Ambalat Dispute

Love and hate relationship. I think it does best describe Indonesia's affaire to Malaysia.

The tension about Indonesia's illegal migrant workers in Malaysia has just cooled down. But, a new tension about a dispute regarding Ambalat Block in Sulawesi Sea has quickly emerged on the center stage. It's a pity that the Indonesian public, although only a small group, handle it emotionally, full of xenophobic rage and misconstrued nationalism. Soekarno’s yell “Ganyang Malaysia!” (translated as ‘Crush Malaysia!’) re-emerges during this new tension including the burning of Malaysia’s flag and Badawi’s picture.

This dispute has also triggered cyber warfare between these two countries. Many Malaysian's government sites were hackered... showing the Indonesian's red and white flag, or words like 'Ganyang Malaysia'. These are hot topics in many online forums especially in Indonesia and Malaysia.

We used to call Indonesia and Malaysia as rumpun melayu (translated as common ethnic family), but yet we don’t act as family when a dispute arises.

In the midst of symposium commemorating 50 years of Indonesian-Canadian diplomatic Relations (Ottawa, March 12, 2003) I asked the assistant of Rokhmin Dahuri (Indonesia's former Minister of Marine Affairs and Fisheries) on how we lose Sipadan and Ligitan islands in the International Court of Justice in 2002. To my astonishment, the answer was simple yet unexpected from a high-ranking government official on duty abroad... "It's the problem of the previous government. We don't know anything about it." He might think I'm just another unimportant Indonesian who happened to ask about this. What if I'm a non-Indonesian who happened to speak Indonesian? Then, it would serve as a bad PR for the government.

I also recalled a xenophobic incident around pilot project with the Indonesian’s navy using sophisticated monitoring instrument in Indonesia. I think it’s around 1994-1995. Through a long approach I secured a pilot project with one of navy post in North Jakarta. That day I went there to install the instrument with my friend, the man behind this instrument. My contact in the navy then said that I was allowed to come inside but not my friend. Do you know why? Because he happened to be Caucasian. Their reason was that they did not want any foreign individual entering their area and stole their data!

I was really upset with their unreasonable excuse and decided to negotiate with the superior:

1. Indonesia needed powerful and economical instrument to collect reliable data along our coastlines, and I had the instrument;
2. Many advanced and sophisticated technology are already available. If we didn’t keep pace with the outside world then we’d lose the chance to gain control of data in our vast archipelago. In today’s world any knowledge about data resources is as important as having weaponry. Most probably the outside world has already processed our data as we spoke;
3. I guarantee that my friend wouldn’t do anything that would damage his and his institution’s prestige.

The superior flatly rejected my reasons using the same lame excuse. It’s downright stupidity, but I couldn’t do anything more. Thus, no wonder if case like Ambalat happens again and again.

I believe that the territorial dispute between Indonesia and Malaysia must be settled through peaceful negotiations and we have to avoid any unilateral and aggressive solution. In the future we should also have to hold a meeting with Malaysia to discuss and resolve the ongoing territorial dispute between the two countries, including in the Malacca Strait, Natuna Waters and the Sulawesi Sea. We should maintain our sovereignty, no doubt about it. But, in order to do that we should not downplay diplomacy and negotiation – inside and out – and we should not be ignorant anymore about the need to gather and maintain our data resources efficiently.

Following are coverage on this dispute, in chronological order. The highlights are mine.

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Source: The Straits Times
Date: March 8, 2005

High Stakes in Sulawesi Sea
By Derwin Pereira, Indonesia Bureau Chief

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

Jakarta - 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.

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Source: The Straits Times
Date: March 8, 2005

Commentary
A little diplomacy can help calm troubled waters
By Graham Gerard Ong for The Straits Times

The dispatch of three Indonesian warships to the Sulawesi Sea last week, in protest against Malaysia's decision to award a contract to an Anglo-Dutch firm to explore and mine the Ambalat and East Ambalat oil and gas blocks, may appear to be a straightforward case of 'gunboat diplomacy'.

Until a few days ago, the issue had remained largely dormant because Malaysia appeared to be resolved to tackle it through diplomatic rather than military means.

Now, the latest reports indicate a significant escalation in tensions between the two countries after a confrontation between a Malaysian and an Indonesian warship on Saturday.

The patrolling Malaysian warship seemed to have informed its Indonesian counterpart that it had encroached into Malaysian waters near Sebatik island in the Sulawesi Sea. In the row that followed, the Malaysian vessel apparently decided to withdraw when the Indonesian vessel gave pursuit.

According to a report over the Internet-based Indonesia Interactive News, Indonesia has now reinforced its three warships at the Ambalat blocks with another three fighting vessels, and a seventh is on its way. Indonesia also plans to mobilise four F-16 fighter jets to support the naval effort.

The significance of Sebatik island, which is approximately 215 nautical miles (398km) north-east of the Ambalat blocks, was underlined yesterday when Indonesian President Susilo Bambang Yudhoyono visited the southern part of the island. The area has also become a temporary shelter for Indonesians fleeing a Malaysian crackdown against illegal workers.

This confirms that the disputes over the Ambalat blocks and Malaysia's repatriation of illegal Indonesian immigrants are intertwined and have to be dealt with simultaneously.

However, any broader analysis of this crisis cannot avoid the recognition that it was Indonesia which initiated it by sending a naval presence to the area.

An explanation for its actions may be found in the works of the famous 19^th-century naval historian and strategist Alfred Thayer Mahan. In his classic The Influence Of Sea Power Upon History, he argued that naval power is the key to success in international politics.

The navy's importance rests on two key pillars Its ability to affect events on land, and its ability to control the use of the sea (or 'command of the sea' as Mahan called it). The latter pertains to the ability to protect one's maritime assets and to project military power ashore while denying the opposition the means of counteraction.

The command of the sea also extends to the navy's ability to project its 'overseas presence' The visible display of sea power to act as a deterrent to opposing powers in areas of international tension.

Unlike the littoral states of Singapore and Malaysia, the Indonesian navy played a vital role in the formation of the country's national consciousness after the end of World War II - a consciousness not unrelated to Indonesia once being the locus of the Srivijaya and Majapahit maritime empires between the 7^th and 16^th centuries.

Despite possessing only wooden ships, a few landing craft and weapons left over by imperial Japan, Indonesia, soon after the proclamation of its independence from the Dutch, created the Agency of the People's Security Sea Service, the progenitor of the Republic of Indonesia Navy (renamed in 1970 as the Navy of the Indonesian Armed Forces).

As one report put it, one of the initial purposes of the Indonesian navy was to 'expand the spirit of the (independence) proclamation'.

Its role was then further embellished through its contribution in the independence war against the Dutch between 1945 and 1949.

Though the Indonesian military's traditional role of dwifungsi has been officially dismantled in the post-Suharto era, the dispatch of the three warships was a knee-jerk response to President Yudhoyono's statement about what his government believes to be its rights in the Sulawesi Sea.

Similar to the actions of the Indonesian army in the recent past, the navy's recent actions show that the military's socio-political role is still a hard habit to break.

In 2002, the entry of six Indonesian warships into the waters of then East Timor on the eve of its independence was perceived as a signal of Jakarta's resentment over losing a province.

Just as the East Timor incident created a negative impression worldwide of former president Megawati Sukarnoputri's administration, the recent show of force in Sulawesi may come at a high cost to President Yudhoyono's political credibility, and may tarnish his country's reputation.

For one thing, the Indonesian move negates the credibility it accrued when it proposed the creation of an ASEAN Security Community by 2020 during its 2003-04 chairmanship of the ASEAN Standing Committee.

Indonesia's actions go against the grain of the grouping's fundamental principles.

ASEAN states are to settle their disagreements without considering the use of force as an option. Preparations for the use of force are no longer acceptable and neither must they be factored into a country's contingency planning.

Also, the relative frailty of Indonesia's navy is an open secret among the region's defence community. Though it is the biggest naval force in Southeast Asia, its neglect over the 1990s has led to an unserviceable fleet.

Even Indonesia's navy chief of staff, Admiral Bernard Sondakh, had admitted as much. A 2002 Jakarta Post editorial quoted him saying, 'Only a handful of our warships are operational'. Even then, since 'none are equipped to engage in combat', they were only 'good for fishing expeditions', he said.

Malaysia's decision to avoid a naval response until the Sebatik island standoff showed an accurate assessment of the scope of Indonesia's naval capacity.

Its sensible decision to withdraw its warship from the Sebatik island standoff also suggests that it has decided to avoid the outbreak of unnecessary conflict.

Malaysia would do well not to engage in any sabre-rattling, for its prudence can generate positive political capital for the country should it submit its case on the dispute to the International Court of Justice once again.

Meanwhile, the Indonesian deployment is a step back for regional relations.

