A revived maritime dispute between Indonesia and Malaysia has led to a series of chest-thumping incursions and face-offs between the two countries’ navies.

Indonesian navy patrol (CBSNews)
Indonesian navy patrol (CBSNews)

The stand-off reached its zenith, for now, after the Indonesian Navy reported Malaysian warships had entered the oil-rich Ambalat area off the Borneo coast several times over the last two weeks. The provocations almost crossed the line into conflict, with an Indonesian vessel reportedly coming close to firing at one of the Malaysian ships.

However, with both sides pointing the finger at the other, apportioning blame for the crisis is difficult. Indonesia claims that the Ambalat oil concession block, which covers about 15,235 square kilometers in the Sulawesi Sea, is an undisputed part of Indonesia, based on the United Nations Convention on the Law of the Seas (UNCLOS).

“Whoever enters the area [without permission] violates the sovereignty of the Republic of Indonesia,” TNI Headquarters spokesman Commodore Sagom Tamboen said.

Malaysia bases its counterclaim on a 1979 maritime map. And as Sam Bateman, co-author of “Good Order at Sea in Southeast Asia,” a report on maritime policy and security issues in the region by the S. Rajaratnam School of International Studies, told World Politics Review, an additional complication arises out of the International Court of Justice’s decision to award sovereignty over Sipidan and Ligitan islands to Malaysia. Bateman adds, “Even though the sovereignty issue has been settled, there has been no subsequent agreement on maritime boundaries.” The 2002 ICJ decision means that Malaysia, at least according to its own argument, might be able to alter its baseline claims to territorial waters.

Exacerbating the dispute is the area’s buried treasure, in the form of sea-bed oil reserves, with both sides trying to set up deals with multinational companies based on their conflicting claims. In 2005, Malaysia granted Royal Dutch Shell and state oil company Petronas joint rights to explore the disputed area, even though Indonesia had already given a green light to Unocal (now part of Chevron) and ENI back in 1999. Near the Ambalat border, the Aster field could also potentially produce 30,000 to 40,000 barrels of oil per day.

Malaysian Defense Minister Sri Ahmad Zahid Hamidi said the dispute on Ambalat was more an economic issue than a border dispute. “If it is only a matter of borderline, possibly it has been solved long ago,” he recently told the Malaysian media. “But there is economic potential so that we have to be serious and careful.”

On Tuesday, Hamidi sent Malaysia’s military chief Gen. Abdul Aziz Zainal to Jakarta, to suggest to his Indonesian counterpart that both countries temporarily stop maritime patrols near the Ambalat block. It was thought, however, that Indonesia would be unlikely to agree to this, as it could be interpreted as a tacit acceptance that the area is under dispute, rather than a recognized de jure part of Indonesian territorial waters.

Domestics politics in both countries could affect the outcome of the stand-off as well. Indonesia is in the middle of a three-way race for the presidency, and challengers to incumbent President Susilo Bambang Yudhoyono have not shied away from making the Ambalat dispute an election issue. During the maritime game of chicken played out over recent weeks, reports that Malaysian patrols detained and assaulted Indonesia fishermen in the area riled public opinion in Indonesia.

As a result, Yudhoyono will be unable to cede any ground on the issue, at least until the election results are in.

Meanwhile, Malaysia is undergoing arguably the most significant political upheaval in the country’s post-independence history, with the ruling Barisan National coalition facing the possibility of losing power for the first time since the state was founded. An upwardly-mobile opposition coalition might find room to exploit the issue, narrowing the government’s room for maneuver with Jakarta.

However, such disputes do not tend to escalate significantly in Southeast Asia. Moreover, Indonesia has been seeking to build itself up as a responsible international stakeholder, commensurate with its ranking as the fourth-largest country in the world measured by population. As Ooi Kee Beng of the Institute of Southeast Asian Studies put it to WPR, “This will provide both sides with a chance to show how peace-loving they are, and how good they are at settling international differences.” Encouragingly, the protagonists in this case have a history of maritime disputes, but not of going to war over them.

Bilateral and multilateral mechanisms in place should also help manage the dispute. Sam Bateman told WPR that “Among other bilateral arrangements, Indonesia and Malaysia have an [Incidents at Sea] agreement called MALINDO, which should prevent local escalation.”

The Malaysia-Indonesia Prevention of Incidents at Sea Agreement was drawn up in recognition of the complex and contentious geography where both countries meet, and the ensuing legal and jurisdictional disputes that can arise, something that is true for the broader Southeast Asian region in general.

Southeast Asia depends heavily on smooth maritime traffic and clear bilateral and multilateral arrangements for economic well-being and security. The positive impact of close cooperation can be seen most clearly in the recent reduction of once-notorious piracy levels in Southeast Asian waters. Beyond that, major powers such as the U.S., China and Japan are dependent on unobstructed passage through regional waterways. Eighty percent of China’s oil imports pass through the Straits of Malacca for example, so any potential destabilization in regional waters will be watched closely from the outside.

Close to the disputed area, the Celebes and Sulu maritime areas lack clear boundaries, requiring close cooperation between Indonesia, Malaysia and the Philippines. These waters are known havens for piracy and crime, and conduits for various Islamist terror groups such as Abu Sayyaf and Jemaah Islamiyah. An escalation of the Ambalat dispute, or failure to resolve it, could have an impact on joint efforts in other arenas, and undermine regional security and counterterrorism efforts.

Even if war over Ambalat seems unlikely, outright resolution could be equally elusive, at least in the short to medium term. Carl Thayer, professor at the University of New South Wales/Australian Defence Academy, told WPR, “I do not see any definitive agreement on conflicting territorial claims to be reached at this time. The stakes are too high — two blocks that are potentially rich in oil and gas. Rather, both sides will work out a modus vivendi and strengthen their rules of engagement to prevent any miscalculation leading to violence.”

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