Published on Oct 25, 2023
Lines in the water: The trajectory of the South Korea-Japan Joint Development Zone

The South Korea-Japan Joint Development Zone (JDZ) is a geopolitical initiative aimed at fostering cooperation between South Korea and Japan in the maritime domain to mitigate tensions and promote joint economic development in the region. The JDZ in the East China Sea harbours considerable potential and concerns for both South Korea and Japan, and the broader Northeast Asian region as well. One of the primary prospects of the JDZ lies in its estimated substantial reserves of hydrocarbons, particularly oil, with the agreement allowing both countries to jointly explore and exploit resources in a defined area, thereby, potentially bolstering their energy security and economic interests. The JDZ also holds strategic importance beyond its resource potential as a crucial maritime access, especially for South Korea.

One of the primary prospects of the JDZ lies in its estimated substantial reserves of hydrocarbons, particularly oil, with the agreement allowing both countries to jointly explore and exploit resources in a defined area, thereby, potentially bolstering their energy security and economic interests.

From a broader geopolitical perspective, the JDZ has implications for the larger Indo-Pacific region. It signals an attempt by regional actors to find peaceful solutions to longstanding maritime disputes, thereby contributing to stability and security in the area. However, it is important to note that the JDZ is not without its challenges, with historical grievances and contemporary political tensions continuing to influence the dynamics between South Korea and Japan. Nonetheless, an estimation of the status and implications of the JDZ becomes pertinent in the context of recent administrations in both countries directing their efforts towards the improvement of bilateral ties.

The Joint Development Zone: An overview 

The South Korea-Japan JDZ is an area in the East China Sea—which has been jointly administered by Japan and South Korea after a treaty concerning the “joint development of the southern part of the continental shelf adjacent to the two countries (with map, appendix, agreed minutes and exchanges of notes)”—was signed in Seoul on 30 January 1974. Also referred to as “Sector 7”, the JDZ agreement facilitates joint exploration and exploitation of petroleum resources in the southern part of the continental shelf adjacent to the two countries. The area occupies a continental shelf that makes up about 82,000 sq. km. of South Korea, or 80 percent of its total land area. Because of estimations that the area had more oil reserves than Saudi Arabia, Sector 7 had caught the imagination of the two countries and the popular imaginations of its people, even inspiring songs like ‘Black Pearl in Sector 7’.

Divided into nine subzones by the agreement, each subzone in the area was allotted one “concessionaire” from both parties, who were given the right to recommend actions to establish equal taxation, exploration, and exploitation within the ambit of Articles 3 and 4. Article 31 of the agreement provides for the possibility of ending the JDZ after 50 years (in 2028) if either country gives the other a three-year notice of its intention to do so. Until 1992, there were three joint attempts at exploration activities since 1979, which were unsuccessful, after which the joint activities reduced. The year 2010 marked the last joint activity by Japan, and between 2009 to 2017, Japan did not delegate any concessionaires to any subzones.

Divided into nine subzones by the agreement, each subzone in the area was allotted one “concessionaire” from both parties, who were given the right to recommend actions to establish equal taxation, exploration, and exploitation within the ambit of Articles 3 and 4.

The JDZ is estimated to be a hotbed of estimated 9,000-trillion won (approximately US$ 6.8 trillion) worth of oil reserves, which remain unexplored due to a lack of cooperation in the recent decades from both countries. China has been taking advantage of this discord since 2008 by agreeing to work with Japan to develop similar oil reserves bordering the JDZ by excluding the Republic of Korea. Since then, over the past decade, there has been an increased security risk due to confrontation over maritime governance and transit between Japan and China. Constant friction over territorial violations and military activities has led to a gloomy and confusing scenario of strategic relationships over the exploration of the JDZ. Nonetheless, earlier this year in May, a new “Hotline between Japan-China Defense Authorities” was established as a viable method of communication for the exchange of information and crisis mitigation.

Based on the median line formed in the sea between the two nations through the previous Korea-Japan fishing agreement, there are arguments that Tokyo might attempt to claim a majority of Block 7 when the agreement expires. However, while this is unlikely, there are speculations that China, which is awaiting the conclusion of the Korea-Japan agreement, may go forward to develop it.

South Korea claims that the seabed and subsoil of the East China Sea form a continuous continental landmass extending from its coast.

Moreover, China, South Korea, and Japan’s Exclusive Economic Zone (EEZ) and continental shelf claims overlap in the East China Sea, with Seoul and Beijing both claiming continental shelves that extend beyond 200 nm in the East China Sea. South Korea claims that the seabed and subsoil of the East China Sea form a continuous continental landmass extending from its coast. In its partial submission to the Commission on the Limits of the Continental Shelf (CLCS) for a portion of the outer limits of the continental shelf, South Korea renewed its claim in some parts up to 350 nm. China also uses natural prolongation justifications in the East China Sea. The principle of natural prolongation of the continental shelf is when countries hold total sovereignty throughout the territory that extends below the sea to the edge of a geomorphic continental shelf. In 2012, China submitted to the CLCS its claims that the outer limit of its continental shelf extends to the Okinawa Trough (beyond 200 nm from China’s baselines). Its claims were based on the principle of natural prolongation, which may permit a continental shelf to be extended beyond 200 nautical miles.

The future of the JDZ 

The future of the JDZ is critical since the potential dissolution of the JDZ could alter the regional security dynamics significantly. If Japan were to claim the JDZ post-expiration, it could significantly hamper South Korea’s access to global trade and naval power projection capabilities, posing a security risk for a nation heavily reliant on trade. Additionally, the dissolution of the JDZ may affect the regional security dynamics involving China, as it could potentially drive a wedge into the trilateral security cooperation among South Korea, Japan, and the United States (US). Recent diplomatic efforts under South Korean President Yoon Suk-Yeol and Japanese Prime Minister Kishida Fumio aimed at reconciling historical grievances and future collaborative efforts between the two could serve as a foundation for cultivating trust among other countries within the region and contribute to a more stable Indo-Pacific.


Pratnashree Basu is Associate Fellow at Observer Research Foundation

Ivy Das was a Research Intern at Observer Research Foundation

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