The news of its initial deployment of three warships, reported in the press a day after the opening of the three-day Asean Regional Forum on Regional Cooperation on Maritime Security held in Singapore, also places added strain on the already fragile but pressing agenda of regional maritime security cooperation.

Lastly, the Sulawesi incident raises questions about the state of affairs within President Yudhoyono's government.

When six Indonesian warships appeared off East Timor's coast in 2002, security analysts interpreted it as a sign that the Indonesian military was reasserting its power under then-president Megawati's weak leadership.

Similarly, the warships in Sulawesi may indicate a similar bid for power by the military, against what it perceives as President Yudhoyono's softness in negotiating with Malaysia on both the illegal workers' issue as well as the oil and gas blocks dispute.

It may also indicate a struggle for power within the military, among its various services. Significantly, just days before the Indonesia-Malaysia summit last month, the Indonesian navy announced a massive fleet expansion plan over the next decade.

Its plans to add at least 302 warships to its inventory may also indicate a desire to tip the regional naval balance of power in Indonesia's favour.

In what could be a bid for 'overseas presence', the Indonesian navy made its maiden journey across the Pacific maritime theatre in the middle of last year, sailing to Shanghai for training exercises with the People's Liberation Army navy.

However, if the dispatch of the warships shortly after President Yudhoyono's meeting with Malaysian Prime Minister Abdullah Badawi was indeed done at the Indonesian leader's bidding, the international community may need to revise its perceptions of his diplomatic persona.

The writer is a research associate at the Institute of South-east Asian Studies. The views expressed here are his own.

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Source: The Straits Times
Date: March 8, 2005

Malaysia's Claim: 'Rights to area come with islands'
By Reme Ahmad, Malaysia Bureau Chief

Kuala Lumpur - As far as Malaysia is concerned, it gained the rights to the area when it won the islands of Sipadan and Ligitan from Indonesia, through the International Court of Justice (ICJ) in 2002.

The two islands off Malaysia's Sabah state and Indonesia's Kalimantan province are on the continental shelf that included the offshore blocks being contested by Indonesia.

Foreign Minister Syed Hamid Albar said last week that Malaysia had sovereign rights and jurisdiction within its continental shelf in accordance with the United Nations Convention on the Law of the Sea 1982.

'We will not take action outside what we consider our maritime areas, according to maritime laws,' he said.

Sovereignty over the Sipadan and Ligitan islands, popular among divers, was given to Malaysia by the ICJ in 2002.

While Indonesia has accepted the loss of the two islands, it is contesting whether Malaysia has sovereignty over the two deep water blocks that were awarded to Petronas Carigali and Shell for hydrocarbon exploration.

Petronas Carigali is the exploration arm of Malaysian national oil firm Petronas.

An energy official said part of Jakarta's unhappiness could be due to 'some overlap' between the blocks awarded to the two firms, and a block awarded to US oil firm Unocal by Indonesia.

Malaysia protested to Indonesia in October last year when the award was given to Unocal for what Jakarta calls the Ambalat block. Now, it seems, it is Jakarta's turn to complain about the ND6 and ND7 blocks awarded by Malaysia.

'There is some overlap if you consider their claim. But the award of the blocks by Malaysia was based on what is known to be Malaysian territory,' he said.

Malaysia, which shares the most common borders with its ASEAN neighbours, faces other disputed claims in the oil-rich area.

It has an outstanding territorial dispute with Brunei over the Kikeh oilfield in offshore Sabah.

Malaysia also claims parts of the Spratly islands which are also claimed, in part or in whole, by other countries including China, Vietnam and the Philippines.

A Singapore-based oil analyst said one way out of the Sulawesi situation could be similar to what happened in the Gulf of Thailand, where Malaysia and Thailand are jointly developing the hydrocarbon deposits.

'The chances of settling the issue could be made through a joint-development area solution. But here there is the added problem of both countries having awarded the contracts to some companies.'

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Source: The Jakarta Post through Asia News Network
Date: March 9, 2005

RI needs diplomatic strength in dealing with Malaysia
By Wahyu Susilo

The diplomatic tensions between Indonesia and Malaysia have been escalating over a border dispute concerning the oil in the Ambalat block. It started nearly two weeks ago when Malaysia's state oil company Petronas claimed that the oil field in the Sulawesi Sea was its exploitation area, and proceeded to sell a concession to the multinational company, Shell.

The unilateral decision by the state company promptly received a strong reaction from the Indonesian government, which also claimed that Ambalat was an inseparable part of the unitary state of the Republic of Indonesia. The oil dispute became a full-fledged crisis after warships and fighter jets were deployed to the area by both countries. The ships are apparently still there on high alert.

As a background, Malaysia's bold claim on Ambalat was not only based on historical considerations, but also on Malaysia's analysis of the performance of Indonesian diplomacy, which has always "lost" to Malaysia. In previous weeks, Malaysia noticed its "victory" in the diplomacy of migrant worker deportation, though it had been cornered by the case of Damansara Damai, which revealed Malaysian companies' wage payment arrears and deliberate recruitment of migrant workers without documents.

In the beginning, Indonesia aggressively declared that there was "something serious about the issue of migrant workers without documents in Malaysia" and even planned to hire 10 renowned lawyers in Malaysia to sue the companies in order to make them bankrupt. But the Malaysian government was not deterred and stuck to its guns, believing that, "migrant workers without papers is a crime so they have no right to sue". Finally, Indonesia backed down -- with an anticlimax at the summit meeting between President Susilo Bambang Yudhoyono and Premier Abdullah Badawi on Feb. 14, 2005.

When the Indonesian public expected the meeting to improve the fate of migrant workers without documents (particularly on the issue of unpaid wages), the result was the reverse. Instead of urging Malaysian firms to pay the wages overdue, the Indonesian government left its settlement fully to Malaysia and agreed to allow the stern actions against Indonesian illegal workers. The Indonesian "agreement" legitimized the Malaysian operation. Indonesia's "defeat" was apparent with the cancellation of the Indonesian government's lawsuit against the Malaysian firms.

This failure in Indonesian diplomacy encouraged Malaysia to launch its political maneuver by claiming the Ambalat offshore area as its territory. The move will again force Indonesia to solve the Ambalat border crisis through the mechanism of diplomacy. Indonesia will definitely avoid settling the dispute through the international court because of the trauma of its loss in the 2002 Sipadan-Ligitan case in this tribunal.

I predict that by inviting Indonesia to bilateral diplomatic talks, there will certainly be room for negotiation on the control over Ambalat. Should Indonesia be trapped in a fait accompli, it would mean that Ambalat will indeed be recognized legally as Malaysia's oil field.

The Indonesian government should conduct a profound evaluation of its performance of foreign diplomacy. Admittedly, Indonesia has so far been ensnared in the myth of the "common ethnic family" policy with Malaysia, so that the pattern of diplomacy tends to avoid the approach of bargaining and be more oriented to the politics of harmony.

By the model that gives prominence to the politics of harmony, the interests of migrant workers demanding their rights and protection were brushed aside for the sake of harmony in bilateral relations. So, if in this process of the Ambalat diplomacy, Indonesia still applies the politics of harmony, the outcome will again harm Indonesian interests. In a territorial dispute, our diplomacy should be totally maximized by pooling all political resources.

Observing the main issues in the Indonesia-Malaysia bilateral crisis (migrant workers and territorial dispute), Indonesia should strengthen its political bargaining position in its diplomacy by analyzing the interdependence between Malaysia's economy and the labor market. On Saturday, March 5, a Malaysian delegation under Interior Minister Azmi Khalid visited Jakarta to meet with Indonesian Minister of Manpower and Transmigration Fahmi Idris for a discussion on the quick return of the migrant workers who left Malaysia during the amnesty period.

According to Azmi Khalid, companies in Malaysia are facing a labor shortage due to the scarcity of low-wage migrant workers, and Malaysia expects the fulfillment of its industrial demand within two months (for around 300,000 migrant workers).

Therefore, this reality should serve as a political bargaining chip. The Indonesian government should not always comply with Malaysia's requests. Indonesia's bargaining position will rise if the government says, for instance: "Indonesia is prepared to speed up the return of 300,000 migrant workers to Malaysia, if within a month the Malaysian government is ready to force Malaysian firms to pay wages still overdue."

The government can add more demands including the arrest and punishment of Malaysian employees who deliberately recruited migrant workers without papers, make sure that the migrant raid proceeds peacefully without rights violation, and withdraw the unilateral claim on Ambalat."

The writer is a labor policy analyst in Migrant CARE -- Indonesian Association for Sovereign Migrant Workers.

