Conflict Resolution Assignment

³Malaysia 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° 1'15"




l t



t l

5 km from West to East and 135 km from Sout to Nort

T e Hi

of Indonesi -

l si Boundaries

Before stepping into Ambalat case, it is necessary to briefly look back into t e history of Indonesia-Malaysia boundary. Discussion on boundary of the t o 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 bet een The Great Britain and the Netherlands to divide Borneo Island into t o 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 ³loss´ 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.

T e 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 ³Ambalat´ or the ³Ambalat 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 T e Confli t 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 ³a 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 illdefined 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 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 ³will 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 ³withdrawal´ 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 µtheir¶ 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 ³tried to drive the Malaysian vessel out of our maritime territory´, indicating a robust, confrontational approach from the TNI.3

³Areas in Sulawesi Sea within Malaysia¶s borders´, Malaysia Star, 2 March 2005. ³Air Force sends four F-16s to Ambalat´, Tempo, 7 March 2005. 3 ³RI, KL warships collide in Ambalat´, The Jakarta Post, 10, April 2005.


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 ³exercise restraint´ and adhere to strict rules of engagement, while fellow Deputy Prime Minister Datuk Najib declared that it was not Malaysia¶s intent to ³edge towards conflict´. Nonetheless, both sides declared their 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 µown¶ 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 ultradeep 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 ³encouraging´ 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 ³Ambalat 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 µwrong¶ side of the line, a consideration which provides a strong motivation to enter joint development.

Reference ³Senin, 14 Maret 2005´ ³Selasa, 04 November 2008´ ³Saturday, April 09, 2005´ ³7 March 2005´ ³TODAY 2008, October 23´ ³April 10 2005´ 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

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