Friday, July 29, 2016

₱1.1-M contraband seized: Priests, DOJ promotes Prostitution to Bilibid DRUG LORDS and among the Protectors

PNP-Special Action Force troopers have taken over security posts at the New Bilibid Prison while its personnel undergo prison management training. photo: PhilSTAR

Ex-DOJ execs, religious workers being probed for links in illegal activities at NBP

Former officials of the Department of Justice and religious workers stationed at the New Bilibid Prison in Muntinlupa are being investigated over their alleged involvement in illegal activities at the national penitentiary.

In a media briefing on Friday, DOJ Sec. Vitaliano Aguirre II said he is also mulling forming a fact-finding group to probe the two DOJ officials reportedly receiving money from drug lords at the NBP in exchange for "protection."

He also received reports of religious personnel helping in sneaking in contraband and prostitutes at the national penitentiary.

Aguirre said he thinks it is illegal to let inmates run a "community" inside the penitentiary, adding that the DOJ would be "contemplating" on removing these communities.

Aguirre said he would consider his leadership "a failure" if they would not be able to rid the NBP of illegal activities.

SAF takeover: ₱1.1-M contraband seized at Bilibid

The Philippine National Police-Special Action Force (PNP-SAF) personnel have confiscated a total of P1.1 million worth of prohibited items at the New Bilibid Prison since taking over its security posts, Justice Secretary Vitaliano Aguirre II said on Friday.

From July 20 to July 26, the SAF personnel have seized P612,999 in cash, 80 bladed weapons, 12 ice picks, a caliber 38 pistol, six improvised shotguns, 152 mobile phones, 62 phone charges, six sachets of suspected shabu, one plastic of suspected marijuana and 48 television sets in its search operations at the NBP.

Aguirre said that the Department of Justice (DOJ) is now studying the possible liabilities of the persons responsible for the proliferation of prohibited items inside the prison.

"Once we have determined their violations, you have our word that we will pursue them, to borrow the words of President (Rodrigo) Duterte, relentlessly. The hammer shall fall and it shall fall mightily. There will be no sacred cows. This is just the first barrage of our war on drugs," Aguirre said at a televised press briefing.

Aguirre noted that the prohibited items might have come from visitors of the inmates who have been allowed to go inside prison cells.

The SAF troopers have been strictly implementing the rules of the prison which temporarily stopped the bringing of prohibited items inside the prison, according to Aguirre.

However, some inmates have been discrediting the SAF, claiming the troopers have been abusing the inmates by physically hurting them, which Aguirre declared as "misinformation."

The Justice secretary stressed that the agency will pursue the president's mandate of waging a war on drugs, criminality and corruption.

"We shall marshal all the powers and the resources at our disposal to eradicate these problems. We will give no quarters nor chance for these evils to find a place to grow. It is high time that we take the fight to them," Aguirre said.

Meanwhile, the personnel of the NBP are undergoing prison management to enhance their competence, Aquirre said.

The DOJ aims to reorient personnel of the NBP as part of its program to eradicate drug-related activities inside the prison.

"Our foremost objective is not only to curb but to totally eradicate all drug-related activities at the National Bilibid Prison. If we succeed, we will strike a major blow in the drug trade in the country and that is indeed a big leap in our war on drugs," the Justice chief said. – Sources: —KG, GMA News / philSTAR

FREE 911 Service Philippines; Globe telecom would Charge ₱12.50 per minute

911 emergency hotline available to public starting August 1

In times of emergencies, most people are unaware of what number to call for help.  But come August 1, 911 will officially be the national emergency hotline.

This is one of President Rodrigo Duterte's measures to fight crime and corruption in three to six months.

Officials said the implementation of the new hotline was derived from Davao City's Central 911. The city's emergency hotline provides medical, fire, rescue, police assistance as well as K-9 units.

"By August within a month, the Cebu 911 center will be made operational. I think there are other LGUs (local government units) that will be putting up their own command center[s]," National Telecommunications Commission (NTC) Deputy Commissioner Edgardo Cabarios said.

According to the Department of Interior and Local Government (DILG), the 911 nationwide hotline will connect the caller to emergency, rescue, police, or fire services.

All calls to 911 will also be rerouted to the existing Patrol 117 program.

Talks are underway as to what else will be added.

"Later on kasama na dito yung mga CCTV na magmomonitor ng mga public places," DILG Undersecretary Jesus Hinlo Jr. said. [CCTVs which can monitor public places will be included later on.]

Hinlo added, one does not have to dial an area code and 911 will be implemented for the entire country. But changes will be implemented gradually.

"May transition phase po. Pag nagdial po kayo ng 117… papasok pa din po sa emergency [hotline]." [There's a transition phase. If you dial 117, the call will still enter the emergency hotline.]

Senator Richard Gordon, who is also the Chairman of the Philippine Red Cross, said it takes about eight minutes to arrive on the scene, depending on how far they are.

According to Gordon, the organization receives two to four calls per day from 117.

Davao City medical responders said they should be deployed to the site of the emergency in less than 59 seconds.

Authorities admit, with the new hotline comes some challenges like traffic and prank callers. Gordon said legislators would review if there's a need to pass a bill to impose penalties on prank callers.

Officials, meantime, are appealing to the public not to make prank calls as this would deprive others who are really in need of immediate attention.

Telecommunications and digital services provider PLDT, together with subsidiaries Smart and ePLDT, said they shall fully cooperate with the government for a nationwide emergency hotline, 911.

While Globe Telecom said they would charge  regular rate of ₱7.50 per minute plus ₱5 per call to the hotline.

Telecommunications companies, however, are asking for patience as they put "more improvements" within the year.

