Risks Ahead in the South China Sea

January 06, 2015 0 Comments Bloggies by Graham Penrose

by John-Clark Levin & Graham Penrose, TMG Corporate Services (Intelography), January.04, 2015

MADRID –- The past year has seen a bold new round of provocations in the South China Sea, where the People’s Republic of China is trying to expand its regional hegemony. The central issue is territorial. According to the United Nations Convention on the Law of the Sea, nations can claim exclusive economic rights in waters up to 200 nautical miles off their coastline. Where these zones would overlap, claims generally go to the nearest state.

According to these principles, most of the economically vital South China Sea is shared between Vietnam, China, Taiwan, Malaysia, Brunei, and the Philippines. But China claims the Spratly islands, a rocky and unpopulated archipelago deep inside the Philippines’ exclusive economic zone (EEZ)—and the Paracel islands, a group of reefs and islands close to Vietnam.

According to Beijing, its EEZ projects from both island chains, which puts almost the entire South China Sea in Chinese hands. At stake is strategic control of sea lanes that carry an estimated $5.3 trillion in annual trade, highly lucrative fishing stocks, and promising oil and gas resources. Although most of the South China Sea’s proven reserves lie in undisputed areas, the U.S. Geological Survey estimates that about 2.5 billion barrels of oil and 25.5 trillion cubic feet of natural gas may be available around the Spratlys.

In addition to these economic incentives, the dispute is also motivated by China’s aspirations to assert itself as the preeminent power in Asia. China’s latest tactics have serious security consequences for everyone with an interest in the South China Sea. Not content to pursue its dispute through lengthy lawsuits and international arbitration, Beijing is attempting to gain an advantage by changing the “facts on the ground.”

That is, by gaining effective control over disputed areas, China can strengthen its legal position in the sense of the old saying “possession is nine tenths of the law.” If it can actively exploit the disputed zones and convince world markets to accept its claims, other nations’ legal objections will be largely moot. China is working to establish such control by a combination of unilateral resource grabs and confrontational moves against rival militaries in the region.

On January 1 of last year, China instituted new rules requiring foreign fishing vessels to obtain permits in order to fish in much of the South China Sea. The move drew criticism from Vietnam, the Philippines, and the United States, but none were in a position to force the Chinese to back down. In an excellent analysis the following month, analyst Robert Haddick called out Beijing for pursuing a policy of “salami-slicing”.

The metaphor contextualizes the new fishing restrictions as part of a larger pattern of incremental moves that included the sudden establishment of a Chinese city on Woody Island in the Paracels in July 2012, and the declaration of an Air Defense Identification Zone over the East China Sea in November 2013. In 2014, Chinese survey vessels have reportedly been operating discreetly in the Philippines’ EEZ, likely to gain a better sense of the petroleum resources that might be available there. Beijing was clearly betting that no single step would be enough for its neighbors to risk armed conflict—but that collectively, they would achieve China’s goal of controlling the South China Sea.

In the months that followed, the salami-slicing continued. In March 2014, Chinese Coast Guard vessels turned back a pair of ships sent by Manila to reprovision Filipino troops stationed on a disputed outpost in the Spratlys. Then in May, China set up a billion-dollar oil rig unannounced in disputed waters off Vietnam, surrounded by a flotilla of protective ships from the Chinese Maritime Police Bureau.

Vietnamese vessels went out to meet them, leading to several days of vigorous clashes between the two sides, using water cannons and ramming actions. In June, Hanoi released video of a Chinese vessel ramming a Vietnamese fishing boat that soon sank. China appears not to have suffered any comparable losses. In July, China unilaterally withdrew the rig— stating that it had completed its exploratory mission — but Vietnam would have been in no position to prevent it from staying.

Then, in August, a Chinese fighter intercepted an American reconnaissance plane over the South China Sea, performing abrupt manoeuvres perilously close to the U.S. aircraft. This risked a repeat of the 2001 incident off Hainan Island where such a mid-air collision led to a diplomatic crisis after the crew of the crippled American plane was interned on Chinese soil for 11 days. Instead of sober reflection, Chinese Rear Admiral Zhang Zhaozhong exhorted his pilots: “A knife at the throat is the only deterrence. From now on, we must fly even closer to U.S. surveillance aircraft”.

This combination of brinksmanship and salami-slicing by incremental and escalating actions is dangerous indeed. The worst-case scenario, of course, is a full-on armed confrontation—but both the Chinese and their opponents realize that war would be catastrophic. Much more likely is a steady drumbeat of small grabs that pose risk to those wishing to do business in the South China Sea.

