High stakes in Sulawesi Sea

KL, Jakarta caught in a bind over sovereignty issue, this time involving oil.

IT IS deja vu.

For almost three decades, Indonesia and Malaysia have gone head to head over territorial claims in the same seas.

The last dispute – resolved eventually by international adjudication – was over control of Sipadan and Ligitan, two small rocky outcrops off the east coast of Borneo.

Both have no intrinsic commercial value to Indonesia, but strong nationalist underpinnings – compounded by the humiliating loss of East Timor in 1999 – made it imperative for Jakarta to cling on to them with the argument that they had historically been part of the sprawling archipelago of 17,000 islands.

Fast forward to 2005.

This time, there is more than sovereignty at stake. The disputed region, off the coast of Malaysia’s Sabah state and Indonesia’s East Kalimantan province, is rich in oil deposits.

The trigger for increased tension was a decision last month by Malaysia’s national oil company Petronas to grant a local subsidiary of Dutch energy giant Shell a concession in the region.

It covers production-sharing contracts for deep-water oil exploration in two blocks located east of Borneo. Shell Malaysia is said to have interests in 17 deep-water oil blocks in East and West Malaysia.

Indonesia, on the other hand, has been granting oil concessions in the Sulawesi Sea to various oil companies, including Shell, since the 1960s in accordance with what it argues is its internationally recognised territorial rights.

Last November, it awarded a production-sharing agreement contract to American firm Unocal to explore and exploit oil and gas in the East Ambalat block, located in the same disputed waters.

The oil blocks are near the Sipadan and Ligitan islands, disputed for years between Malaysia and Indonesia. The International Court of Justice at the Hague handed Malaysia sovereignty over the islands in 2002.

The root cause of the problem then – and today – is different interpretations of the map.

Jakarta has long based its proof of ownership on the area on the Anglo-Dutch Convention of 1891. The treaty clearly demarcated the territories of the Dutch and British by drawing a boundary line extending eastwards from Borneo at the 4 degree 10′ North latitude line.

Both Sipadan and Ligitan are south of that line under their former Dutch colonial masters – something that was reflected in all maps issued until 1979, when Malaysia began to declare them as part of its territory.

The ICJ resolved the issue of ownership of the two islands in its landmark decision that made clear that Kuala Lumpur had shown ‘manifestations of state authority’ over the islands since the 1930s.

It also found that the Dutch treaty was not conclusive of who owned the islands and the surrounding waters.

The issue of maritime boundaries has remained hazy. Indonesia claims that Malaysia’s water territory extends no more than 19km from the islands because it is not an archipelagic country.

Thus, the overlapping claims to the oil-rich area.

Like before, both Indonesia and Malaysia have sent warships and fighter planes to safeguard what each considers its fundamental interest.

For Jakarta, nationalist stirrings are even more marked today after the loss of Sipadan and Ligitan and the humiliation over the East Timor debacle.

Hawkish generals charge that Indonesia lost its sovereignty over the two islands because the previous administration of Ms Megawati Sukarnoputri did not react early to protect the claims.

Reflecting the jingoistic sentiments in the military, navy spokesman Abdul Malik Yusuf said: ‘We will not let an inch of our land or a drop of our ocean fall into the hands of foreigners.’

The boundary issue is being played out against a backdrop of other nagging issues that has led to a cooling of bilateral ties.

President Susilo Bambang Yudhoyono faces pressure on two fronts: Having to contend with popular sentiment whipped up into a nationalist frenzy, as well as hardline generals.

His public stance so far reflects this balancing act. He told Indonesian military commander Endriartono Sutarto over the weekend that the dispute should be settled peacefully, but he also underscored the ‘need to protect our sovereignty’.

The President is finding that public demands that he safeguard the country’s territorial integrity cannot be sidestepped or ignored.


‘We will not let an inch of our land or a drop of our ocean fall into the hands of foreigners.’
– ABDUL MALIK YUSUF, Indonesian navy spokesman

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