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Indonesia & Nansha Islands Dispute

Spratlys > Collection > Claims > Indonesia & Spratly Islands Dispute

Drawn into the fray: Indonesia's Natuna Islands meet China's long gaze south.
( Asian Affairs: An American Review )

Asian Affairs: An American Review ; Johnson, Douglas; 09-22-1997

In 1991, when Indonesian foreign minister Ali Alatas warned of the Spratly
Islands dispute becoming "the next potential conflict area" for Southeast
Asia, he could not have realized the prophetic weight that his words
carried for his own nation's future.(1) For despite its intention of
maintaining a respectable position above the fray through its role of
detached mediator, Indonesia found itself drawn into this "potential
conflict area" by the powerful undertow of the South China Sea dispute.
Just two years after Alatas's warning, during the 1993 Indonesian-
sponsored Surabaya workshop on the Spratlys, China demoted Indonesia from
"mediator" to "unwilling participant" when China presented a map displaying
its "historic claims," encompassing not only nearly the entire South China
Sea but al so a portion of Indonesia's Exclusive Economic Zone (EEZ), off
the Natuna Islands.
The Natuna Islands, located approximately 150 miles northwest of Borneo,
form the only Indonesian territory even approaching the Chinese- claimed
Nanshan (Spratly) Islands.(2) To overlap any part of Indonesia' s EEZ,
then, China's "historic claims" had to include the portion of the EEZ
radiating north from the Natunas.
But China, long perceived as Indonesia's nemesis, could not have claimed a
more sensitive, resource-loaded sea area. Located approximately 150 miles
northeast of Natuna Besar (the largest of the Natuna island group), and
well within Indonesia's two hundred nautical mile EEZ, is perhaps "the
largest concentration of gas reserves in the world." At an estimated 210
trillion cubic feet, it is certainly one of the largest untapped gas
fields.(3) More important, the Indonesians recently agreed to a $35 billion
deal with Exxon, signed by President Suharto himself, for the reserves'
development.(4) Although gas from the field should start flowing sometime
early in the next century, the Natunas are already producing oil at a rate
of approximately thirty-five thousand barrels a day, and they also provide
Indonesian fishermen with thousands of square miles of sea area,
theoretically without competition from foreign fishermen.(5) But of course
the big story is the enormous foreign-currency earning potential of the
natural gas reserves.

China's claim to the sea area around the Natunas (renamed the " Natuna
Sea" by the Indonesian government) poses an enormous challenge to the
Indonesians.(6) The challenge raises some weighty questions for both the
original participants in the South China Sea dispute and for ASEAN (the
Association of Southeast Asian Nations), now that Indonesia, the largest
member and core of ASEAN, is directly and precariously involved.(7)
One obvious question is the effect that China's claim to the seabeds around
the Natunas will have on ASEAN solidarity. Will China's declaration be what
the loose-knit regional stabilizer needs to bring it together- -under
Indonesia's leadership--into a tighter, security-based alliance? Or will
China's move drive a wedge between those ASEAN members who must confront
China in the South China Sea and those who do not have to do so (and who
have no interest in jeopardizing their potentially lucrative economic
relationships with China)? Now that Indonesia has become a participant in
the South China Sea dispute, can it retain its role as "honest broker"? If
not, will another ASEAN member attempt to fill its shoes, or will the
dispute spiral out of control?
One might also ask whether China is signaling that it is prepared to
directly challenge ASEAN's center of gravity. Perhaps it is attempting to
create division within ASEAN. China has already sent warships to areas in
the vicinity of the Natunas: How hard is this nation, whose relations with
Indonesia were "unfrozen" a mere six years ago, ready to push to force the
Indonesians to form some sort of compromise?
There is also the question of Indonesia: Will its role as a regional leader
be tarnished when the country is tossed into the South China Sea
fray--especially at a time when ASEAN's center of gravity is moving north?
Can Indonesia's tradition of autonomy and nonalignment hold as a powerful
adversary moves into a power vacuum? Will the New Order tradition of quiet
diplomacy be abandoned as its vital interests are threatened more directly?
Will Jakarta, heavily influenced by the military, be bellicose toward China
in its attempt to maintain Indonesia' s leadership position in ASEAN?

