should be addressed bilaterally with parties concerned and without international involvement. This development implies that Brunei intends for countries to take its impending ASEAN chairmanship seriously and to improve the credibility of the bloc by aligning with its fellow member-states.

Yet Brunei’s general tone and inclination towards bilateral conflict resolution syncs with Beijing’s motivations — likely driven by a desire for continued Chinese investment. China has capitalised on this attitude by channelling investments and infrastructure projects into Brunei’s declining economy. With a $6 billion investment into an oil refinery and local infrastructure along with promises to boost trade and agricultural cooperation, China may easily buy Brunei’s silence on the South China Sea issue next year. This possibility is accentuated when one notes that Brunei has a much smaller and less experienced diplomatic force compared to Vietnam. And with one of the weakest Southeast Asian military forces, in terms of both size and capability, Brunei seeks to work cooperatively with other states, rather than confront geostrategic challenges.

However, China is also not the only power that sees Brunei as strategically important. As a former British protectorate, the UK continues to be embedded in its progress and interests. If Chinese grey-zone tactics persist in Brunei’s EEZ, it could invite the UK to conduct freedom-of-navigation operations alongside their increasingly involved US counterparts. Brunei’s willingness to experiment with new military paradigms and diverse strategic partnerships may therefore compensate for its relatively lacklustre position on the dispute thus far.

Brunei is likely to pursue a more ASEAN-centric stance on the South China Sea dispute. It has already invested significantly to prepare for next year, intending to play a more active role than in 2013, when it was last chair. Its July 20 statement represents the first step in aligning with its fellow claimants and acknowledging the preeminence of UNCLOS, which invalidates China’s claims in the region. As Chinese militarisation and brinksmanship sharpen, all eyes are likely to be on ASEAN, and Brunei is likely to capitalise on its chairmanship with proactive negotiations with Beijing.