Thayer Consultancy Background Briefing:

ABN # 65 648 097 123

ASEAN and South China Sea,
Chinas Deployment of the HD
981 Oil Rig
Carlyle A. Thayer
August 5, 2015
We seek your assessment of this week's ASEAN meetings and the South China Sea
and the likely outcomes.
Q1. Our first question is whether you expect there to be a meaningful and united
stance by ASEAN members on the South Chia Sea, or whether this year will be more
of the same seen at previous meetings, that is, those members with a stake in the
matter frustrated by those that want to avoid a confrontation with Beijing.
ANSWER: ASEAN will issue another strongly worded statement on the South China
Sea following the meeting of Foreign Ministers today and heads of government later
in the week. This statement will represent the consensus among all ten ASEAN
members. All this statement will do is put political pressure on China. China has
refused to discuss this issue at multilateral meetings being held in Kuala Lumpur this
week. It is clear that top ASEAN leaders are frustrated by the slow pace of
consultations on the Code of Conduct (COC) and will press China to step up the pace.
And China will insist that discussions on the COC be held, as agreed, under the
framework of the ASEAN-China Joint Working Group to Implement the Declaration
on Conduct of Parties in the South China Sea (DOC). The Joint Working Group
commenced discussions in September 2013 and has met fifteen times since then.
ASEAN has been pushing China to decouple the DOC and COC discussions, but China
insists that the DOC must be fully implemented first. At the end of the day China will
continue to consolidate its presence on the artificial islands it has constructed.
Q2. My second has to do with CNOOC's [China National Offshore Oil Corporation] rig
re-entering disputed Vietnamese waters this year. The reaction seems to be a great
deal more muted - no reports of clashing marine vessels, riots or repatriation of
Chinese citizens. Why is that?
ANSWER: The return of the HD 981 to the vicinity of the Paracel islands was a
commercial decision and not an effort by China to reignite its dispute with Vietnam.
Earlier in the year the HD 981 was deployed from China to waters off Myanmar to
explore for oil. At the completion of its operations it returned to the northern South
China Sea where it resumed exploration before the coming typhoon season. The HD
981 was located well inside the median line where Chinas putative EEZ overlaps
with Vietnams EEZ. The two sides long ago worked out a modus vivendi to let such
activity take place without loud protests. China did not surround the HD 981 with an
 2

armada of ships for protection as it did last year. Last year China knew its actions
were provocative. This year China did not send an armada because it did not expect
a strong reaction from Vietnam.

Suggested citation: Carlyle A. Thayer, ASEAN and South China Sea, Chinas
Deployment of the HD 981 Oil Rig, Thayer Consultancy Background Brief, August 5,
2015. All background briefs are posted on Scribd.com (search for Thayer). To remove
yourself from the mailing list type UNSUBSCRIBE in the Subject heading and hit the
Reply key.

Thayer Consultancy provides political analysis of current regional security issues and
other research support to selected clients. Thayer Consultancy was officially
registered as a small business in Australia in 2002.