The latter two of the questions are the easiest to answer--both with a
resounding "no." Led by Foreign Minister Alatas, Indonesia' s public
response to China's claim was quieter than quiet--it was unheard for nearly
two years. Though a diplomatic note was sent to Beijing soon after the
Surabaya workshop of August 1993, the Indonesian government, to avoid
raising tensions with the Chinese, made no public acknowledgment of its
diplomatic note, nor did it disclose China's claim, until 10 April 1995.
And at that time, Alatas only went so far as to seek clarification from
Beijing on the status of its maritime claim to the area surrounding the
Natuna Islands.(8) Although Alatas did use the occasion of a strong ASEAN
response to China's occupation of Mischief Reef (claimed by the
Philippines) as a backdrop for seeking clarification from China, the fact
that he waited three weeks after ASEAN's statement on Mischief Reef
suggests that Alatas wished to avoid the appearance that Indonesia was
taking part in a concerted diplomatic attack on China.(9)
Indonesia's Foreign Ministry spokesperson, Irawan Abidin, said of his
government's long-held silence on its diplomatic note to China, "We didn't
want to make a big fuss out of it." Indonesian officials feared dignifying
China's historic claims with too formal a response, thus granting them a
level of legitimacy. As Alatas cautioned, "Repetition of an untruth will
ultimately make it appear as truth."(10)
Alatas was adamantly against lending any credibility to the Chinese claim.
He asserted that the Chinese map could not be taken seriously because it
gave no coordinates or other explanatory marks. According to Indonesia's
national news agency, Antara, Alatas said, "They cannot make a real map
just by indicating certain points. It is therefore considered an
illustrative map and not a real one." One week after Indonesia's armed
forces chief, Feisal Tanjung, declared that the military was prepared to
defend Indonesia's territorial waters around the Natunas and ordered a
small naval exercise in the area as proof of that claim, Alatas cautioned
the Indonesian citizens, the press, and (likely) Tanjung, not to exaggerate
or become emotional over the unfounded Chinese claims.(11)

Then, in June 1995, China attempted to disrupt Alatas's strategy of
downplaying China's "historic claims." Its Foreign Ministry spokesperson,
Chen Jian, confirmed that China had no dispute over the possession of the
Natuna Islands but added that China was willing to hold talks with
Indonesia on the demarcation of their common sea border. After first
conferring with Suharto, Alatas responded: "We appreciate the spirit in
which the spokesman made the statement. But Indonesia does not see it has a
sea border problem with China, or the necessity to have sea border
delimitation. China is far away to the north." He continued to minimize the
significance of the issue by concluding: "On Natuna, there is no claim from
China and there has never been a problem between China and Indonesia. So
there is no question to be discussed."(12)
Alatas departed from his strategy slightly when he traveled to Beijing in
July 1995 to assess China's intentions with regard to the issue. He
returned practically empty-handed, repeating what was already known--that
China had never claimed the Natuna Islands, and that the problem lay in the
demarcation of the sea border between the waters of Spratlys and the
Natunas. What was new was China's ratification of the 1982 UN Convention on
the Law of the Sea. Alatas noted confidently that "the convention clearly
defines what an archipelago is," referring to the fact that China, as a
continental power, could not draw baselines around the Spratly Islands, as
could an archipelago, and thus claim the South China Sea as its own
territory.(13) Of course Alatas, knowing the Chinese well, probably did not
believe what he was saying, as the Chinese had made their own rules in the
Indonesia's public treatment of China's "historic claims" did indeed
demonstrate its quiet foreign policy in the face of a threat to its vital
interests. But it was not a policy of acquiescence. On the contrary, the
Indonesians' policy of ignoring the Chinese claims was equivalent to a
silent but purposeful slap to China's face.
Another part of Indonesia's quiet foreign policy response to China' s bold
challenge has been its behind-the-scenes efforts to shore up its political
position in the region. The country's most visible accomplishment in this
respect is its recent completion of a security treaty with Australia. Some
people cite this treaty as grounds for claiming that Indonesia is
abandoning its policy of nonalignment in the face of the Chinese threat.