They also requested the President to issue a new Executive Order transferring the authority of the current Patrol "117" Commission to a new legal entity to handle the "911" system. – CNN Philippines

Wednesday, July 20, 2016

President Duterte got 91% HIGHEST TRUST RATING in Country Leader's history - 8% Undicided


RECORD-HIGH TRUST RATING. President Rodrigo Duterte is trusted by nearly all Filipinos as he begins his term. Photo by King Rodriguez/PPD

Duterte enjoys record-high 91% trust rating – Pulse Asia

MANILA, Philippines: Nearly all Filipinos trust President Rodrigo Duterte as he embarked on his term, according to the results of a Pulse Asia Research, Incorporated survey released on Wednesday, July 20.

The results of the nationwide survey conducted among 1,200 Filipinos from July 2 to 8, showed that 91% of Filipinos trust Duterte, while less than half a percent distrust him, and 8% are undecided on whether or not to trust him.

“President Rodrigo R. Duterte begins his stint as the country’s 16th president with an overwhelming majority of his constituents expressing trust in him (91%) and practically no one distrusting him (0.2%). The rest of Filipinos (8%) cannot say if they trust or distrust President Duterte,” Pulse Asia president Ronald Holmes said.

Former president Benigno Aquino III used to hold the record of the highest level of public trust in the Pulse Asia trust survey first conducted in 1999. In a survey held during a similar period in Aquino's term – July 1 to 11, 2010 – Aquino had a trust rating of 85%.


Data from Pulse Asia Research, Inc

Among geographical locations, Duterte earned the highest trust rating in his bailiwick, Mindanao (97%). Among socioeconomic classes, trust for Duterte is highest among Class D and the poorest Class D, both at 92%.

In a statement, Palace Communications Secretary Martin Andanar said Duterte’s 91%-trust rating during his first week in office “is a humbling reminder that the genuine and meaningful change that our people aspire for is now being felt.”

“This expression of confidence, therefore, shall serve as an inspiration to the Duterte administration to continuously make a real difference and make our people’s lives better, safer, and healthier,” Andanar said.

A Pulse Asia survey conducted in early July also shows that a 'sizeable majority' of Filipinos trust Vice President Leni Robredo


SIZEABLE MAJORITY TRUST. Vice President Leni Robredo enjoys a 62% trust rating in the July 2016 Pulse Asia survey.

The survey results also showed that 62% of Filipinos – a “sizeable majority,” according to Holmes – trust the Vice President, while 11% distrust her, and 27% are undecided on whether or not to trust her.

“Most Filipinos – regardless of geographic location and socioeconomic status – say they trust Vice-President Robredo (58% to 72% and 53% to 64%, respectively),” Holmes said.

Among geographical areas, Robredo got her highest trust rating from the Visayas (72%), and among socioeconomic classes, from Class D (64%). Indecision on whether to trust the Vice President is highest in Mindanao (32%) and among the well-off class ABC (35%).

Robredo thanked her countrymen for the overwhelming "vote of confidence."

"We are overwhelmed by the outpouring of support from our fellow Filipinos. From 1% in the pre-election surveys to 35.1% – and now, a trust rating of 62%," she said in a statement.

The survey showed that the primary sentiment toward the Chief Justice is one of indecision, as 42% of Filipinos are undecided on whether or not to trust her. But there are more Filipinos who trust Sereno than distrust her (35% vs 19%).

“Big plurality indecision figures are posted by the Supreme Court Chief Justice in the Visayas (43%) and Class E (46%). On the other hand, the latter receives practically the same trust and indecision ratings in Metro Manila (40% versus 37%), the rest of Luzon (36% versus 46%), Mindanao (38% versus 36%), Class ABC (37% versus 50%), and Class D (38% versus 39%),” Holmes said.

During and immediately before the survey period, among the major news were the oath-taking of Duterte and Robredo, Cabinet appointments including Robredo as housing chief, cases filed against Aquino in connection with the Disbursement Acceleration Program and the Mamasapano clash, and the spate of drug-related killings in the country and calls to probe these.

Around this time, Duterte also expressed his willingness to have bilateral talks and joint exploration with China in the West Philippine Sea (South China Sea), Holmes said.

The nationwide survey has a ± 3% error margin at the 95% confidence level; subnational estimates for each of the geographic areas covered in the survey (i.e., Metro Manila, the rest of Luzon, Visayas and Mindanao) have a ± 6% error margin, also at 95% confidence level.

The July survey also polled the respondents on their expectations of the new administration. (READ: Inflation, jobs edge out crime as Filipinos' top worries – poll) –

Philippines flips the pig nickel finger at China

Philippine President Rodrigo Duterte has warned that he will cancel mining projects that are causing environmental harm. (AP Photo/Aaron Favila, File)

We are now seeing the first repercussions of the fact that the disputes between China and the Philippines extend beyond the South China Sea — the nickel price is on the rise following nickel mine shutdowns ordered by the Philippine government.

Last night, nickel edged up to a one-year peak of $US4.81 a pound. While last night’s price is a far cry from the heady days when nickel was above $US10 a pound, it still represents a rise of almost 15 per cent from the $US4.20-a-pound level where nickel traded just a month ago.

While the outlook for all the base metals is improving, the shut down of key nickel mines in the Philippines has given a real boost to the nickel market at the expense of China.

The fact that the Philippine government’s shut down orders came a few days before the International Court of Justice ruled in favour of the Philippines over China in their South China Sea dispute is not lost on the nickel market, although, naturally, everyone may deny a connection.

Nevertheless, this is the first of many trade issues that will arise in the South China Sea, which, we should not forget, is the main route used by Japan to gain supplies.

