Conflict Resolution Assignment

“Malaysia and Indonesia Conflict in Ambalat Block”

A. Background
Map of Ambalat Block

The Ambalat Block

Many people are not fully aware of the position of the Ambalat offshore area. Some
even do not realize that Ambalat is not an island but an offshore area as well as the
name associated with two Indonesian oil exploration blocks located in the east of
Borneo. The Ambalat offshore area referred to in this case is the overlapping area
claimed by Indonesia and Malaysia between Indonesia's existing Ambalat and East
Ambalat and Malaysia's Block ND6 and ND7.

According to discussion on this matter in an internet-based community, RSGIS

Forum, Ambalat is a block roughly located in area within the coordinates of
118°15'21" - 118°51'15" E and 2°34'7" - 3°47'50" N. This means Ambalat extends
approximately 65 km from West to East and 135 km from South to North.
The History of Indonesia-Malaysia Boundaries
Before stepping into Ambalat case, it is necessary to briefly look back into the history
of Indonesia-Malaysia boundary. Discussion on boundary of the two states,
undoubtedly, cannot be separated from the colonial history of the Great Britain and
the Netherlands over Borneo Island long time before the independence of Malaysia
and Indonesia.

The 1891 Convention is a convention between The Great Britain and the Netherlands
to divide Borneo Island into two regions: the northern part belonged to The Great
Britain and the southern part was the Netherlands’. Since the independence era,
Malaysia has been the successor of Britain and Indonesia has been continuing the
Netherlands’ regime. In defining their boundary, especially land boundary, both
countries have to refer to the 1891 Convention agreed by The Great Britain and the
Netherlands.

Land boundary between Indonesia and Malaysia is clear since the convention has
clearly defined the line. The line crosses the latitude of 4° 10’, approximately 450 km
north of equator. Unfortunately, the line stops at the eastern edge of Sebatik Island, so
that the ownership of small islands and area located in the East of Sebatik is unclear.
This is one of the problems causing Indonesia “loss” two islands, Sipadan and Ligitan
in 1992.

Both Indonesia and Malaysia have been ratified United Nations Convention on the Law Of
the Sea/UNCLOS 1982 part IV. This convention defines Indonesia as archipelagic state
which have different maritime zone measured, different with Malaysia as the coastal state.

Maritime zones are measured from relevant baselines to a specified distance in the unit of
nautical miles (NM), according to the type of maritime zone under consideration. The LOSC
established the following maritime zones, each of which varies in the degree of exclusive
rights and control afforded to a coastal state: internal waters (landward of baselines);
archipelagic waters (within archipelagic baselines); territorial sea of up to a distance of 12
NM from baselines, contiguous zone up to 24 NM, Exclusive Economic Zone (EEZ) up to
200 NM and Continental Shelf usually to a limit of no more than 350 NM from relevant
baselines.
 The Dispute over Ambalat

Malaysia claim over Ambalat block arising from its 1979 map demarcating
Malaysia’s maritime boundary. Malaysia published a new map in two sheets
illustrating Malaysia's claimed land territory and limits of its maritime claims, notably
territorial sea and continental shelf. The map was created unilaterally and stimulated
protests from its neighbors because its claim excessively discount third countries'
maritime territories.

Indonesia and Malaysia’s dispute over part of the Celebes (Sulawesi) Sea off the east
coast of Borneo (Kalimantan to Indonesia), termed “Ambalat” or the “Ambalat
offshore area”, emerged in February-March 2005. The dispute came to prominence as
a result of the issuing of exploration licenses for two deep-water oil concession
blocks, ND6 and ND7, by Malaysia’s national oil company Petronas to its own
exploration arm, Petronas Carigali, in partnership with international oil giant Royal
Dutch/Shell Group on February 16. The Malaysian blocks largely overlap with a
brace of Indonesian blocks, the Ambalat block and East Ambalat block, which were
licensed to Italian oil major ENI and US-based oil multinational Unocal, in December
2004. The conflicting claims over maritime boundary territory highlight the potential
risk of conflict in the region.