In 2012, China National Offshore Oil Corp invited foreign companies to bid on nine oil exploration blocks within Vietnam’s internationally-recognized EEZ, apparently including some areas which had already been leased out by Vietnam. While major firms like Exxon Mobil have so far avoided wading into the disputed zones, and will likely continue to do so, smaller players with less to lose have expressed interest. In comparison, around the same time, the Philippines invited bidding on two oil blocks in disputed territory, but received rather little interest.

Going forward, how oil and gas companies invest their money will send a strong signal about who is winning the struggle for the South China Sea. Those who lease disputed blocks from Vietnam or the Philippines are betting that China will ultimately bow to pressure by the United States and its allies in the region. Those who lease from China are betting that Beijing’s grabs will prove irreversible.

Whatever firms bet, there will be more provocations. Survey ships and drilling platforms can expect to be harassed by the other side, and company personnel and equipment may be endangered by the struggle going on around them. Some firms will likely hire private security vessels for protection. Although such forces would be no match for Chinese warships in an armed confrontation, their presence would make it riskier and more difficult to drive away client assets. Armed guards aboard platforms could be employed as an additional deterrent.

This poses serious risks, though—untrained private security could instigate a clash by mistake, and even a small spark in the South China Sea has the potential to escalate to international conflict. Further, the 100 Series Rules for the Use of Force, which were developed in 2013 to provide broad guidance for private maritime security companies, are intended for actions against pirates, and would not provide sound guidance for potential standoffs with state actors. For companies wishing to hire security, then, retaining only the most experienced and professional private maritime security companies must be a priority.

About John-Clark Levin is an author and maritime security expert, currently pursuing his research at Harvard University. He has written for publications such as the Wall Street Journal, Southern Economic Journal, Pacific Maritime Magazine, and War on the Rocks. He has lectured on the subject of private maritime security at institutions such as Johns Hopkins University, Georgetown University, the Center for Security Policy, and the U.S. Naval War College.
About Graham Penrose is the owner of TMG Corporate Services, Intelography & JGE Kinetics: Established in 1994 TMG Corporate Services serves clients in Europe, the USA, Asia-Pac and Africa providing Private Maritime Security Services; Private Military Security Services; Global Asset Tracing & Recovery; Security & Risk Management; Specialist Surveillance Services; Counter & Anti Surveillance Services; Human Intelligence (HUMINT); Open Source Intelligence (OSINT); Close Protection Services; Digital Forensics, Image Enhancement & eDiscovery and HEAT (Hostile Environment Awareness Training). JGE Kinetics sources and supplies - under license / EUC - armaments, armoured vehicles, surveillance equipment, UAV drones and military communications equipment.
About Intelography: Intelography offers subscription based access to risk profiling, threat assessments and security trends for Europe, the Middle East and Africa. Providing content and insights that allow organizations to inform the process of reacquiring, recommissioning, maintaining and protecting (physical and human) assets in conflict, post conflict or high risk areas. Content and analysis includes contributions from staff analysts, internationally recognized subject matter experts, guest contributors, content syndication from established industry observers and service providers, thought leaders, complimented by an extensive network of in country contributors (Israel, Libya, Egypt, Syria, Iraq, Afghanistan, Pakistan, India, CIS, Ukraine, Russia, the Balkans, West Africa). Subscription pricing varies according to access requirements and is offered on an ad-hoc, region specific or global access basis. Additional services include one-to-one analyst Q&A's, workshops, consulting, and re-publication rights.

1. http://www.cfr.org/world/armed-clash-south-china-sea/p27883
2. http://www.eia.gov/countries/regions-topics.cfm?fips=scs
3. http://www.reuters.com/article/2014/03/06/us-china-parliament-seas-idUSBREA2512I20140306
4. http://warontherocks.com/2014/02/america-has-no-answer-to-chinas-salami-slicing/#_
5. http://world.time.com/2012/07/24/chinas-newest-city-raises-threat-of-conflict-in-the-south-china-sea/
6. http://www.nationmultimedia.com/opinion/Energy-competition-in-South-China-Sea-A-front-burn-30243078.html
7. http://globalnation.inquirer.net/100159/dnd-confirms-report-on-expulsion-of-ph-vessels-by-chinese-ships
8. http://www.nytimes.com/2014/05/10/world/asia/in-high-seas-china-moves-unilaterally.html? module=Search&mabReward=relbias%3Ar%2C%7B%221%22%3A%22RI%3A11%22%7D&_r=0
9. http://www.bloomberg.com/news/2014-06-05/vietnam-says-china-still-harassing-boats-shows-video-of-sinking.html 10. http://www.nytimes.com/2014/07/16/world/asia/chinese-oil-rig-near-vietnam-to-be-moved.html
11. http://www.bbc.com/news/world-asia-china-28905504
12. http://fas.org/sgp/crs/row/RL30946.pdf
13. http://uk.reuters.com/article/2014/08/28/uk-china-usa-military-idUKKBN0GS2M920140828
14. http://www.bloomberg.com/news/2012-06-27/vietnam-calls-on-cnooc-to-scrap-bid-to-explore-oil-off-coast-1-.html