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Source: Asia Times Online
Date: March 9, 2005

Sulawesi Sea row dredges up defenses
By Bill Guerin

Jakarta - Demonstrators held a noisy protest outside the Malaysian Embassy in Jakarta on Monday, chanting slogans and asserting Indonesia's claim to a disputed area off the coast of Malaysia's Sabah state and Indonesia's East Kalimantan province in the first territorial dispute since Indonesian President Susilo Bambang Yudhoyono took office last October.

Indonesia has sent four F-16 fighter planes and three more warships to join the four already stationed in the oil-rich waters off Borneo Island. The Royal Malaysian Navy has also deployed two warships to the area, further adding to the tensions. Though both governments continue to insist that the dispute over conflicting claims as to who controls the resource-rich offshore area will be resolved diplomatically, the buildup of military forces in the waters continues to be a cause for concern.

After a cabinet meeting chaired by Yudhoyono on Sunday, Indonesian air force chief of staff Rear Marshal Djoko Suyanto said the additional military strength "isn't aimed at provocation", but that the fighters were sent to strengthen patrols maintaining sovereignty over Indonesia's territorial waters.

This latest military buildup came after a report last Thursday that a Malaysian navy Beechcraft had apparently breached Indonesian airspace over the Sulawesi Sea in the fifth such incident in less than two weeks. According to Colonel Marsetio, commander of the Indonesian navy's Eastern Fleet Command's Combat Task Force, "The aircraft was flying close to our warships near the Ambalat Island, and was three miles into our territory according to map and visual observation."

In a telephone conversation on Monday morning between Malaysian Premier Abdullah Badawi and Yudhoyono, who was about to leave Jakarta's Halim Perdanakusumah military airfield to visit Sebatik Island, just west of Ambalat, where the disputed area lies, the two leaders agreed that both their foreign ministers would meet in Jakarta on Wednesday to try to defuse the long-running maritime row.

Sebatik is just off the land border between East Kalimantan and Sabah and is split between both countries. To the east lie the Sipadan and Ligitan Islands, which were disputed for years before Malaysia was given sovereignty over them by the International Court of Justice in 2002 (see Indonesia: Islands in the storm, December 21, 2002).

The visit to Sebatik by the president, who was accompanied by Indonesia's former military commander in chief and current coordinating minister for political, legal and security affairs, Widodo A.S.; Minister of Energy and Natural Resources Purnomo Yusgiantoro; Minister of Manpower and Transmigration Fahmi Idris; Cabinet Secretary Sudi Silalahi; and current military chief General Endriartono Sutarto, was aimed at seeking direct reports on the situation in the border areas, presidential spokesman Andi Mallarangeng said.

Yudhoyono told a local radio station during his visit that he had agreed with Prime Minister Badawi to reduce tensions. "Our hope is that this problem can be solved through diplomatic channels with a fair solution in respect to Indonesia's sovereign and territorial rights," the president said.

Oil concessions add fuel to the fire
On February 16 Malaysia's state oil firm Petronas awarded oil-exploration rights in two exploration blocks in the disputed Ambalat area to its own exploration arm along with Anglo-Dutch giant Royal Dutch/Shell. However, Indonesia already had granted a concession to US-based oil giant Unocal Corp in November to pump liquefied natural gas (LNG) from deepwater blocks in that area.

Jakarta has warned Royal Dutch/Shell not to meddle in the offshore oil concessions. Arif Havas Oegroseno, director for political, security and territorial agreements with the Indonesian Ministry of Foreign Affairs, told local media that a letter had been sent to Shell Malaysia and Shell in the Netherlands warning that "the waters around the Sipadan and Ligitan Islands are our territory, and we regard giving this award as violating our sovereignty".

"We have warned Shell, do not enter our waters," he said. When asked about the International Court of Justice's decision to award sovereignty over the Sipadan and Ligitan Islands to Malaysia, Oegroseno said the judges had stated that the interests of mapping Malaysian sovereignty over the two islands did not have a direct influence on the delineation of the continental shelf. "In other words, the maritime region still belonged to Indonesia," he said.

Malaysia claims that the waters around the islands are part of its territory, though Indonesia says Malaysian waters extend only 19 kilometers from Sipadan and Ligitan. The Malaysian claim is erroneous, according to Jakarta, as it is based on a self-made and outdated 1979 map of the area that is not recognized by the Indonesian government or most other Southeast Asian countries.

Badawi calls for diplomacy
After his call to Yudhoyono, Badawi said he hoped the dispute could be managed in a "cordial manner". He added that, "to prevent any undesirable incidents which may create tension in the relationship between Indonesia and Malaysia, both of us agreed for the matter to be discussed at the diplomatic level". But back in Jakarta, leading legislators were beginning to push for a hardline stance, with Speaker of the House of Representatives (DPR) Agung Laksono urging stern action, including the use of military force if necessary, to "solve" the dispute.

"We will support such moves as we believe the people will also support such a move," Laksono said. The Ambalat block is well inside Indonesian territory and undeniably part of Indonesia, he added.

Separately Theo Sambuaga, chairman of Indonesia's powerful Commission I on Political and Security Affairs, urged the government to recall its ambassador to Kuala Lumpur, and demonstrators protested outside the Malaysian Embassy in Jakarta.

Ties between the two predominantly Muslim nations already are being severely tested by a Malaysian crackdown on an estimated 1 million illegal immigrants, some 400,000 of whom come from Indonesia. Malaysia's controversial operation to round up, whip and even deport the illegal workers has attracted widespread condemnation by rights groups and the governments of affected Asian countries.

Though Malaysia needs the Indonesian workers to support vital industries such as construction, it wants their stay legalized, as does Jakarta. Many Indonesians who fled Malaysia last week after an amnesty for illegal workers expired have sought shelter on Sebatik Island, where both countries have military garrisons.

Indonesia flexes its muscle
On the territorial dispute, Abdul Razak Baginda, a Malaysian analyst from the Malaysian Strategic Research Center, told Reuters, "Indonesia was once the Big Brother in the region but has never been the same since the fall of Suharto. This [dispute] is the first time it is getting a chance to assert itself."

Meanwhile, Deputy Prime Minister Najib Abdul Razak expressed his own view: "I think the new president is flexing his muscle."

This suggestion, however, may be somewhat at odds with Indonesia's readiness to attempt to resolve the spat diplomatically.

On Friday, Marty Natalegawa, the main spokesman for the Ministry of Foreign Affairs, said the government will "utilize all options to convey our position on Ambalat", but would not bring the dispute to The Hague. "It is not on our agenda," said the spokesman, who explained that the government would try to settle the dispute through diplomatic channels.

Even Yudhoyono himself has said, "We want to settle this in a good manner... It should be settled well without falling into the trap of confrontation, especially armed confrontation."

Nonetheless, Jakarta is unlikely to be the first to back down. If the undoubted goodwill between both leaders and the ongoing high-level talks fail to produce a compromise, the only other option may be to return to the International Court of Justice, particularly given the strong national sentiment in Indonesia's fractured parliament and the fact that anti-Malaysia sentiment has already surfaced on the streets in Jakarta.

Former People's Consultative Assembly Speaker Amien Rais has urged the government to make all efforts to continue the fight for Ambalat. "If the government is softhearted and weak, they [Malaysia] will really put pressure on us. So the ball is really in the government's court," Rais said in Makassar, South Sulawesi, where a small "Front for Crushing Malaysia" center has been set up to defend the country should tensions continue.

The Indonesian military is clearly ready to assume battle positions in the unlikely event that this recent bout of gunboat diplomacy leads to shots being fired in anger. On Monday the navy's main spokesman, First Admiral Abdul Malik Yusuf, was quoted as saying: "We will not let an inch of our land or a drop of our ocean fall into the hands of foreigners."

Bill Guerin, a Jakarta correspondent for Asia Times Online since 2000, has worked in Indonesia for 19 years in journalism and editorial positions. He has been published by the BBC on East Timor and specializes in business/economic and political analysis in Indonesia.

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Source: MiningIndo.com
Date: March 10, 2005

Govt. to review Ambalat block acquisition process

The Ministry of Energy and Mineral Resources (ESDM) will review again the Ambalat block acquisition process from the original operator, Shell, to ENI in 2001, following the country's dispute of the oil-and-gas work area with Malaysia.

ESDM Minister Purnomo Yusgiantoro confirms that they have sent a complaint note to the Dutch company, following its current presence as the block's operator, appointed by the Malaysian oil-and-gas state enterprise, Petronas.

He explains that previously, the Indonesian government had awarded the production-sharing concession to Shell. But the production-sharing contract was later acquired by an Italian company, ENI Ambalat Ltd.

Shell itself had once performed exploration by drilling one well. But the drilling could not pump any oil since it was stated as a dry hole.

"Shell had then handed off the concession. Afterwards, ENI drilled two wells, and it showed a good process. Then Shell, through Malaysia, has entered the block again."

In relation to the potential oil reserves in the block, Purnomo admits that he cannot say a definite figure since they have not done any calculation.

On the other hand, Exploration and Development Director of the Oil and Gas Directorate General under the ESDM Ministry, Novian M. Thaib, describes that concession or production-sharing contract for Ambalat itself was signed in 1999. The block was handed to ENI in 2001, or around three years after Shell had received the concession and carried out early exploration.

In 2003, the ESDM Ministry had already warned Petronas not to offer Ambalat since it is within Indonesia's territory.

In response to the alleged violation that Shell committed regarding the data on Ambalat, Novian says that they need to prove it first so they can state whether it as a criminal act.

As quoted from Bisnis Indonesia, the oil-and-gas block dispute between Indonesia and Malaysia began when Petronas gave the concession to operate the work area to Shell in last February. On the other hand, Indonesia had signed a contract with a production-sharing contractor (KPS), ENI Ambalat Ltd, who had taken over the work area from Shell in 2001.

In addition to Ambalat, Indonesia also gave a concession to Unocal Indonesia Ltd, to operate another oil-and-gas work area next to Ambalat block, namely East Ambalat Block, in December 2004.

Unocal Communication Manager Barry Lane states they will do pre-drilling analyses at Ambalat area, which is currently disputed by Indonesia and Malaysia. Further, the company cannot give any comments on the border dispute between the two countries, since it is an issue between Indonesian and Malaysian governments.

He recognizes that it is too early to give any answer regarding Unocal's further exploration at Ambalat area since exploration activities do not only include drilling. Drilling is in fact the last activity of an oil-and-gas exploration process.

At the next phase, the company will do other pre-drilling analyses on geological features in the area, in the next few months. But the company cannot provide any fixed schedule at the moment.

Unocal, an American company, obtained the right for exploration in Ambalat from the Indonesian Government. Shell also got a similar right from Malaysia. At the moment, Chevron Texaco (the holding company of PT Caltex Pacific Indonesia) is eyeing Unocal as an acquisition target. Previously, China National Oil Company (CNOC) also tried to seize Unocal. The acquisition value of Unocal is expected to reach US$16 billion.

Mining analysts predict that Ambalat oil field would produce oil more or less 300,000 barrels per day. Assuming the oil price is US$40 per barrel, deducted by production costs and contractor fees, the government would at least receive Rp 300 trillion or around US$32 billion.

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Source: The Associated Press
Date: March 11, 2005

Malaysia FM says no question of war with Indonesia over disputed offshore oil field

Kuala Lumpur (AP): Malaysia said on Friday there was no likelihood of a war with Indonesia in their dispute over an offshore oil field that had turned into an ugly diplomatic row and naval confrontation in the past week.

"A maritime or border dispute happens all the time but it should not cause us to be going to war," Foreign Minister Syed Hamid Albar told reporters after returning from a three-day visit to Indonesia to mend fences. On Thursday, both sides issued a statement, pledging to tackle the problem peacefully.

"In Southeast Asia war is unheard of in modern times," Syed Hamid said.

Before leaving Jakarta earlier Friday, Syed Hamid met with Indonesian President Susilo Bambang Yudhoyono.

"The president made an assurance that everything is under control. He will do everything possible to ensure that the situation calms down without further tension," he said.

Tensions over the offshore oil fields, one of the biggest tests in relations between the two neighbors, flared up last month when Malaysia awarded oil exploration rights in an area of the Sulawesi Sea also claimed by Indonesia.

Both countries sent navy vessels there, and accused each other of trespassing. Syed Hamid downplayed the naval deployments.

"These warships should not be interpreted as a situation of conflict," he said.

"The most important thing is we must be sure the rules of engagement do not create a real situation of a possible shootout. We will make sure that all the paraphernalia that can cause an incident is not turned on," he said.

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Source: The Straits Times
Date: March 11, 2005

No New Oil Concessions During KL-Jakarta Talks
The two countries must also review military presence in disputed area, says Syed Hamid
By Salim Osman, Indonesia Correspondent

Jakarta - Malaysia said yesterday that no new oil concession will be granted to any company during bilateral talks with Indonesia to resolve the overlapping claims on an oil-rich area in the Sulawesi Sea.

Foreign Minister Syed Hamid Albar said both countries must also take steps to reduce tension by reviewing their military presence in the area.

Both sides had agreed to resolve the dispute through peaceful negotiations based on the Law of the Sea 1982. They also agreed that technical teams from both sides would meet on March 22 and 23.

Speaking on the sidelines of the Asean- European Union ministerial meeting yesterday, Datuk Seri Syed Hamid said: 'While undertaking negotiations and discussions by the technical team, there should be no new concession being given. And I think the companies that have been given the concession should be able to read the positions of both governments.'

Relations between the two countries turned sour recently after Malaysia's national oil company Petronas granted a local subsidiary of Dutch energy giant Shell a concession in the disputed area last month.

The concession covers production-sharing contracts for deep-water oil exploration in two blocks located east of Borneo.

Indonesia, which is claiming the area it refers to as Ambalat, has also been granting oil concessions in the Sulawesi Sea to various companies, including Shell, since the 1960s in accordance with what it argues are its internationally recognised territorial rights.

Last November, it awarded a production-sharing 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 gave Malaysia sovereignty over the islands in 2002.

The two countries recently increased their military presence in the disputed area with at least one stand-off last week between their naval forces. Small anti-Malaysia demonstrations organised by nationalist groups have also cropped up in several Indonesian cities, threatening to sour bilateral ties further.

But yesterday, Datuk Seri Syed Hamid, who met his Indonesian counterpart Hassan Wirajuda on Wednesday night, said that they had agreed to reduce tensions.

'The two sides must review the situation. If the military presence in the area may cause tension between the two countries, then steps must be taken to ease the tension,' he said.

Indonesia moved to ease tensions on Wednesday when it withdrew five of the seven ships it had deployed to the area.

Mr Wirajuda told reporters that the meeting of technical team officials of both countries would help to ease tensions further.

'The technical teams would focus on related issues concerning the disputed area such as the continental shelf and the exclusive economic zones,' he said.

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Tempo No. 28/V/Mar 15 - 21, 2005

Cover Story
Clash of Wills at Sea

Indonesia and Malaysia are both claiming a maritime boundary near East Kalimantan. Despite the war of words, the guns remain covered and silent.

The ship raced across the vast expanse of the ocean, trailing a wake of white foam. The sea was blue. The skies overhead were clear. At a high speed of 31 knots, Indonesian Naval Vessel (KRI) Tedong Naga sliced through the seas towards Unarang Reef in the Sulawesi Sea off East Kalimantan last Thursday. The ship's engines roared loudly as if in anger.

In the waters around Unarang Reef, a barge carried dozens of Indonesian workers who could be seen busily erecting a lighthouse. A number of them jumped into the sea to install steel anchors. The water around the reefs at low tide is only waist deep. The men appeared to be tense.

About a kilometer away, two Malaysian Navy patrol boats moved to observe them. The two boats were joined by two police patrol boats, the Tawau Sabah, PZ 13 and PA 42. Near dusk, Malaysia brought in reinforcements. Two additional vessels approached, the KD Panah and KD Kota Bahru. But the Tedong Naga, too, was not alone. The speedy and maneuverable ship was assisting the KRI Wiratno and KRI Tongkol, which had arrived a day earlier. The Indonesian vessels seemed to be forming a fence, guarding the barge working to complete the lighthouse. The fleets of warships of the two countries were now face to face.

Unarang Reef had suddenly become the front line. The slightest friction could erupt into a battle.

Since two weeks ago, temperatures had been rising around the seas whose ownership is now disputed by Indonesia and Malaysia. It all began when Petronas, the Malaysian-owned oil company, sold an exploration concession to Shell, the Dutch-English joint venture, on February 16. The concession covers the Ambalat Block and East Ambalat, which Indonesia claims as part of its territory.

Five days after the transaction, Malaysia began to bare its fangs. Dozens of workers from CV Azza Samarinda, then working to build the lighthouse at Unarang Reef, at the behest of the Department of Transportation, were suddenly assaulted by the Malaysian Navy. On the line of reefs 3 miles offshore of Indonesia's Sebatik coast, the workers were beaten up while on their barge. They were then left to bake in the sun for four hours.

Malaysia's military patrols had violated Indonesia waters even much earlier. In November last year, they openly held firing exercises very near the boundary.

As recently as January, Malaysia chased off an Indonesian fishing boat, the KM Jaya Sakti, from the waters of Unarang Reef. The Malaysian Navy vessel (KD) Sri Melaka went into hot pursuit of the KM Jaya Sakti. The Sri Melaka fired on it without warning. It even attempted to ram the Indonesian boat, a clear sign the boat was being told to leave. After pursuing the Jaya Sakti for an hour, the Sri Melaka changed direction and headed towards Tawao. The incident was duly reported, but nothing came of it.

An even more glaring action took place at the end of February. A Malaysian Beechcraft B200 Super King surveillance aircraft flew into Indonesian territory. That was clearly an aerial provocation. At sea, in the meantime, two of its high-speed patrol boats, the KD Paus and KD Baung sailed into the Reef waters.

Convinced that its territorial sovereignty was under threat, Indonesia then sent a warship and fighters to the area. That was when the territorial dispute blew up. To be sure, large expanses of sea around North Sulawesi province cannot all be guarded at once. The Indonesian Navy only guards its "front door," at the site of the Indonesia-Malaysia boundary, as decreed by the international tribunal in 2002.

That front door extends from the middle of Sebatik Island, now split in two to become both Indonesian and Malaysian territory, to the waters 12 miles off the shores of Sipadan and Ligitan (see map). Malaysia claims more: 70 nautical miles or 129.6 kilometers southward towards the Sulawesi Sea, calculated from the shores of Sipadan and Ligitan at extreme low tide. The Unarang Reef is an important point in this area, a line of shallow reefs covering an area the size of a football field.

On Indonesian Navy maps, the Reef lies in Siboko Bay, "stuck" precisely on the boundary between the two countries. Indonesia claims the reef is in its territory, by drawing a straight line 12 miles from Indonesia's Sebatik border as the base point, then dropping down. That line was drawn because Malaysia's territory grew after the inclusion of Sipadan and Ligitan islands in its territory. Malaysia's version is different. It measures from Indonesia's Sebatik point straight down—without the addition of the 12-mile territorial line. Of course, from that viewpoint, the Reef would belong to Malaysia.

***

Caught up in the dispute between the two countries, Unarang Reef is now set to become the front line of an impending battle. But, throughout last week, gunfire had yet to be heard at sea. Only small incidents took place. Two Malaysian warships hurriedly sped to the reef waters last Thursday. The Indonesian barge was distant only a few hundred meters from them. Some of its workers were then ready for any eventuality. The Malaysian ships proceeded to maneuver at high speed, almost colliding with the barge.

Fortunately, the Tedong Naga was ready to act. Adeptly, the Indonesian warship cut off the others' brazen move. Although they had been cocksure of their moves, having incurred the wrath of the Indonesians, the Malaysians were then forced to take evasive action in order to avoid a clash. There were times when the two sides came very close to clashing. The position of the Tedong Naga was never farther than a stone's throw from the Malaysians when their paths crossed.

A Tempo reporter on the KRI Karel Sasuit Tubun during its patrol witnessed just how the Malaysian officers repeatedly tried to prevent the construction of the lighthouse from proceeding. Based on information given from the Indonesian vessels, in these attempts Malaysia has also tried to make radio contact with Indonesia. For instance, it made contact with the KRI Wiratno last week. That vessel was then circling around to provide security for the Reef area. A voice could be heard from a nearby vessel, "Please ask the government to postpone this work," said a Malaysian officer by radio. In other words, they were asking for the construction of the lighthouse to be stopped.

The Indonesians regarded that warning like a passing breeze. The mission from the government was clear: the lighthouse must stand. "We have learnt from Sipadan and Ligitan," said First Admiral Soeparno. He said Indonesia had been given a bitter lesson in the Sipadan-Ligitan dispute. When Indonesia was trying to maintain the status quo of the islands' ownership, Malaysia had gone ahead and built a resort there. "We won't compromise again," said Soeparno.

This week, construction of the lighthouse is scheduled to be completed. After completion, the existence of the lighthouse will be officially notified to the International Maritime Organization (IMO). "That lighthouse belongs to Indonesia," said Soeparno, smiling. Recognition by the IMO will become an indirect recognition by the international community of Indonesia's territorial rights there.

The anger over the seas has now spread ashore. The atmosphere has heated up considerably following anti-Malaysia demonstrations in a number of Indonesian cities: Pekanbaru, Ambon, Surabaya and Solo. In Jakarta, demonstrators closed off the gates to the Malaysian embassy in Kuningan, South Jakarta, last Wednesday. A number of centers trying to recruit volunteers to fight Malaysia have been set up, backed by the yells of hundreds of volunteers ready to die fighting Malaysia.

The response from the legislative has been no less strong. DPR Commission I has refused to take the Ambalat case to the International Court. "Ambalat is unquestionably part of our territory," said Commission I Chairman, Theo L. Sambuaga, last Monday week. The Commission has also asked the government to take a firm stance. Every border violation by Malaysia must be acted on and any violators must be expelled by force. The DPR also asked the government to recall the Indonesian Ambassador to Malaysia. Theo said this stance was not intended to destroy relations between the two countries. "This is our disappointment over Malaysia's trespassing of our territory," he said.

Malaysia itself appears to be unwilling to step back. Malaysian Foreign Minister Dato Seri Syed Hamid Albar said Indonesia's claim was still based on a Dutch-made map. Under that map, he said, Sipadan-Ligitan, too, was still in Indonesian territory. In fact, he said, that area is now in Malaysian hands under a decision by the international tribunal.

Taking the islands as the maritime boundary reference, Ambalat should also be considered to be Malaysian territory. "This is not an easy matter, it is a very complex issue," Hamid said when visiting Jakarta, last Thursday week. Previously, in Kuala Lumpur, he had stressed that Malaysia's position was to defend its interests and territorial integrity in that sea.

The border squabble has also caught the attention of President Susilo Bambang Yudhoyono. In his visit to the border at Nunukan, East Kalimantan, last Tuesday, President Yudhoyono even found time to visit Indonesian troops posted at Sebatik Island. Differences over territory borders as in the Sulawesi Sea, said Yudhoyono, do not just happen with Malaysia, but with other nations, too. Even so, Indonesia will not take the path of confrontation. "I believe we are not enemies," said the president.

In Jakarta, the next day, the president received Malaysian Foreign Minister Syed Hamid Albar at the State Palace. After the meeting, Hamid appeared to have softened a little. He said that, at the highest level, the Indonesian President and Malaysian Prime Minister would maintain the two countries' good relations. As would the military commanders of both. "And we, too," he said, when accompanied by Indonesian Foreign Minister Hassan Wirajuda.

Minister Hassan says both countries will shortly meet, on March 22-23. In order to create a more favorable environment, he said, the presence of warships was no longer needed in the disputed area. The warships, he added, would only be there on routine operations.

***

Although the situation is changeable—occasionally tense and sometimes relaxed—there seems to be an "agreement" between the two countries not to use weapons. The Tedong Naga, for instance, may have two small guns—20 millimeter and 12.7 millimeter—but the high-speed Indonesian vessel has no intention of using them. The same goes for the Malaysian ships whose actions aroused such wrath. Their guns are still covered with tarpaulins. Apparently, neither side wants to be accused of triggering an armed conflict.

Both fleets seem to be just posturing at sea. From the frigate KRI Karel Sasuit Tubun last Friday, Tempo observed six Malaysian vessels, four of which were warships, facing three Indonesian ones. Two of the Indonesian ships appeared large and powerful, while the Malaysian boats were smaller. However, seeing how many Malaysian ships there were, tension swept the bridge of the KRI Sasuit Tubun.

As we closed in on Unarang, the officers on the bridge could be seen to be getting busier by the minute. Binoculars were raised. The map made by the Indonesian Navy's Hydro-oceanographic Service that was full of latitudes and longitudes was rolled out to confirm the positions or bearings of the Malaysian ships. Apparently, the Malaysians had taken up positions half encircling and facing the Reef. One of them, given a large identifier, was too close to it.

"Hold your course!" Commander of the KRI Sasuit Tubun, Lt. Col. I Nyoman Ariawan instructed the helm. Seeing the Indonesian frigate arrive, the two Sabah police patrol boats distanced themselves from the Reef.

When the Sasuit Tubun approached the Reef, dusk was beginning to set. The ships facing each other began to turn on their lights, one by one. The barge's lights appeared dim in the middle, surrounded by those of the 10 ships. "They [the Malaysian boats] will shortly go home. Then only our ships will be left here," said Col. Marsetio, optimistically. The next morning, the Malaysians will likely come back. There might be some action, just like any other day.

The Eastern Fleet Commander, First Admiral Soeparno, said security measures would continue until a political solution was reached. Along the border, at least two ships would be at sea every day. The remainder would berth at Tarakan.

The Indonesian Naval strategy is very simple. Chief of Staff of the Line of Battle, Navy Col. Marsetio, said the Indonesian Navy's actions at Ambalat are simply to control Indonesian waters. By putting enough warships there, a balance of forces will be achieved. "Control of our waters is demonstrated by putting warships there," he said.

Admittedly, a war is still a long way off. Especially as the commanders or captains of the Malaysian patrol boats have actually studied in Indonesia. Just take Maj. Azeman bin Yusoff, the captain of the KD Baung. Azeman is a graduate of the Indonesian Naval Staff and Command School (Seskoal) in 1999. The same goes for Commander Zakaria bin Mansoor, captain of the KD Paus, who was a Seskoal student in 2001. "They were my students," said Marsetio, a former teacher of maritime doctrine and strategy at the school.

As was the case with Sipadan-Ligitan, apparently this dispute, too, is likely to end up on the diplomatic negotiating table.

By Nezar Patria, Arif Kuswardono (Tarakan), Faisal Assegaf (Jakarta)

***************

War Machines—Indonesia v Malaysia

INDONESIA

America’s embargo on the purchase of military equipment has led to a degradation of Indonesia’s military capability. Even its latest fighter aircraft, the Russian-made Sukhoi SU-27 SK and SU-30 MK, still have no weaponry. Of its 12 F-16 “mainstay” fighters, two have crashed and only eight of the remainder are flight-worthy.

Aircraft and Helicopters

• Eight Hawk MK 109s based at Pekanbaru and Pontianak
• 32 Hawk MK 209s based at Pekanbaru and Pontianak
• Six CN235s based at Halim
• Eight F27-400Ms based at Halim
• One SF260MS/WS based at Halim
• B707-3MIC
• Seven F27-400M
• One F28-1000/3000
• One L100-30
• One C-130H-30 based at Halim
• One NAS332L1
• One L100-30
• One EC-120B
• 12 Bell 47G-3B-1 helicopters based at Kalijati
• Five F-16As based at Madiun
• Five F-16Bs based at Madiun
• F-5E based at Madiun
• F-5F based at Madiun
• Hawk Mk53 based at Madiun
• Two Su-27SK based at Makassar
• Two Su-30MK based at Makassar
• NC212M-100/200 based at Malang
• Ce 401A based at Malang
• Ce 402A based at Malang
• 10 Bronco OV-10F based at Malang

Warships
A 114-strong fleet of various types (one-third for routine operations, one-third for training, and the remainder for maintenance)

Personnel

• Number of troops (all services): 250,000
• Annual military budget: US$1 trillion (1.3 percent of GDP)

MALAYSIA

The armed forces of our neighboring country are called The Kingdom of Malaysia’s Forces. When they were initially formed, they used military equipment made in the UK. Now it comes from a number of countries, including aircraft made in Indonesia.

Warships

• One submarine with a 20 mm cannon
• Two fast troop transport boats
• Four French patrol boats armed with Exocet MM38 missiles and Bofors cannons
• 24 warships based at four locations: Lumut, Sandakan Sabah, Kuantan, and Labuan.
• The KD Kerambit, stationed around Ambalat is one of the vessels based at Sandakan, Sabah.
• Two South Korean patrol boats equipped with 100 mm Creusot Loire guns, 30 mm
• Emerlac cannons, and anti-submarine weapons. These are based at Kuantan
• Four Swedish ships equipped with MM38 Exocet missiles, 57 mm Bofors, and 40 mm Bofors guns.
• Four frigates, two secondhand from the Royal Navy (UK)
• Six German corvettes
• Four Italian minesweeper patrol boats
• Two multipurpose command and support ships made in Germany and South Korea
• One Sealift vessel
• Two Hydrofoil boats

Fighters

• F-5 E
• Hawk MK108s based at Alor Setar, Kuantan, and Labuan
• Hawk MK-208s based at Alor Setar, Kuantan, and Labuan
• Eight F/A-18Ds based at Alor Setar
• MiG-29 based at Kuantan
• SU-30 based at Kuantan
• F-28 based at Kuala Lumpur
• Falcon based at Kuala Lumpur
• Beech 200T based at Kuala Lumpur
• C-130H based at Kuala Lumpur
• CN-235 based at Kuala Lumpur
• S61A-4 based at Kuala Lumpur, Kuching, and Labuan
• AS61N-1 based at Kuala Lumpur
• S70A-34 based at Kuala Lumpur

Personnel

• Number of troops (all forces): 196,042 (2002)
• Annual Military budget: US$1.69 trillion (2.03 percent of GDP)

Sources: Processed from www.scramble.nl, www.nationmaster.com, TDLM


Ambalat Show of Strength

The Indonesian Military

• Four battleships patrolling the Ambalat Block and Unarang Reef (KRI Nuku-873, KRI Singa, KRI Wiratno-879, and KRI Tongkol)
• Three battleships berthed at Tarakan, East Kalimantan (KRI Karel Sasuit Tubun-356, KRI Rencong-622, and KRI Tedung Naga)
• Two maritime surveillance Nomad P-840 and P-834 aircraft
• Two Cassa aircraft
• Two Bolko helicopters
• Four F-16s parked at Sepinggan, Balikpapan, South Kalimantan
• One Boeing 737 surveillance aircraft
• 150 marines guarding the Unarang Reef lighthouse

The Kingdom of Malaysia’s Military

• Four warships (KD Kerambit-43, KD Paus-3507, KD Sri Melaka-3147, KD Baung-3509 and KD Pari)
• Two small patrol boats (Series PC Perlis-47 and FPB G 3510)
• One land-based Beechcraft B 200 T Super King maritime surveillance aircraft
• One police surveillance aircraft

By Sunudyantoro

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Source: The Jakarta Post
Date: March 15, 2005

National News
Badawi says KL won't use force
By Tiarma Siboro, Jakarta

Malaysian Prime Minister Abdullah Ahmad Badawi has promised to avoid both the use of force and legal action through the international tribunal to resolve its dispute with Indonesia over an offshore oil field in the Sulawesi Sea.

The prime minister, however, insisted on Malaysia's sovereignty over the Ambalat block.

Badawi made the statements during a meeting on Monday with four Indonesian Muslim leaders -- including Said Aqiel Siradj of Nahdlatul Ulama, Din Syamsuddin of Muhammadiyah, Cholil Badawi of the Indonesian Islamic Propagation Council and Nazri Adlani of the Indonesian Ulema Council -- who were visiting Kuala Lumpur.

"During the meeting, Pak Badawi said that his country had no intention of occupying certain areas of our (Indonesia) territory. He, however, stressed that the borderlines marking Indonesian and Malaysian territory are overlapping," Said told The Jakarta Post over the phone after Monday's meeting.

"Pak Badawi believed that we (Indonesia and Malaysia) could pursue bilateral talks to determine which part of the area belongs to us and which part is Malaysia's," he added.

According to Said, the bilateral talks are slated to be held on March 23 and will be attended by foreign ministers from both Indonesia and Malaysia.

During the meeting, the Muslim leaders also asked whether Badawi would pull back Malaysia's warships and patrol boats that had been deployed nearby the Ambalat offshore area. The prime minister replied that he would maintain the presence of the ships and patrol boats in a bid to secure the maritime territory.

The Ambalat oil field is situated near the islands of Sipadan and Ligitan that had been in dispute for years between Malaysia and Indonesia. The International Court of Justice eventually awarded Malaysia sovereignty over the islands in 2002. However, Indonesia insists that Malaysia's maritime territory extends only 19 kilometers from the islands, meaning that the Ambalat block belongs to Indonesia.

The visit of the Indonesian Muslim leaders comes amid heightened tension between Malaysia and Indonesia over the border issue. Initially, they had also planned to meet with their Malaysian counterparts, but according to Said, the plan had been canceled because "most Malaysians here are not aware of the Ambalat issue."

Separately, President Susilo Bambang Yudhoyono telephoned on Monday Libyan President Moamar Qadhafi to respond to the current situation in the border area.

According to Indonesian presidential spokesman Dino Pati Djalal, the conversation lasted for about 10 minutes, during which Qadhafi expressed his concern regarding "the increasing hardship and conflict among the Islamic community."

"He (Qadhafi) expressed his dismay over the growing dispute between Indonesia and Malaysia, which are the two most important Muslim countries in the world. Mr. Qadhafi urged Indonesia and Malaysia to settle the dispute peacefully," Dino said, adding that Susilo had been receptive to Qadhafi's plea.

Malaysia chairs the Organization of Islamic Conference, of which Indonesia and Libya are members.

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Source: Time Net News
Date: March 15, 2005

Indon envoy says sorry over burning of flag

Kuala Lumpur: Indonesian ambassador to Malaysia Dr K.P.H. Rusdihardjo has apologised for the behaviour of a small group of Indonesians who burnt the Malaysian flag in Jakarta recently over the Ambalat oil field issue.

He said the act was not polite and had hurt the feelings of Malaysians.

“I want to apologise on behalf of Jakarta and hoped action can be taken against those who humiliated the national flag of Malaysia,” he said.

Dr Rusdihardjo said the Indonesian media had fanned the emotion of the people.

He said this after receiving on behalf of Indonesian president Bambang Susilo Yudhoyono a letter from a Barisan Nasional Youth delegation at the Embassy here Monday.

The 23-member delegation was led by deputy chairman Khairy Jamaluddin.

Dr Rusdihardjo said the Indonesian media had fanned the emotion of the people in the republic over the Ambalat dispute.

In the letter, Barisan Youth chairman Datuk Seri Hishammuddin Tun Hussein urged president Bambang Susilo Yudhoyono to take firm action to ease the tension in the republic over the territorial dispute.

Hishammuddin, who is also UMNO Youth chief and Education Minister, said although the action of a minority group of Indonesians did not reflect the true feelings of Indonesians in general, it hurt Malaysians.

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Source: The Jakarta Post
Date: March 16, 2005

Business and Investment
BP Migas questioned role over Ambalat
By Tony Hotland, Jakarta

Prior to its scheduled meeting with Oil and Gas Regulatory Implementing Body (BP Migas) and the Ministry of Energy and Mineral Resources, the House of Representatives questioned the role of those bodies in preventing the ongoing dispute between Indonesia and Malaysia over the Ambalat offshore oil field.

Legislator Tjatur Sapto Edy from House Commission VII overseeing energy, mineral resources and environmental affairs said on Tuesday that BP Migas and the energy ministry should have been aware of the possibility of a dispute over the oil field.

"Petronas opened the tender for exploration in Ambalat in 2003. The open bidding was announced to prospective investors all over the world," he said.

"Why weren't BP Migas, the ministry's director general of oil and gas, or (state oil and gas company) Pertamina aware about the issue in the first place? Why did they start buzzing about the concession after Malaysia announced the (tender) winner?"

Tjatur said that if those domestic institutions in the energy sector knew about the tender in the first place, there could have been official protest letters sent to Malaysia to prevent the bid from going through -- a bid which international oil giant Royal Dutch/Shell won.

He also suggested that the House urge the government to put Shell on a "blacklist" along with other companies from participating in any oil tenders here in the future.

"However, it all depends on the results of the scheduled meeting with the two bodies. If we smell something fishy about Shell's involvement in the case, we'll urge the government to blacklist the firm," he told reporters.

Apart from questioning BP Migas and the energy ministry, Commission VII will also try to speak with Shell and Petronas later this week about the divisive issue.

Indonesia and Malaysia have been involved in an intense dispute over the possession of the Ambalat block, after Malaysia's state oil company, Petronas, awarded Shell the concession rights to exploit it.

Indonesia awarded a similar contract to another multinational oil giant Unocal on Dec. 12, 2004.

Previously on Sept. 27, 1999, Shell was awarded a production sharing contract by Indonesia to explore the area, but the company terminated the agreement on Oct. 4, 2001, and handed over the concession to Italian oil producer Eni.

Some local media groups here have speculated that Shell handed over the award after allegedly finding a small amount of reserves, but then turned around and participated in the Petronas tender after learning of the large amount of oil and gas reserves there.

BP Migas estimates that the oil deposits in Ambalat could range from 100 million barrels to one billion barrels.

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Source: The Jakarta Post
Date: March 16, 2005

Opinion and Editorial
Ambalat, where the game nations play
By Bantarto Bandoro, Jakarta

The row between Indonesia and Malaysia over Ambalat has dragged the military as well as diplomats from both sides into a kind of a game where both are committed to defend their strategic stakes. This is the second time that the two countries have been involved in a high profile conflict, the first was during the konfrontasi era in the 1960s.

Indonesia has sent seven navy frogmen to a small reef that neighboring Malaysia has also claimed as its territory (The Jakarta Post On Line, March 14). For Indonesia, the deployment of its naval force is perhaps meant to prevent unwanted action on the part of Malaysia. The deployment, however, is in itself inadequate as a substitute for more fundamental policies and action: diplomacy.

Thus, what we are witnessing at the moment is a situation that can trigger military escalation. In such a situation, the military forces were in fact used for at least demonstration purposes. In some situations, such as the 1962 Cuban missile crisis, actual combat was averted. In other situation, however, the crises developed into full-fledged war. The 1982 conflict between Argentina and Britain over the Malvina or Falkland Islands provide an example of a crisis escalating into armed hostility.

Are we about to witness a war between Indonesia and Malaysia? We are anxious to see what will eventually happen in the Ambalat area. We are also particularly curious about how the two governments would approach problem.

There are three alternatives the two sides can take to resolve the dispute.

The first approach is known as the event-interaction approach. It focuses on the exchange of action between the states involved in a crisis.

The current Ambalat conflict started when Malaysia granted an oil concession to foreign oil company, an action that prompted Jakarta's strong diplomatic protest. As the situation developed, we see is it both a real prelude to war and an approach to avert war. By focusing on the flow of interaction between Kuala Lumpur and Jakarta, one can determine patterns that lead to the escalation or deescalation of conflict.

The second way of analyzing the Ambalat crisis is known as the decision-making approach, which stresses the importance of the perception and the manner in which the decision-makers perception can affect the selection of policies. In this regard, the situation in Ambalat is a special kind of situation for the decision makers in Jakarta and Kuala Lumpur. It is different from a normal situations as the official's perceive a high degree of foreign threat and a feeling of urgency about the situation. In such a situation, the decision makers from both sides may be apt to make less rational or more belligerent decisions.

The third approach is called the mediated stimulus-response approach, a combination of the first and second approach. In this context, the foreign policy of Indonesia and Malaysia can be viewed as cycles of stimuli and responses. The granting by Malaysia of an oil concession, believed to be within Indonesian national territory, to a foreign oil company, presented a stimulus to Jakarta's officials, who then responded by deploying military forces in the Ambalat and sending a diplomatic protest.

The Jakarta's action, in turn, presented a stimulus to the Malaysian leaders to halt temporarily oil exploration and announce its intention to solve the problem by way of diplomacy as well intensifying their sea control. Here we see that the actions of the governments in Jakarta and Kuala Lumpur were shaped -- or mediated -- by their respective decision making process.

The conflict between Indonesia and Malaysia over Ambalat is rooted in rivalry. At the regional level, there are instances which reflect how both Indonesia and Malaysia are competing for leadership. Both have a strong sense of being a great country, particularly during the Soeharto and Mahathir leadership, the two leaders played an important role in the stability and security of the region.

As stated above, Indonesia and Malaysia have already become involved in a game in Ambalat and consequently both have their own strategies to win the game. From the Indonesian side, the deployment of not so huge military forces is at least an indication of its intention to deter any further actions by Malaysia.

We can imagine also Indonesia and Malaysia in a kind of an escalation ladder. The leaders in Jakarta and Kuala Lumpur have to realize that their relations over the Ambalat issue are just like what Anatol Rapoport (1966) called a chicken game, with leaders in both countries on a ladder of escalation and each knowing that the other leader was thinking in the same way. The nature of the Ambalat crisis, can be understood best by seeing Indonesia and Malaysian as trying to manipulate, or dominate, the ladder of escalation.

The key concept here is "escalation dominance", by which both countries are able to control the crisis at any given rung on the ladder. Examples of escalation dominance would include the dominant sides (either Malaysia or Indonesia) having sufficient force advantage at a given rung of the ladder, meaning that it would lose least from any movement further up the ladder.

If both Indonesia and Malaysia are seen to be really involved in a chicken type game, then there is no such thing as stable cooperative equilibrium, because the best strategy against a "chicken" is to play for a victory, and the best general strategy is to issue threats so that the other will play "chicken". Yet, since Malaysia or Indonesia may not believe that either of them would carry out a threat of annihilation, the threats will be ignored with mutually disastrous results.

This is actually the scenario that both leaders in Jakarta and Kuala Lumpur have to avoid. Cooperation between Indonesia and Malaysia is still possible in such a crisis, if the leaders of the respective countries have sufficiently opportunity to meet again in the future, so that they have a stake in their future interaction.

Unrestrained rivalry between Jakarta and Kuala Lumpur, however, should not prevent both sides from taking the following steps: Prevent the breakdown of communication; avoid the tendency to misperceive the action and intention of one's adversaries, especially the tendency to exaggerate their hostility; and manage the momentum of events.

By implication, more sound policies, greater self-control and more effective policy management can help to prevent or contain the conflict.

Although national leaders from Indonesia and Malaysia may at one time, but hopefully not, be misguided in their policies, they are not necessarily aggressive. They generally do not plan to launch war on the basis of a cold-blooded calculation. Rather, they blunder into war because they lose control of the situation.

The writer (bandoro@csis.or.id) is Editor of The Indonesian Quarterly of the Centre for Strategic and International Studies (CSIS). He is also a lecturer at the International Relations Post Graduate Studies Program, Faculty of Social and Political Science, University of Indonesia, Jakarta

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Source: The Jakarta Post
Date: March 16, 2005

National News
Ambalat row concerns KL students
By Yuli Tri Suwarni and Slamet Susanto, Bandung/Yogyakarta

Azrah Hamzah, a 22-year-old Malaysian studying in Bandung, is both saddened and concerned by rising anti-Malaysian sentiment in Indonesia as a result of the dispute between Jakarta and Kuala Lumpur over the Ambalat offshore area.

A post has been set up in front of the Gedung Sate government building on Jl. Diponegoro in Bandung, where people can volunteer to fight in the event that Indonesia and Malaysia go to war over Ambalat. A sign on the post reads Ganyang Malaysia (Crush Malaysia).

The Malaysian student, who is in her third year at Padjadjaran University's medical school, said the tension between the two governments over the Ambalat block, which is rich in oil and gas deposits, concerned her.

"I am sad because we are studying here," she told The Jakarta Post.

She said she was treated well by Indonesians but was concerned that her studies would be interrupted before she finished her medical degree in another three years.

"Thank God, all my Indonesian friends and the people I meet have shown no animosity toward me. I hope the issue will be resolved soon and bring peace to Indonesia and Malaysia," she said.

Many Malaysian students have studied at Padjadjaran University's campuses in Jatinangor, Sumedang and on Jl. Dipatiukur in Bandung since the 1970s.

A spokesman for the university, Hadi Suprapto Arifin, said there were more than 300 students from Malaysia currently studying at the university, most of them at the medical and dental schools.

In Yogyakarta, the approximately 100 Malaysian students studying in this city of universities are alarmed by the rising tension between the two countries and the anti-Malaysian posts that have popped up around Yogyakarta.

However, they are convinced there will be no war and that relations, and their lives, will soon return to normal.

"The sense of anxiety has made us more aware. But we are not alarmed because we are convinced that Yogyakarta will remain peaceful," Syira Haniza, a dentistry student from Penang, told the Post recently.

Syira said that Yogyakarta was known as a peaceful city. During the riots that hit numerous cities in the country in 1998, the Malaysian Embassy set up dormitories and evacuation procedures for Malaysians in Yogyakarta, but the city remained quiet.

"Yogyakarta was not touched by the riots even though there were scenes of anarchy and looting in many other areas. It is based on these events that we are not intimidated because we are certain that Yogyakarta will be safe," said Syira.

"But I am sure there will not be a war and that everything will be settled at the negotiating table. Neither country wants to go to war because the costs would be too high," she said.

Ahmad Yusuf, a Malaysian who graduated from Gadjah Mada University's medical school in 2000, said he was positive there would not be riots or violence in Yogyakarta.

"Yogyakarta is known as an educational and cultural center, so I am sure there will not be any sweeping of Malaysian students because people are civilized," Yusuf said.

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Source: The Jakarta Post
Date: March 17, 2005

National News
Malaysian consulate temporarily closes
By Apriadi Gunawan, Medan

Several people line up outside the office of the Malaysian consulate in Medan. They were just a few of the hundreds of would-be migrant workers who were stranded on Wednesday following the closure of the consulate, apparently due to the rising anti-Malaysian sentiments in Indonesia.

Due to the closure three days ago, people wanting to work legally in Malaysia have not been able to obtain their work visas.

Dahlia binti Lolo recounted that she had lodged her work visa application a week ago, but as of Wednesday she had still not got it. "Today is the third time I've come here, and the office is still closed. I need the visa immediately so that I can get back to Malaysia and resume work," said Dahlia in front of the consulate.

Dahlia had worked legally as a maid for three years in Kuala Lumpur, but because her working visa expired she had to return to Indonesia to have it renewed.

Alfi, a staffer at a manpower recruitment agency in Medan, said that the consulate closure had affected the departure of many migrant workers to Malaysia. Malaysian employers have complained about the sluggish processing of Indonesians wishing to work in Malaysia, he said.

Responding to the complaints, Malaysian consul-general in Medan Mohd Yusoff A. Bakar confirmed that the office had been closed due to waves of anti-Malaysian protests. He said that the office would reopen when the situation returned to normal.

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Source: The Jakarta Post
Date: March 18, 2005

Ambalat, nationalism and popular interests
By Israr Iskandar, Padang

The fact that people's nationalism is still quite strong is quite admirable, given the host of problems the country is at present facing. The Ambalat case has at least demonstrated how the spirit of nationalism has "pushed back" waves of protests against the increase in fuel prices. Learning from the case of Sipadan-Ligitan, two islands that Indonesia has had to give up, the Indonesian government does not want to lose any more of its territory to Malaysia.

However the rising sense of nationalism must continue to be actualized not only in the context of protecting the state's territory from external threats but also in the context of maintaining national sovereignty as a whole. In this case, national sovereignty also means the sovereignty and honor of the entire nation. Therefore, the spirit of nationalism must also be aimed at strengthening citizens' sovereignty and honor in the economic, political, social, cultural and educational fields.

The problem is that until now the expression of nationalism in Indonesia has been limited to security matters, more particularly threats to the integrity of the state's territory, both internally (separatism) or externally. In fact, nationalism and national interests can also be interpreted as the spirit to prioritize popular interests.

In this respect, there are several examples of how nationalism and national interests have served as a mere slogan in the interests of the political elite. Take, for example, the recent increase in fuel prices, which the government claims it has introduced in the interests of the poor. The disadvantaged people are supposed to benefit from the funds generated by the fuel subsidy cut through health care, education and improved infrastructure. Based on past experience, however, compensation funds for the poor have never reached the intended target.

It is quite reasonable, therefore, to doubt these claims. Ironically, when the people, including the poor who have been promised the compensation funds, are protesting against the increase in fuel prices because it will make their lives more difficult, members of the House of Representatives have, instead, asked for a pay increase.

Besides the political leaders, the economic leaders have also rushed to the government to ask for "compensation" in the form of tax concessions.

Nationalism is also a paradox when it come to how national and local leaders respond to the issue of privatization, a program that has been accelerated in the present era of reform. The supporters of this program claim that the privatization of state-owned enterprises is in the interest of the nation. Meanwhile, those objecting to this program claim that their actions are in the people's interests and they have even put forward issues related to economic nationalism.

After the program of privatization has been implemented, the poor remain poor: The poverty level and the rate of unemployment remain high. On the other hand, the argument put forward by those who are against privatization that the government should own the majority shares in state-owned enterprises should also raise doubts. Until now, most state-owned enterprises have shown poor performance and corrupt practices.

The local leaders have also frequently claimed that they act in the interests of the public while in fact they are protecting their own interests. This was true, for example, in the case of members of West Sumatra Legislative Assembly involved in corruption practices regarding the regional budget funds. They insinuated that non-governmental organizations, which had brought up cases against them, were funded by foreign parties.

They said there was a conspiracy by foreign quarters to corner Muslims because many of these corrupt councillors were top-ranking members of Muslim parties and some were even noted religious elders. Obviously, they turned the facts upside down. While facing the law, these councillors still had the gall to claim that they acted in the interests of the public (the Muslims).

Paradoxes are also seen when national interests are touted to justify oppression of the people. Defending the Unitary State of the Republic of Indonesia (NKRI) has even been used as a means to justify human rights violations by state apparatuses against civilians.

The military is indeed obligated to defend the national integrity of the state from the threat of separatism as has happened in Aceh and Papua but crimes against humanity by the military must be dealt with according to the law and should never be hidden behind the slogan of defending the territorial integrity of the country.

During Soeharto's tenure, territorial integrity was used to legitimize efforts to maintain a centralized system. In fact, it is this centralized system that had brought corruption into the government. Centralized administration even led to a wider gap in development between Java and areas outside Java and the divide between the rich and the poor.

In this context, we have our worries that the territorial integrity, which is often heard amid the issues of decentralization and special autonomy (as in the cases of Papua and Aceh) in the last few years, is perhaps intended to protect the interests and the privileges of certain elite groups in Jakarta. They realize that their interests will be threatened once the policy of regional autonomy and special autonomy is properly implemented.

Nationalism is not just for the sake of nationalism itself. Neither should nationalism be used in the interests of a few people in an elite group. In reality, nationalism should be implemented in the interests of all citizens. The people themselves have kept a strong sense of nationalism, as reflected in their response to the Ambalat case. But in the case of Indonesian migrant workers (for example) the people never feel that they are citizens.

It is our job in future to make sure that the actualization of nationalism may link people's basic needs in the economic, social, political and other fields.

The writer is a lecturer of political science at Andalas University, Padang.