B. The Conflict Parties and Issues

The dispute is therefore directly linked to issues of energy security in terms of

securing seabed hydrocarbon resources for each state. The Indonesian Ministry of
Foreign Affairs termed Malaysia’s action “a violation of Indonesia’s sovereignty” and
warned Shell to stay out of Indonesian waters. Malaysian Foreign Minister Syed
Hamid Albar reacted by observing that while Kuala Lumpur had indeed received the
protest note, Malaysia had itself dispatched similar protests to Jakarta over the
concessions the Indonesian authorities had issued to ENI and Unocal.1

As diplomatic relations soured, both sides rushed to deploy military forces to the ill-
defined disputed area. On 2005, March 3, Indonesian President Susilo Bambang
Yudhoyono ordered the military (TNI) to protect Indonesian sovereignty and secure
the disputed area, and it was announced that three Indonesian naval vessels were
1
“Areas in Sulawesi Sea within Malaysia’s borders”, Malaysia Star, 2 March 2005.
 already patrolling the disputed zone. Indonesia’s Eastern Fleet Task Force was then
gradually reinforced, eventually bringing the Indonesian Navy’s presence up to eight
vessels supported by four F-16 fighter jets which were reposted to Balikpapan in East
Kalimantan on March 7. 2

Malaysia argued against military escalation with Foreign Minister Albar, stating that
Malaysia “will not do anything beyond what we consider as our rightful maritime area
in line with the law of the sea. To me, there is no need to send ships”. Although,
Royal Malaysian Navy (RMN) and marine police vessels were reportedly deployed to
the disputed area, and on March 4 the Malaysian media announced that the Royal
Malaysian Air Force (RMAF) had reinforced its units based in Sabah and Sarawak.
Subsequently, as diplomatic talks proceeded, the number of Indonesian military
vessels in the disputed area was halved, matching the number of Malaysian patrol
boats, though suggestions of a “withdrawal” on Indonesia’s part were denied.

The inherent dangers involved in having rival naval vessels in close proximity to one
another, both engaged in patrolling what they regard as ‘their’ maritime space and in a
context of strained bilateral relations was amply demonstrated by the collision
between Indonesian naval vessel and Malaysian patrol boat, which caused minor
damage to both vessels. Indonesian military sources accused the Malaysians of
ramming the Indonesian naval craft. However, Indonesian Navy Chief Admiral
Salamet Soebijanto commented that the incident occurred when the Indonesian vessel
“tried to drive the Malaysian vessel out of our maritime territory”, indicating a robust,
confrontational approach from the TNI.3

The incident provoked an emergency meeting between Indonesian President Susilo

Bambang Yudhoyono and his top military commanders, whom he instructed to refrain
from confrontation, so as to allow the two governments to continue their search for a
peaceful diplomatic settlement. Malaysian governmental sources also called for calm,
with Malaysia’s Deputy Prime Minister and Defense Minister Najib Razak stating on
April 12 that the navy had been told to “exercise restraint” and adhere to strict rules of
engagement, while fellow Deputy Prime Minister Datuk Najib declared that it was not
Malaysia’s intent to “edge towards conflict”. Nonetheless, both sides declared their

2
“Air Force sends four F-16s to Ambalat”, Tempo, 7 March 2005.
3
“RI, KL warships collide in Ambalat”, The Jakarta Post, 10, April 2005.
intention to continue their patrols in the disputed area in order to emphasize their
claims. While each claimant’s navy has been instructed to patrol only their ‘own’
waters, the fact remains that an area of overlapping claims exists, bringing the two
sides’ naval vessels into close proximity, thus raising the possibility of further
incidents occurring.

The dispute has therefore witnessed repeated claims and counter-claims regarding
violations of national sovereignty, multiple diplomatic protests, and an alarming
military build-up in the disputed area. Furthermore, in Indonesia the dispute has been
characterized by popular anti-Malaysian street protests, flag-burnings and
inflammatory nationalist commentary in the media.

Energy security and Ambalat

The disputed area, though in deep water, is clearly promising, especially in a

commercial environment driven by record crude prices. This factor, combined with
advances in drilling technologies, has driven exploration efforts in deep and ultra-
deep offshore regions, making areas such as Ambalat attractive where previously
interest had been limited. ENI reportedly drilled two test wells in the Ambalat area in
late 2004 and made “encouraging” discoveries, leading the Indonesian authorities to
provide a very broad estimate of the hydrocarbon deposits in the Ambalat area of
between 100 million barrels and one billion barrels of oil. Although caution should be
used in respect to such estimates in the absence of in-depth exploration work,
particularly test drilling, it seems clear that there is significant potential for offshore
oil and gas exploitation in the Ambalat offshore area, which is of obvious national
interest to both states, especially in the context of the energy security dilemmas they
face.

The disputed area is also significant in terms of navigation security, as it lies athwart
the SLOC running from the Lombok Strait between Bali and Lombok islands
northwards via Indonesia’s designated Archipelagic Sealanes through the Makassar
(or Macassar) Strait between the east coast of Borneo and the Molucca Islands in the
Celebes Sea. Although much attention has been focused on the Malacca Strait, which
is unsurprising since it is estimated to take about 72 percent of eastbound tankers from
the Persian Gulf to East Asia, the Lombok/Makassar route is of nearly equal
importance from an energy security perspective. This is because while the Malacca
Strait dominates in terms of numbers of tankers, the Lombok/Makassar route takes
fewer but larger vessels so that in tonnage terms the split between the two routes is
roughly even.