NSFW: The Siege of Kobanî by the Islamic State (ISIL / ISIS): Situation Report (Warning: Graphic Content)

November 30, 2014 0 Comments Bloggies by Graham Penrose

The YPG and YPJ are engaged in a fierce fight today with ISIS who have opened up a fourth front in the battle by launching attacks from the previously "safe" Turkish side of the town. It is unclear how ISIS can have been facilitated in this new strategy by a "member" of NATO, seemingly allowing ISIS launch an attack on the beleaguered town from within Turkish territory. The town and its brave defenders have unbelievably been under international political and economic embargo for three years.

19th Century Hausa & Fulani Jihadi's inspire Boko Haram

October 13, 2014 0 Comments Bloggies by Graham Penrose

Boko Haram was founded in 2002 by Mohammed Yusuf, a Muslim cleric and Wahhabi theologian who created a school promoting radical Islamic principles (United States Institute of Peace, 2012). The derivation of Boko Haram translated means “Western education is a sin” (Owolade, 2014).

Under Yusuf’s leadership, Boko Haram furthered its radical agenda with a bloody campaign of violence against rural communities. (Ndege & Essa, 2013). After Yusuf died in police custody in 2009, Abubakar Shekau rose to power and continued to spread the sect’s extremist philosophies. (Dorrell, 2014). Violence increased after the 2010 election of President Goodluck Jonathan, a Southern Christian (Owolade, 2014).

Thailand's coup – a serious threat to stability in Myanmar and Cambodia

October 11, 2014 0 Comments Bloggies by Graham Penrose

In late May 2014 the Thai military seized power in a widely anticipated coup by the hawks who have been hinting at same for some time now. This is the twelfth coup in Thailand since the end of the absolute monarchy in 1932 (BBC, 2014) and the army justified their intervention on this occasion for the need to stabilize the volatile political situation.

Thailand has been in turmoil during recent years and the already tense situation – where two sides kept rallying against or for the government – began to escalate in November 2013 when MPs approved a controversial bill which would help former Prime minister Thaksin Shinawatra avoid prison on corruption charges. The situation worsened in May 2014 when the Constitutional Court removed PM Yingluck Shinawatra from power. (BBC, 2014)

Libya unchecked - haven & base for extremists to poison the region

October 09, 2014 0 Comments Bloggies by Graham Penrose

In February 2011, English photographer Charlie Waite had just finished a month long assignment across Libya capturing some of the country’s most iconic sites in a peaceful tranquil atmosphere. Less than two days after his departure, civil war had erupted (Kingsley, 2014). Libya has been in state of violent flux since then, long-term leader Muammar Gaddafi in power since 1969 was killed in October 2011, the National Transitional Council promptly declared Libya to be officially ‘’liberated’’ and on the road to ‘’democracy’’ (BBC, 2014).

Lacking the hard edge - academics alone will always fail in asset recovery efforts

September 29, 2014 0 Comments Bloggies by Graham Penrose

Using academics to locate missing or looted monies from current or post conflict zones makes sense – for part of the problem – namely forensic accounting, unravelling complex financial structures and corporate cloaking mechanisms like trusts and offshore havens. However giving the same academics the responsibility for actioning the recovery strategy informed by this analysis is flawed.

They do not possess the dealmaking, “street smarts”, mediation, negotiation, fixer, logistical, operational or in-country savvy to succeed on the ground.

VICE NEWS: The War That Never Ended: Russian Roulette (Dispatch 53)

July 03, 2014 0 Comments Bloggies by Graham Penrose

Not long after a so-called ceasefire ended in eastern Ukraine Monday night, the Ukrainian military sent a column of artillery into Sloviansk and officially began its offensive. The Russian and Ukrainian governments, along with representatives from the OSCE, called for a new effort to establish another ceasefire, setting a deadline of Saturday for the resumption of talks. For now, however, the war continues.

VICE News correspondent Simon Ostrovsky traveled around the outskirts of the city and visited several checkpoints where soldiers were preparing for what's to come.

This report contains graphic images.

Dispelling The Wild West Perception Surrounding PMSC's

June 24, 2014 0 Comments Bloggies by Graham Penrose

The challenges in setting up a Private Military Company or when a firm is being employed as Privately Contracted Armed Security Personnel are more associated with the international compliance requirements rather than national ones, as the expectations are set and monitored by international bodies rather than by sovereign states - in order to avoid problematic local interpretations with respect to human rights and IHL (International Humanitarian Law) compliance.

