Thursday, March 12, 2009

The Battle for Serpent Island

Alex Jackson

On February 3, the International Court of Justice (ICJ) gave its ruling on a long-running dispute between Romania and Ukraine over the delimitation of the Black Sea, and the oil and gas reserves that lie beneath it. The ruling, which although marketed as a compromise essentially favoured Romania, was intensely politicised in both countries. Indeed, it has already claimed one scalp in the form of Ukrainian Foreign Minister Volodymyr Ohryzko who was criticised for, inter alia, his poor handling of the Black Sea dispute.

The Background

The dispute originated after the Second World War, when Serpent Island, a 0.17 km2 speck off the Danube delta, was omitted from the Paris peace treaties which reshuffled territory after the Axis collapse. The island was nominally under Bucharest’s control until 1949, when a technical document – not, it should be noted, an official treaty - on border delimitation ceded the island to Soviet control. This document did not, however, deal with the matters of an exclusive economic zone (EEZ) or the continental shelf around the island. Negotiations over the official maritime boundary continued until 1991, when the USSR’s place in the talks was taken by newly-independent Ukraine, with an intensive new delimitation process begun in 1998. The matter was finally taken to the ICJ in 2004.

The significance of Serpent Island lies in its status. If, as Kiev claimed, it was indeed an island, then Ukraine would control 370km of open sea around it. Since the island lies more or less parallel to the land boundary, this claim would have given Ukraine access deep into what Romania viewed as its waters. Romania claimed that Serpents Island was merely a rock, and thus was not a factor in maritime delimitation. Energy gave the dispute additional importance. The 12,000km2 contested area is estimated to hold around 100 billion cubic metres (bcm) of natural gas, and 10 million tons of oil equivalent– the dispute has so far prevented anything but tentative exploration of the deposits.

The Ruling

The sides disagreed on whether or not the 1949 document did delimit the maritime boundary around Serpent’s Island in a 12-mile arc, as claimed by Romania. This was significant, since in subsequent treaties (as recently as 2003) the two sides had agreed to accept previous demarcation documents and protocols. The ICJ ruled that the 1949 agreement, despite confusion in the original sketch maps, did support Romania’s case.

The crux of the matter, the relevance of Serpent’s Island to the formation of an EEZ and continental shelf entitlements, also went in Romania’s favour. The ICJ stated that whether or not it constituted a ‘rock’ or an ‘island’ was essentially irrelevant: the areas subject to delimitation were already within the EEZ and continental shelf generated by Ukraine’s mainland coasts, and so Serpent’s Island would be unable to add to them. Furthermore, since the southern edge of the area to be delimited had already been agreed upon, no entitlements arising from Serpent’s Island could have affected the southern line.

The ICJ assessed other relevant circumstances, such as pre-existing conduct (Ukraine claimed that its oil licensing and exploration activities – which were uncontested by Romania at the time – should be taken as a post facto justification of its claim) and security requirements, but found no reason to adjust the provisional boundary line which it had drawn up initially (see Map 1). The ruling gave Romania nearly 80% of the contested area.

The Implications

The ruling was greeted with understandable satisfaction in Bucharest, and the Romanian Prime Minister, Emil Boc, congratulated his foreign ministry on its efforts in the negotiations. Officials in Kiev were more downbeat, although they accepted the ruling as a ‘wise compromise’, although this did not stop the Deputy Foreign Minister expressing his frustration that the ICJ had disregarded Serpent’s Island. The Communist Party also demanded that the Prosecutor-General file charges of ‘high treason’ against relevant officials, including President Viktor Yuschenko. The angry response from nationalists, and the sacking of Foreign Minister Ohryzko, illustrates the current volatility of Ukraine’s politics.

The loss of oil and gas concessions will be a bitter blow for Kiev’s struggle to free itself of dependence on Russian gas. Relations between the two states soured after the Orange Revolution in 2004 brought a clutch of pro-Western politicians, including Mr. Yuschenko, to power. Ukraine’s moves towards the West, and particularly NATO, further angered Russian nationalists, for whom Ukraine is an integral, historic part of Russia. Relations hit a new low in January, when Moscow turned off the gas flow to Ukraine, officially for unpaid bills, but the highly visible role of Prime Minister Putin in the dispute clearly demonstrated the tangled nexus between business and politics. Without Black Sea gas deposits to develop – even if Kiev had the finances to do so, which is currently not the case – Ukraine will continue to rely on Russian gas.

For Bucharest, the decision constitutes a clear victory. Quite aside from the oil and gas deposits, which may be too deep to be financially viable with current energy prices, the ICJ ruling will be interpreted by the government as ‘a triumph for Romanian diplomacy’, in the words of Mr Boc. The ruling will help to increase Romania’s stock among EU diplomats sceptical of corruption and political deadlock. But perhaps such scepticism is warranted, after all: in the aftermath of the ICJ ruling, a scandal broke in Bucharest over the role of the previous administration in allegedly granting concession rights to a Canadian energy firm. Mr Boc has threatened to revoke the agreements, and the head of the natural resources agency, Bogdan Gabudeanu, has been sacked. The ICJ victory may just be the start of a new political fight.

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