Competing claims

As previously noted, the Ambalat offshore area is located in the Celebes Sea, off the
east coast of Borneo. It is worth noting in this context that no land territory is at stake,
although several erroneous media reports claimed that Indonesia and Malaysia were
contesting sovereignty over “Ambalat Island”. The Ambalat dispute is non-territorial
in nature, and the parties are concerned not with sovereignty per se, but with their
overlapping claims to continental shelf and EEZ within which they have specific
sovereign rights.

The precise dimensions of the dispute are, however, unclear. While there is
unmistakable overlap between competing oil exploration concessions, the dispute
extends beyond that confined area. The problem is that while both states have signed
and ratified the LOSC and claim 12NM territorial seas and continental shelf and EEZ
rights out to 200NM, only one of the parties has defined the extent of its jurisdictional
claims.

In 1979 Malaysia issued an official map illustrating the extent of that country’s
jurisdiction over territorial sea and continental shelf. Malaysia’s own oil concessions,
and thus at least part of the area that Indonesia considers part of its own Ambalat
offshore area, fall within Malaysia’s 1979 claim line in the Celebes Sea.

For its part, Indonesia has yet to specify the precise extent of its continental shelf or
EEZ claim. But Indonesia does point out that it, along with a number of Malaysia’s
other neighbors, rejected the 1979 Malaysian map. The closest Indonesia has come to
articulating its claim was in the case of the International Court of Justice (ICJ)
concerning Sovereignty over Pulau Sipadan and Pulau Ligitan. In that context,
Indonesia claimed that the maritime boundary should proceed due east from the
terminus of the land boundary on the east coast of Sebatik Island which is divided
 between the two states. Indonesia hasn’t yet specified the revised scope of its claims
in the aftermath of the ICJ case.

C. Conclusions

Indonesia and Malaysia conflict in Ambalat bocks highlight enduring regional

sensitivities regarding boundary and sovereignty issues, as well as heightened
concerns over energy security. Maritime boundary demarcation lines define the limits
of jurisdiction over valuable offshore areas and thus ownership of key resources, a
crucial consideration in the context of high oil prices and energy security
vulnerabilities.

It is worth observing, however, that energy security is only one factor. International
boundaries have great psychological and political significance. States regard their
international boundaries as representing their territorial integrity and sovereignty, and
therefore view their borders as a crucial ingredient in their continuing legitimacy. This
fact partly explains the vigorous reaction by states to apparently innocuous border
incidents, as demonstrated in the Ambalat case, where two ostensibly friendly
neighbors and ASEAN partners have proved willing to deploy their armed forces to
confront one another in order to safeguard themselves against perceived threats to
their territorial integrity and rights to key resources.

In maritime boundary disputes, the lure of potential access to seabed oil and gas
resources often plays a dual role. On the positive side, it can be a motivating factor,
prompting a desire to resolve the dispute swiftly so that exploration can proceed as
soon as possible, especially when oil prices are high. On the other hand, the possible
presence of such resources can serve as an impediment to dispute resolution, since
often neither side is willing to concede what it regards as its own legitimate rights,
there are concerns that if a compromise boundary line were drawn through the zone of
overlapping claims, the bulk of the resources at stake could end up on the ‘wrong’
side of the line, a consideration which provides a strong motivation to enter joint
development.
Reference

http://www.sinarharapan.co.id/berita/0503/14/opi01.html “Senin, 14 Maret 2005”

http://www.sinarharapan.co.id/berita/0503/14/sh04.html “Selasa, 04 November 2008”

http://geo-boundaries.blogspot.com “Saturday, April 09, 2005”

http://www.siiaonline.org/?q=programmes/insights/indonesia-disputes-ambalat-with-
malaysia

http://www.tempointeraktif.com “7 March 2005”

http://wikipedia.org/wiki/Ambalat

http://www.todayonline.com/articles/283086.asp “TODAY 2008, October 23”

http://www.thejakartapost.com “April 10 2005”

http://www.thejakartapost.com/yesterdaydetail.asp?fileid=20050609.E03 The Jakarta Post -

Opinion and Editorial - June 09, 2005

Maritime Zones Law No. 22 of 1 September 1976 - LAW OF THE SEA (National
legislation) © DOALOS/OLA - UNITED NATIONS