4. The Parties concerned undertake to resolve their territorial and jurisdictional disputes by peaceful means, without resorting to the threat or use of force, through friendly consultations and negotiations by sovereign states directly concerned, in accordance with universally recognized principles of international law, including the 1982 UN Convention on the Law of the Sea;
The 1982 UN Convention on the Law of the Sea, in turn, sets out international laws on nations' claims to resources located off their shores. The Convention divides offshore regions into zones, with each zone permitting a different amount of access. In the Scarborough Shoal dispute, the region at issue is the "Exclusive Economic Zone," or "EEZ," the area up to 200 miles off the coast of each nation wherein that nation has sole right to exploit the natural resources located in the ocean and on the ocean floor. Such resources can include fish, natural gas, and oil.
Besides being signatories of the Declaration, both China and the Philippines also signed and ratified the Convention, theoretically incorporating the treaty's provisions into their national laws.
The Scarborough Shoal is located less than 150 miles off the Philippine coast, and more than 500 miles away from the Chinese coast. Thus, Manila would argue that the Shoal is well inside their EEZ – and far, far from the Chinese EEZ – giving the Philippines sole claim to its resources and sovereignty over the region.
The Chinese claim is less clear cut, as it is based on historical claims, but still has teeth under international law. International law largely developed out of the customs that nations used when interacting with each other. As such, a nation that is able to show that it has long controlled a region or a resource can argue that it has established a rightful claim.