International Code of Conduct for Private Security Service Providers

June 18, 2014 0 Comments Bloggies by Graham Penrose

The International Code of Conduct for Private Security Service Providers (ICoC) is a Swiss government convened, multi-stakeholder initiative that aims to both clarify international standards for the private security industry operating in complex environments, as well as to improve oversight and accountability of these companies. Based on international humanitarian and human rights law, the Code was developed through a transparent and inclusive multi-stakeholder process. Full details on the process are available in the ICoC Timeline.

The Code sets-out human rights based principles for the responsible provision of private security services. These include rules for the use of force, prohibitions on torture, human trafficking and other human rights abuses, and specific commitments regarding the management and governance of companies, including how they vet personnel and subcontractors, manage weapons and handle grievances internally.

Privately Contracted Armed Security Personnel - Rules for the Use of Force

June 05, 2014 0 Comments Bloggies by Graham Penrose

The 100 Series Rules™

The 100 Series rules have been developed for the benefit of the entire maritime industry and under-pinned by a thorough public international and criminal law legal review using an objective international law test of what is "reasonable and necessary" when force is used, as a lawful last resort, in self-defense.

Piracy in the Indian Ocean still threatens

May 23, 2014 0 Comments Bloggies by Graham Penrose

Recently the owner of an Algerian cargo ship whose crew was held by Somali pirates paid them $2.6 million in ransom. This is another indication that the rewards that these perpetrators reap for their illegal activities remain a serious stumbling block to ending maritime organised crime. Piracy in the Indian Ocean still threatens. As the following clip demonstrates the outcome for the pirates in recent times has been less satisfactory than the freedom that they enjoyed in the late 90's and early 00's when many vessels were largely unprotected from these type of attacks. Although many incidents still occur today the percentage of successful outcomes for pirates has been dramatically reduced as a result of the use of private maritime security firms and the co-ordinated international naval response by way of increased patrols in the worst affected areas.


Marine asset recovery operations are challenging

May 20, 2014 0 Comments Bloggies by Graham Penrose

TMG Corporate Services / The Mediator Group are veterans of the maritime asset recovery industry. However, marine repossessions are always complex events made even more so by the myriad bespoke legal issues which present themselves when conducting operations in international waters. Research, preparation and co-ordination play a key role in identifying the likely new and before unseen circumstances that each new operation presents. Normally the act of surveillance in the form of spotters and site / locality appraisal when combined with pre-event liaison with the relevant local and regional law enforcement and/or military authorities, other cargo interests, consulates, port authorities and insurers (Professional Indemnity, Belligerent Acts, Wilful Acts) can identity and design out the unique challenges on each new assignment.

Boko Haram are out of control in Northern Nigerian states

May 07, 2014 0 Comments Bloggies by Graham Penrose

The Congregation of the People of Tradition for Proselytism and Jihad (Arabic: جماعة اهل السنة للدعوة والجهاد , Jamāʻat Ahl as-Sunnah lid-daʻwa wal-Jihād) better known by its Hausa name BOKO HARAM (pronounced [bōːkòː hàrâm], "Western education is sinful") is an Islamic jihadist and takfiri militant and terrorist organization based in the northeast of Nigeria, north Cameroon and Niger.

Ukraine accuses Russia of inciting riots

May 04, 2014 0 Comments Bloggies by Graham Penrose

Ukrainian Prime Minister Arseny Yatseniuk accused Russia on Sunday of engineering clashes in Odessa that led to the deaths of more than 40 pro-Russian activists in a blazing building and pushed the country closer to civil war. Friday's clashes were the most deadly since Moscow-oriented president Viktor Yanukovich was forced to flee in February and pro-Russian militants launched uprisings in the industrial east.

Ukraine - Military assault in progress in Slovyansk

May 02, 2014 0 Comments Bloggies by Graham Penrose

Government troops are mounting a military assault in an attempt to retake control in Slovyansk today. Vyacheslav Ponomarev, the insurgency-appointed mayor of Slovyansk, said self-defence forces had shot down two helicopters and taken one pilot hostage. He said no Ukrainian troops could be seen in the city.

Global assistance for debt book workouts

April 07, 2014 0 Comments Bloggies by Graham Penrose

TMG Corporate Services / The Mediator Group act for clients in the specialist areas of debt book work outs, risk analysis, cost benefit analysis and valuations including debt book purchase Return on Investment assessments and due diligence. In addition the following services assist our clients in realizing maximum value from their investments:

  • Pre-liquidation & insolvency related information gathering including asset value estimates & recovery cost analysis;
  • Insolvency related asset identification and recovery analysis;
  • Toxic debt asset recovery for high ticket assets;
  • Contested repossessions / hidden asset recovery / confrontational recovery environments;
  • Recovery of stranded and/or misappropriated assets;
  • High risk operational environments and conflict zones;

TMG Corporate Services / The Mediator Group plans and executes all assignments following the operating procedures outlined below as required: