You’d think that rewarding China’s dredging sector would be the last thing the Philippines wants to do. After all, in recent years Chinese dredging ships have been an unwelcome presence in parts of the South China Sea near the Philippines, helping to build islands atop reefs that then became Chinese military bases, complete with runways and ports.
Yet one outcome of a state visit by Philippine president Rodrigo Duterte to Beijing last week is a large contract for China’s state-owned CCCC Dredging, a company reportedly involved in just such island-building. The company will create four artificial islands off the coast of Davao City, where Duterte served as mayor for years before becoming president in late June.
China’s state-owned People’s Daily reported on the deal this week, saying that the project was a “model for future cooperation between the two nations,” and will produce about 200 hectares of land for new residences, businesses, and government offices, as well as ports and industrial parks.
It didn’t mention Mischief Reef, a particularly galling example of the South China Sea island-building that the company was reportedly involved with (paywall). In mid-July an international tribunal ruled that by building an island there, China violated the UN Convention on the Law of Sea: The project infringed upon the Philippines’ sovereign rights in its exclusive economic zone, caused “permanent, irreparable harm” to the coral reef ecosystem, and “permanently destroyed evidence of the natural condition of the features in question.”
In its natural state Mischief remains below water except at low tide. A look at satellite images shows it’s now a sprawling piece of land dotted with runways, hangars, and construction projects.
Late last year CCCC Dredging delayed a $1 billion IPO (paywall) in Hong Kong in response to questions about its involvement in the controversial South China Sea island-building projects. Earlier in the year, surveillance photos revealed one of its ships at Mischief Reef.
The company is a subsidiary of China Communications Construction Company (CCCC). In 2011 the World Bank barred CCCC and its subsidiaries from road and bridge projects until 2017, citing fraudulent practices—at a project in the Philippines.