To understand the importance of the Philippine government’s crackdown on nickel ore production we need to go back into the history of the development of pig nickel, which I outlined earlier this year when explaining the source of the woes hitting Clive Palmer’s Townsville nickel refinery (Townsville’s problem is pig nickel not Clive Palmer, April 20).

Nickel was once a boom metal but the Chinese stopped the nickel boom via a product called pig nickel. Pig nickel contains cobalt, zinc, copper etc. but it is good enough to make the stainless steel used in a lot of buildings and handrails plus low-grade kitchen and bathroom equipment.

However, pig nickel is not an acceptable substitute for the stainless steel used in chemical plants, oil refineries and nuclear power plants.

China initially produced pig nickel from nickel ore imported from Indonesia. So, although the production process was cheap and dirty, when the nickel price increased, the Chinese cranked up their pig nickel blast furnaces.

But in 2014, Indonesia stopped exporting nickel lateritic ore, demanding instead that its nickel be turned into metal in Indonesia. The price of nickel boomed as pig nickel plants in China were forced to slash production due to insufficient ore supply.

But then China began sourcing its nickel ore from the Philippines and the nickel price slumped once more as pig nickel hit the market again.

In May, voters in the Philippines elected Rodrigo Duterte President. Duterte went on to appoint Regina Lopez, a staunch environmentalist, as mining minister.

Earlier this month, she ordered the suspension of operations at two nickel ore mines for environmental violations and halted the issuance of exploration permits while she undertook a review of all existing mines as part of a nationwide crackdown on bad mining practices.

The two nickel mines that were suspended were operated by BenguetCorp Nickel Mines Inc and Zambales Diversified Metals Corp,.

Of around 40 metals mines operating in the Philippines, Minister Lopez told Reuters she didn’t “even know of one” that practised responsible mining, strictly adhered to environmental standards or took full care of the local communities where they operated.

And, to back her up, President Rodrigo Duterte warned that he would cancel mining projects that were causing environmental harm.

Take that China.

The Philippines is the biggest nickel ore supplier to China and have the fifth-largest nickel reserves in the world.

Given that the Philippines mining crackdown and the South China Sea ruling all happened within one week in July, it’s still too early to determine how trade will be affected.

Leaving aside the timing of the Philippines crackdown on nickel production, the global nickel industry needs a nickel price approaching $US10 a pound in order to make worthwhile returns.

And given the bad mining practices in the Philippines, it will take a much higher nickel price to justify the extra outlays required to alter approaches to mining. China is in the front line of the countries to be affected. – The Australian

 ROBERT GOTTLIEBSEN - Business Spectator columnist Melbourne @BGottliebsen



Sunday, July 17, 2016

FORBES: China SENT H-6K NUCLEAR BOMBER to Panatag Scarborough Shoal . can attack any target in the entire territory of the Philippines.- PLA Website Said"

A Chinese H-6K bomber flies over Scarborough Shoal, which the Permanent Court of Arbitration ruled on Tuesday belongs to the Philippines’ exclusive economic zone. The People’s Liberation Army Air Force (PLAAF) released the photo on their Weibo social media account two days after the ruling. PLAAF.

Chinese Bomber Buzzes Philippines' Scarborough Shoal In Latest Salvo Of U.S.-China Signalling War

China released a photo Thursday of a nuclear-capable Chinese bomber flying south near Scarborough Shoal (Panatag Shoal). This is the latest salvo in a signalling war between the U.S. and China over Philippine territory.

In April 2016, the U.S. sent A-10 Thunderbird attack planes over Scarborough. These heavily-armored “Warthogs” are not nuclear-capable planes, but rather designed for close-air support to ground troops. According to the U.S. Air Force, the A-10 missions over Scarborough promoted “transparency and safety of movement in international waters and airspace, representing the U.S. commitment to ally and partner nations and to the Indo-Asia-Pacific region’s continued stability now and for generations to come.” The Chinese H-6K nuclear bomber is a significant escalation in what has become a signalling war over the South China Sea.

The effect of the release on the Weibo social media account belonging to the People’s Liberation Army Air Force (PLAAF) should be interpreted as an attempt to signal to the Philippines and the U.S. that China is serious about its South China Sea claim, as delineated by the 9-dash line. The claim includes Scarborough Shoal, far to the north of most of the occupied islands of the Spratlys and Paracels.

According to retired Captain James Fanell, former Director of Intelligence and Information Operations for U.S. Pacific Fleet,  “My cut is that this flight is indeed a direct and intentional strategic signal that is in keeping with China’s post-PCA [Permanent Court of Arbitration] ruling statements that they neither acknowledge nor accept the court’s verdict.”

The photo release followed quickly after Tuesday’s ruling in the Hague by the Permanent Court of Arbitration. The PCA ruled the 9-dash line illegal according to the United Nations Convention on the Law of the Sea (UNCLOS). China immediately responded to the ruling on Tuesday by calling it “illegal” and “null and void”, and attempted to discredit the Court.

According to Mr. Fannell, “while it may not be unprecedented for a PLAAF H-6K bomber to fly from its bases on the Chinese mainland out towards Scarborough, it is unprecedented to have such a flight advertised by PRC press and to specifically orchestrate the pictures and public message over Scarborough.”

The H-6K bomber (tail number 11097) depicted in the photo is capable of delivering a nuclear-armed cruise missile to all major U.S. military bases in Asia, including Singapore, Guam, and Okinawa. The H-6K is based on the Russian Badger bomber and has a combat range of up to 3,500 km. It can carry six CJ-20 cruise missiles under its wings, plus additional missiles internally. The CJ-20 cruise missiles can travel an additional 1,500 to 2,000 km beyond the H-6K’s combat radius. When fully loaded with ordnance, the bomber’s range decreases slightly.

Mr. Fanell said that the H-6K flight near Scarborough “should be taken as another reminder of the military threat to our U.S. Seventh Fleet and the naval assets of our allies in the region.” The U.S. Seventh Fleet has been based in Singapore, since losing its lease for Subic Bay from the Philippines in late 1991. The Fleet left the Philippines for Singapore in 1992.

Given China’s threats and occupation of islands within Philippines’ EEZ, the Philippines allowed a rotation of “temporary” U.S. forces into Subic Bay in 2015. Scarborough Shoal is only 162 miles from Subic Bay, and so a Chinese air strip at Scarborough would be a major strategic threat to U.S. forces stationed there, and the utility of Subic Bay as a naval base. Chinese maritime and military experts said that China plans to build an airstrip on the shoal in 2016.

The U.S. could reply to the Chinese H-6K flight over Scarborough by executing and publicizing its own nuclear-capable flight over the South China Sea in the near future. The U.S. similarly signalled after China declared an air defense identification zone over the East China Sea in 2013 by flying two nuclear-capable B-52 bombers through the ADIZ. This was widely seen as an invalidation of the ADIZ since the U.S. and Japanese militaries do not officially recognize its existence.

Failure to publicly respond to China’s H-6K flight could be seen by Chinese military planners as backing down on the Scarborough issue, and giving China a subtle green light to start building a military airstrip. Military flights provide strategic signalling that is seen as an escalation over diplomatic statements. Military moves such as the H-6K flight over Scarborough demonstrate resolve on an issue.

Military theory, such as that promulgated by Harvard Professor and Nobel Laureate Thomas Schelling, predicts that the less powerful competitor (in this case China) will back down first when two potential combatants climb a “ladder” of escalation. Dr. Schelling’s theory is known as “escalation dominance”.

But China has not reached that point yet, and is still escalating. The CCG augmented the number of ships at Scarborough since June 12, when two CCG cutters, a medium-sized CCG ship, and two speedboats maneuvered dangerously close to Philippine activists and fishermen who raised a Philippine flag at the shoal. I was an eye-witness on that day.

Thursday, four Chinese Coast Guard (CCG) boats denied Filipino fishermen access to Scarborough, which is 139 miles from the Philippine coastline and within the Philippine exclusive economic zone (EEZ). Scarborough Shoal is 539 miles from Hainan Island, the closest point in China.

On Monday last week, a CCG cutter and speed boat warned and turned back two New York Times reporters who had chartered a yacht to Scarborough. It is likely that the other CCG boats at the shoal did not make themselves visible. The reporters met a fishing boat on the way home that confirmed that the CCG was not allowing them to fish at the shoal — and as a result their normal $1000 catch was reduced to a few hundred. China’s blocking of Philippine fishermen from access to the shoal is in direct violation of the PCA ruling on Tuesday.

Not all analysts saw the PLAAF’s Scarborough flight as necessarily indicative of a threat. “Things are still fresh since the arbitral decision and reading hostile or proactive intent into the flight of [a] single Badger would be pure speculation, especially since flights like this have occurred prior to the decision,” said Michael Listner. Mr. Listner is a Principal at Space Law & Policy Solutions. “That isn’t to say the Badger flight isn’t significant and may have internal propaganda value, but it has to be taken in the context of the totality of other actions China may take. Analysts should be watching and take this flight into consideration, but they should not jump to conclusions about China’s intent towards the disputed territory and their response to the arbitral decision solely on this one flight.”

The H-6K was not visibly carrying cruise missiles beneath its wings. The photos released did not show it accompanied by other bombers, fighter jets, or airborne early warning and control planes. Without these critical complements for an actual tactical flight, the purpose of the H-6K flight could be interpreted as for domestic Chinese propaganda only, rather than strategic signalling to the U.S. The flight was not published in the major English-language Chinese papers, such as China Daily, Xinhua, or People’s Daily.

However, the PLAAF Weibo site did release other photos of military planes in the same post with the H-6K flying over Scarborough. These included another H-6K (tail number 10190) and a Sukhoi SU-27UBK fighter jet.

A Chinese-language news site covering the flights over Scarborough noted that “After the South China Sea arbitration case, the [PLA] Air Force quietly made a big move!” The news site also wrote that “The H-6K over Huangyan Island [Scarborough] … can attack any target in the entire territory of the Philippines.” - FORBES

I worked in military intelligence for five years, including on nuclear weapons, terrorism, cyber-security, border security, and counter-insurgency. I covered and visited Asia and Europe, and worked in Afghanistan for one and a half years. I have a Ph.D. in Government from Harvard University, and a B.A. and M.A. in international relations from Yale University (Summa cum laude). My company, Corr Analytics, provides political risk analysis to commercial, non-profit, and media clients, and publishes the Journal of Political Risk. I am editing a series on the South China Sea conflict, and have covered and visited Africa, the Middle East and Latin America.

The author is a Forbes contributor. The opinions expressed are those of the writer.

I cover international politics, security and political risk.

Follow me on Twitter @anderscorr. If you have any additional information related to this article, contact me at


Saturday, July 16, 2016

Pidcock backs Philippines to emerge as EM power player

Jason Picdcock. Photo:

The Philippines is one of the best and fastest-growing countries in the emerging market universe, according to Asian income specialist Jason Pidcock.

Writing in an investor update, the manager of the Jupiter Asian Income fund said, despite having low GDP per capital, the country was growing sustainably at around 6%.

Pidcock said the Philippines is moving towards developed-market norms, such as smaller families, which is, in turn, increasing their spending.

‘The young Philippine middle class is already growing rapidly. Annual disposable incomes are up 14% annualised over the last three years, and the portion of the workforce earning more than US$5,000 has surged from 6% in 2005 to 21% in 2013. I expect these trends to continue as the country’s economy continues to move up the value chain,’ Pidcock said.

He added that the country was benefitting from Chinese tourism, while foreign direct investment had increased due to the population’s English language skills.

The comments on Philippines come in the same week as tensions in South East Asia. This has seen the Philippines state China should abide by an international tribunal’s ruling that is has no rightful claim to the South China Sea.

Adding exposure

Pidcock has allocated 6.9% of the fund, which was launched in March of this year, to the Philippines and said, while it is still developing, it produces lower dividend yields and the choice of other developed markets.

‘The macro attractions of the Philippines are hard to deny. But as an equity investor the fundamental question is whether there are attractive, well managed companies for me to invest in. The answer is that while this maturing market doesn’t have the depth of some of its more developed peers, I see a number that do fulfil my investment criteria,’ he said.

In terms of holdings, Pidcock has around 2.7% in shopping centre operator SM Prime, which he said will benefit from a rise in domestic consumption. He also holds food producer Universal Robina (2%) and the diversified conglomerate GT Capita (2.4%)

Persuasive politics

Pidcock added the political environment is stable in the Philippines and this will support the economy over the long term. He expects growth in the Philippines to overtake growth in Thailand within the next 15-20 years.

‘Politics are always a risk in emerging markets. On balance, the political situation in the Philippines looks favourable and it seems likely that politics will be a positive factor. President Duterte talks freely – occasionally too freely – but I think he will be good for the economy and therefore the stock market,' he said.

‘He wants to cut down corruption, has some slightly unorthodox ways of going about that, but the objective is a good one – there’s an upbeat feel in the country, generally Filipinos are optimistic. And the fact that he won his election clearly is a good thing – there was also no dispute with the result, which is good.’

In the three months since launch to the end of June 2016, the Jupiter Asian Income fund returned 1.7% in US dollar terms, which compares to a return of 0.89% by the average manager in the Equity – Asia Pacific Ex Japan sector over the same period. – CITY WIRE - WEALTH MANAGER

FORBES: The Philippines Should Sue China For $190.08 Billion USD In South China Sea Rent And Damages


This Monday, May 11, 2015, file photo, taken through a glass window of a military plane, shows China’s alleged on-going reclamation of Mischief Reef in the Spratly Islands in the South China Sea. China’s campaign of island building in the South China Sea might soon quadruple the number of airstrips available to the People’s Liberation Army in the highly contested, environmentally delicate, and strategically vital region. (Ritchie B. Tongo/Pool Photo via AP, File)

The Philippines Should Sue China For $177 Billion In South China Sea Rent And Damages

China owes the Philippines and other countries more than $177 billion in rent and damages for China’s South China Sea fiasco. The Permanent Court of Arbitration found on Tuesday that Mischief Reef is a low-water elevation and within Philippines’ exclusive economic zone. This gives the Philippines’ indisputable legal rights to the reef. But since 1995 when China occupied the reef, China irreparably harmed the reef’s delicate marine ecosystem by dredging and building an artificial island there, including a military garrison and air-strip. By my estimate, China owes the Philippines $12.4 billion in rent and damages for Mischief Reef alone. Considering other Chinese island-building, the country owes the Philippines and other claimant countries more than $177 billion. If China doesn’t want to pay, the Philippines can sue in the courts of the U.S. and other countries where China holds property.


Billing Computation is a separate computation provided by the

Here is how to calculate what China owes. In 2015, the U.S. paid $1.97 million to the Philippines for 0.58 acres of coral reef destroyed when the USS Guardian went aground. That is a key reference point for environmental claims. Rent is even more costly. In 1988, the Philippines demanded $1.2 billion from the U.S. in rent for 6 military bases — $200 million each per year in 1988 dollars. The U.S. refused and got evicted.

By those metrics, the Philippines could sue China for about $4.6 billion of environmental damages to Mischief Reef in 2016 dollars, plus the requirement to pay $7.8 billion in rent. If China refuses to pay the combined $12.4 billion, the Philippines could seek redress in foreign civil courts to attach China’s offshore assets — of which there are plenty.

But China is liable for much more.  China occupied six additional features in 1988 in the Spratley’s claimed by the Philippines, plus Scarborough Shoal in 2012.

The Philippines did not resist because they justifiably feared violence on the part of China. In 1988, Vietnam claims that China killed 64 Vietnamese soldiers who resisted on Johnson South Reef in the Spratley’s. China disputes the claim, but according to historian and BBC reporter Bill Hayton, “Strangely, a propaganda film released by the Chinese Navy in 2009 to celebrate the navy’s 60th anniversary gives more credence to the Vietnamese version. The video, now available on YouTube, was shot from one of the Chinese ships and shows the Vietnamese force standing knee deep in water as the tide rises over the reef. Huge spouts of water then erupt around the Vietnamese troops as the Chinese ships open fire. Within seconds the thin line of men has completely disappeared and 64 lie dead in the water: the machine guns are Chinese and the victims Vietnamese. The Chinese won the battle of Johnson Reef with a turkey shoot.”

China occupied six features within Philippines’ claim in 1988: Hughes Reef, Johnson South Reef, Gaven Reef, Subi Reef, Fiery Cross Reef, and Cuarteron Reef. China has since dredged and built on all these reefs. Based on Philippines’ 1988 demand for rent from the U.S., each of these six features should yield (in 2016 dollars) about $10.3 billion for 29 years of use — a total of $62 billion.

China occupied Scarborough Shoal in 2012, but has not yet built there. There are no known environmental damages to the shoal, but rent for five years should be about $1.8 billion (inclusive of 2012 and 2016).

By my count, and including the $7.8 billion in rent for Mischief Reef, China owes the Philippines about $71.6 billion in rent for occupation of all 8 China-occupied features in the Philippines’ claimed part of the South China Sea.

In addition, the Court found that China destroyed a total of 48 square miles in the South China Sea through illegal dredging and artificial island building. Based on the $1.97 million paid by the U.S. to the Philippines in 2015 for the grounding of the USS Guardian, an international court could levy a $105 billion fine on China for ecological destruction of all 48 square miles, payable to the Philippines and other claimant states.

Should China refuse to pay, the Philippines and other claimants can bring civil suits in the U.S. and any other locations where China holds substantial assets. The total levy on China for rent on Philippine-claimed features, plus ecological damage to the entire South China Sea, should be about $176.6 billion: double Philippines’ annual GDP, and about a third of China’s GDP. That doesn’t include rent payable to other claimants, which should also be paid.

When China vacates its artificial islands in the South China Sea and pays this fine, plus rent to other claimants and any additional payments to the families of those killed, most attentive citizens will consider justice to have been done. Until then the international ruling in favor of the Philippines, as China has said, is just a sheet of paper. - FORBES

I worked in military intelligence for five years, including on nuclear weapons, terrorism, cyber-security, border security, and counter-insurgency. I covered and visited Asia and Europe, and worked in Afghanistan for one and a half years. I have a Ph.D. in Government from Harvard University, and a B.A. and M.A. in international relations from Yale University (Summa cum laude). My company, Corr Analytics, provides political risk analysis to commercial, non-profit, and media clients, and publishes the Journal of Political Risk. I am editing a series on the South China Sea conflict, and have covered and visited Africa, the Middle East and Latin America.

The author is a Forbes contributor. The opinions expressed are those of the writer.

I cover international politics, security and political risk.

Follow me on Twitter @anderscorr. If you have any additional information related to this article, contact me at

Thursday, July 14, 2016

CHINA already "GAVE UP" South China Sea rights after signing UN treaty, Chuck Hagel says

West Philippine Sea & South China Sea Map. Source:

Beijing gave up South China Sea rights after signing UN treaty, Chuck Hagel says

Beijing gave up its rights to the South China Sea after signing up to a United Nations convention, a former U.S. Defense Secretary said Wednesday, a day after an international tribunal ruled that China's claims of historical rights over the disputed waters were not founded on evidence.

A tribunal at the Permanent Court of Arbitration in The Hague, Netherlands, decided on Tuesday that China's claims to the disputed waters were counter to international law.

The Philippines had contested China's expansive territorial claims in the South China Sea, which Manila contended were invalid under international law.

China, however, said its historic rights predated the United Nations Convention on the Law of the Sea (UNCLOS) and were not at odds with the provisions of the treaty , to which both countries were signatories.

But the East Asian giant relinquished those rights when it signed the UNCLOS, former U.S. Secretary of Defense, Chuck Hagel said.


"(It) explicitly states in that treaty and when you sign that treaty, you would and do relinquish all previous historical rights to any contested territory. So China essentially put itself in this position to be part of whatever the international tribunal comes down with," Hagel told CNBC's "Squawk Box".

"(The tribunal) is one of the most important post World War II institutions that has been set up to try to bring some order to a world that had gone without any order which lead to two world wars. I think it's important that we continue not only to maintain, but to support the force of those international tribunals," he added.

The Philippines wasn't the only big winner in a legal decision on rights to the resource-rich South China Sea, according to experts.

Malaysia, Vietnam and Indonesia are also set to benefit from the ruling, which dealt a painful blow to China's national pride

The Hague found the so-called 'nine-dash line' — a rough demarcation that China uses to set out what it believes is its territory—was illegal when applied to the Philippines, that meant it was also illegal when applied to other countries, added Paul Reichler, a partner at Foley Hoag and lead lawyer for the Philippines in the case.

"They are big winners as well," Reichler told CNBC's "The Rundown."

Hagel concurred with that assessment.

"This decision by the Hague really gives all those countries in that part of the world the high ground here and has isolated China. China has to pay attention to how other nations in the world are viewing this and will view them (the Chinese)," said Hagel, who described the ruling as "critically important."

China has said repeatedly that the arbitration tribunal had no real jurisdiction on the matter and that it would not abide by its decision.

Both Hagel and Reichler called for cool heads.

"This certainly isn't the end of the story," Reichler said. "When passions calm and different parties truly consider what's in their best interest, all parties will come to the conclusion that these disputes have to be resolved peacefully through diplomatic negotiations, whether it's bilateral or multilateral."

Regarding talks that China and Philippines may talk one-on-one on a deal, Hagel said the U.S. did not want to see "further escalation here by anyone."

U.S. is seeking to maintain "freedom of navigation" in the region for its ships, including military ships.

Noel Celis | AFP | Getty Images

"Freedom of navigation is absolutely critical; when a nation starts to threaten that in any way, that's very, very serious…. We don't want an over-reaction to this but we've got to be very clear with our allies and our friends in that area that (freedom of the seas) is not negotiable," said Hagel.

The real impact of Tuesday's ruling was that it clearly established the rights and obligations of the various parties involved, Reichler said.

"The Philippines succeeded in establishing that it enjoys the rights, guaranteed by the U.N., to an exclusive economic zone, in which it alone can enjoy the resources."

President Xi Jinping's administration reiterated his country's stance in an official statement after Tuesday's decision. Because China was the first to have discovered, named and explored the 1.4 million-square mile body of water, it had a right to establish territorial sovereignty, the statement said, added that the country was willing to continue resolving disputes peacefully through negotiations.

There is precedence if China wished to ignore The Hague's decision, although Reichler said that that would be an ill-advised move.

In 1986, the U.S. ignored the International Court of Justice's ruling regarding a spat with Nicaragua.

The Central American country had accused Washington of supporting Nicaraguan Contra rebels in an effort bid to undermine the country's socialist government, but the U.S. largely boycotted the proceedings, stating the court had no jurisdiction. It later vetoed a United Nations Security Council resolution that demanded Washington adhere to the ruling.

It was only in 1988, when U.S. Congress voted to terminate all support for the Contras that a settlement was ultimately reached.

"China can't thumb their nose at this," Reichler said. "It's not good practice to follow someone else's bad example. It was a great stain on the U.S. when it refused to honor the Nicaragua ruling. – CNBC

Tuesday, July 12, 2016

South China Sea ruling: Hague tribunal rules Beijing has 'no legal basis' to claim waters or resources

The Philippines challenged the so-called 'nine-dash line' China uses to claim virtually the entire South China Sea

China has "no legal basis" to claim historic rights to waters or resources in the South China Sea, an international tribunal has ruled.

The Philippines challenged the so-called "nine-dash line" China uses to claim virtually the entire South China Sea.

The dispute centered on waters through which an estimated $5 trillion in global trade passes through each year. The waters are also home to rich fishing stocks and a potential wealth of oil, gas and other resources.

The Philippines also asked the Hague-based tribunal to rule on whether several disputed areas are outcrops, reefs or islands, a move aimed at clarifying the extent of territorial waters they are entitled to or if they can project exclusive economic zones.

The court declared that “although Chinese navigators and fishermen, as well as those of other states, had historically made use of the islands in the South China Sea, there was no evidence that China had historically exercised exclusive control over the waters or their resources.

“The tribunal concluded that there was no legal basis for China to claim historic rights to resources within the sea areas falling within the ‘nine-dash line’.”

The Philippines' foreign minister called for "restraint and sobriety" in the South China Sea on after the ruling.

"Our experts are studying this award with the care and thoroughness that this significant arbitral outcome deserves," Foreign Affairs Secretary Perfecto Yasay told a news conference.

"We call on all those concerned to exercise restraint and sobriety. The Philippines strongly affirms its respect for this milestone decision."

China, which has boycotted the case, has summoned its demobilized sailors and officers for training drills, state media confirmed, in exercises that apparently started just days ago.

A Chinese civilian aircraft successfully carried out calibration tests on two new airports in the Spratly Islands in the South China Sea on Tuesday, state news agency Xinhua said.

It said the two airports were on Mischief Reef and Subi Reef, and the facilities will help with personnel transfers to the Spratlys.

In February, China deployed surface-to-air missiles on disputed islands in the South China Sea.

American and Taiwanese officials said missile batteries had been set up on Woody Island, part of the Paracels chain that has been under Chinese control for more than 40 years – but which is also claimed by Taiwan and Vietnam.

SOURCE: [ INDEPENDENT Additional reporting by Reuters ]

Monday, July 11, 2016

High stakes on the high seas: Philippines v China at The Hague

A Chinese Coast Guard boat sprays a water cannon at Filipino fishermen near Scarborough Shoal in the South China Sea last year. Photo: AP

At what point does a lonely rock in a vast ocean become an island? Just how much land is needed to sustain human life?

And when China dredges thousands of tons of sand from the sea floor to build a runway, is Beijing right to claim the waters surrounding an artificial island as its own territory?

An international court is about to rule on these crucial questions in the bitterly contested waters of the South China Sea, in one of the most eagerly awaited decisions in global politics right now.

It could also mark the moment Australia has come to dread: when the brewing rivalry between the United States and China finally breaks into a storm.

The South China Sea is a critical artery of world trade; about $US5 trillion worth of oil, gas, resource and "Made in China" goods are shipped across these waters back and forth from the powerhouse economies of Asia, including about 60 per cent of Australia's exports, according to government estimates.

But who exactly controls the South China Sea has been a stubborn regional dispute lasting decades - not just for the navigation channels, but just as importantly, the riches thought to lie beneath the waves in vast untapped oil fields and highly prized fish supplies.

Suddenly this regional dispute over rocks and coral beaches shapes as a critical test between China's willingness to thrown its weight around and Washington's insistence that Beijing should follow the existing rules it has policed over decades as the global superpower.

The US has been keen to ensure the court decision gets as much publicity as possible, while China has responded in the last week with naval war games and disdain.

Australia has been carefully watching, a key ally for Washington and a major trading partner for Beijing, knowing these are the kind of disputes that can determine geopolitical destiny.

The ruling is expected on July 12 and four main issues could have profound consequences for the balance of power in the neighborhood.

1. A hungry 'cow's tongue'

The Philippines has lodged a case against China under the Law of the Sea in the Permanent Court of Arbitration at The Hague, even though China has refused to participate.

Six countries claim overlapping parts of the South China Sea, creating a dangerous flashpoint for potential conflict in roughly 3.5 million square kilometers of open water, shoals and coral atolls teeming with fish and oil, and a key ocean passage for thousands of cargo ships passing through Asia.

But China's bid for territorial control sweeps across almost all others, shown on maps by a deliberately vague dotted line that hooks deep in a U-shape past the coast of Vietnam, towards Indonesia, and close to the western islands of the Philippines.

South China Sea  and West Philippines Sea overlapping claims. Illustration: The Sydney Herald Morning Post

Known as the "nine-dash line" - which Vietnam likens to a hungry "cow's tongue" for the way it licks across the region - China claims its control of the waters dates back to ancient times, marked in 600-year-old mariners' books.

The Philippines has asked the court, among a log of 15 technical claims, to rule China's "nine-dash line" is inconsistent with the modern Law of the Sea, which is based on geological features.

"That is absolutely the most important question put before the tribunal," Jay Batongbacal, a professor of international maritime law at the University of the Philippines, tells Fairfax Media.

The court hasn't yet said it has jurisdiction on this question, and it cannot decide issues of sovereignty - who owns what.

But if the court does weigh the question of the nine-dash line, there is little expectation that it will grant legal backing to the idea of "historic rights".

The ruling might prod China to precisely explain exactly what it claims, instead of resorting to what is seen as deliberate ambiguity.

2. Life, but not as we know it

It was a big risk for Philippines to take on China, by far its largest trade partner. The court decision may also completely upend Manila's own territorial claims.

The Philippines have challenged the court to decide whether a small stretch of land, just longer than a kilometer, is actually an island or just a big rock.

The difference is crucial for international law in deciding how much surrounding territory can be claimed.

Taiwan presently occupies this land, the largest feature of dozens of rocky outcrops and reefs in the Spratly Island chain, calling it "Taiping Island".

The Philippines calls it "Itu Aba", and says it has no fresh groundwater to sustain human life and so is better described for legal purposes as a rock.

Itu Aba. Illustration: The Sydney Herald Morning Post

But if the court says Itu Aba (it has adopted the Philippines' name for it) is indeed an island, then under the Law of the Sea the "island" will be entitled to 12 nautical miles of surrounding waters as its territory, and a 200-nautical-mile exclusive economic zone.

But in the shallow waters of the Spratly Islands, such a ruling could effectively knock out many of the Philippines' territorial claims too.

Taiwan insists Itu Aba can sustain life, and to prove it has stationed roughly 200 coast guard and scientists there, while also shoring up land for an airstrip there to fly in supplies.

Should the court's judgement rest on the conditions on Itu Aba now, as opposed to before human habitation, that will have interesting consequences for what has been the most contentious aspect of China's recent island-building actions.

3. 'Tourism appears unlikely'

China has been terribly busy in the past couple of years constructing a series of what movie fans would recognize as the arch-villain's hideouts - except that it makes little effort to keep these artificial islands secret.

Coral atolls in the South China Sea have been transformed into airfields, with dozens of storage sheds and dredged sand cutting deep ports.

In more sinister developments, China has also stacked weapons, radar towers and other military hardware on reclaimed land. In April, a military aircraft landed on one artificial island.

China's construction has been widely condemned; Australia's defense chief queried the need, dryly observing that "tourism appears unlikely".

The Philippines has asked the court to rule that Mischief Reef, Subi Reef and Fiery Cross Reef, among others that have been occupied by China and substantially transformed, should not qualify as islands but are actually just rocky outcrops which are only visible at low tide.

While that was true a couple of years ago, before China's construction work began, it's a 50-50 question which way the court might rule, and whether its decision will rest on the situation then or now.

The US has dispatched warships to sail inside the 12-nautical-mile zone around China's artificial islands, just to reinforce the point that Washington does not recognize the surrounding waters as sovereign territory.

A heated debate has erupted about whether Australia should also undertake these "freedom of navigation exercises", either with a vessel or by flying a patrol jet nearby.

The Philippines also wants the court to rule on China's aggressive behavior, especially around Scarborough Shoal, which China seized in 2012 and where it has sent its coast guard to harass foreign fishing vessels.

Scarborough Shoal is roughly 350 kilometers from Manila, yet more than 900 kilometers from China's mainland.

The court has also been asked whether Beijing has breached environmental obligations. Curiously enough, this includes Second Thomas Shoal, where the Philippines deliberately ran aground a rusty navy ship to serve as a military outpost, which China has often frustrated attempts to resupply.

4. The wild card

The US has deliberately fanned expectation about the upcoming court ruling, knowing that international diplomacy only ever produces a few tangible moments that register in the public mind as definitive.

But despite the hype, the ruling will not end the South China Sea stand-off.

China has already pledged to ignore the ruling, and has been busily attempting to gather its own motley crew of international supporters.

The US emphasis (echoed by Australia) is to solve the dispute through the "rules-based order", given that both the Philippines and China have ratified the United Nations Convention on the Law of the Sea.

But the US never has, which Malcolm Turnbull has warned diminishes Washington's leadership.

China is also permitted, under law, to exempt itself from arbitration - just as Australia has done in its maritime boundary dispute with East Timor.

What is really at stake here is who gets to enforce the rules and the age-old question of might versus right.

China insists the South China Sea dispute should be resolved country-to-country, without allowing pesky jurists to get in the way. This conveniently ignores its massive preponderance of power over its near neighbors.

But there is a wild card.

The Philippines has a new president, Rodrigo Duterte, with a reputation as a firebrand.

Duterte has threatened to jump aboard a jet ski to Scarborough Shoal to assert the Philippines' claim.

But he has also flagged a more conciliatory attitude towards Beijing.

China has turned on the charm since Duterte won election in May, with reports that Filipino fishermen are increasingly permitted to fish unhindered near Scarborough Shoal in the past few weeks.

"If it goes on still waters, I said, [if] there's no wind to move the sail, I might opt to go bilateral," Duterte said he told Barack Obama, one of several cryptic comments that leave analysts wondering what action he might take after the ruling.- The Sydney Morning Herald


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