Indonesia probably felt itself pushed toward the treaty with Australia, a
non-ASEAN nation and a "Western power," both because of China's rising
power and willingness to use it, and because of the expected decline of
U.S. power in the region. However, Indonesia cannot be described as
abandoning nonalignment. As recently as November 1994, it rejected a U.S.
request to use Indonesian waters for American "floating bases"; Alatas
stated, "From early on, we have said that there is no need for foreign
military bases in Southeast Asia."(14) Even the standing U.S. request to
use an Indonesian flight-training facility in Sumatra as a replacement for
its former facility at Crow Valley in the Philippines is continually put
off by the Indonesians due to their historic sensitivities toward the
presence of foreign forces (especially those of a nation from outside the
region, and a superpower no less) on Indonesian territory. The Indonesians,
then, have not given up on nonalignment, but they may have made compromises
that they would not have twenty-five years ago.
Part of Indonesia's effort to shore up its position in the region has been
its attempts to facilitate cohesion among its ASEAN partners to at least
face, if not face down, aggressive Chinese behavior. However, even
Indonesia's direct involvement in the South China Sea dispute has failed to
pull ASEAN nations together convincingly into a tighter, security-based
Indonesia's ASEAN partners appear wary of provoking China by confronting it
as a group. In fact, some ASEAN diplomats consider Indonesia's China
strategy too aggressive, and they privately accuse Indonesia of upsetting
China by trying to convert its unofficial workshops on the South China Sea
into official forums.(15)
Such thinking might be responsible for the cold shoulder Indonesia received
from its ASEAN partners in the summer of 1994 when Hashim Jalal, a senior
Indonesian diplomat, visited ASEAN nations to rally support for Indonesia's
"doughnut formula" for the South China Sea. The proposal would have lopped
off a large portion of China's claim to the South China Sea by extending
all littoral states' EEZs two hundred miles into the sea. The resulting
unclaimed area in the central South China Sea--the "hole in the doughnut,"
where most of the Spratly Islands are found--would then be negotiable for
joint development.(16)
The ASEAN states' rejection of this formula seems to confirm the words of
Tim Huxley that "beneath the superficiality of the common ASEAN position on
the South China Sea . . . ASEAN's membership remains divided in its
attitude toward China."(17) The remarks of a senior Malaysian diplomat
referring to Indonesia's failed proposal serve as a good example of this
point. "Let's face it," he said, "China is too big and powerful. If it says
it won't accept the multilateral approach there is no point pushing that."
He demonstrated that that fact did not necessarily adversely affect
Malaysia. Whereas Indonesia used multilateralism as its tool, the Malaysian
diplomat believed that his nation was in the position to strengthen
relations with China by offering it significant trade and investment.(18)
As long as a few important ASEAN member-states believe they have more to
gain by wooing China than by displaying solidarity against Chinese
encroachment against its neighbors, any ASEAN "position" on China will ring

Indonesia's new incentives for encouraging regionalism have, however, had
some positive effects. In late August 1996, Indonesia and Malaysia
conducted a joint military exercise involving five thousand troops in
Kalimantan (the island shared by Indonesia, Malaysia, and Brunei), in which
they fought an imaginary aggressor country with procommunist leanings. The
event was significant enough to warrant a response from the Chinese, who
warned countries in the region not to further "complicate" the situation in
the South China Sea.(19) Indonesia and Malaysia have also recently
displayed a will to cooperate by submitting a sovereignty dispute of their
own (over the islands of Sipadan and Ligitan, off the east coast of Borneo)
to the International Court of Justice.(20) It is important to weigh those
small steps toward cohesion against ASEAN's past failures so as not to
become too pessimistic about ASEAN' s future as a more serious,
security-minded organization.
On the whole, Indonesia's response to China's bold claims has been
carefully conducted, in a manner suitable for a regional leader. In
contrast to the Philippines' shrill call for help from its ASEAN partners
following its belated discovery of the Chinese occupation of Mischief Reef,
Indonesia has maintained its tradition of quiet diplomacy when dealing with
its ASEAN partners. Indonesia also recently showed dramatically that it
does not need to hide behind "Mother ASEAN" to protect its sovereignty. In
an act of uncharacteristically "loud" diplomacy, Indonesia recently
conducted its largest combined military exercise in four years; over 19,500
servicemen, fifty warships, and forty combat aircraft participated. The
exercise was entirely centered on the Natuna Islands. Officially, the
exercise's purpose was to test and improve service interoperability in
meeting external threats. Indonesian officials stated that the exercise was
not intended as a show of force. Nor was it "based on considerations of a
perceived threat from a particular place." However, Lieutenant General
Wiranto declared that he "could not help it" if there were "observers who
[chose] to see it that way." (21)

Another "loud" move (although it is questionable whether it was intended
to be loud or dead quiet) was the visit of Foreign Minister John Chang of
Taiwan to Jakarta to meet with his counterpart Alatas on 4 September 1996.
When China first confronted Jakarta with this report, the Indonesians said
that the visit had not taken place. But when the visit was reported by
Indonesia's own press, China expressed its "serious concern."(22) Although
the visit was not openly publicized, it is possible that it was intended to
be detected by the Chinese. In conjunction with its two military exercises,
Indonesia might have been signaling Beijing that it would not be cowed by
China and should not be handled either like an isolated Vietnam of the late
1970s and '80s, or like a peripheral ASEAN state such as the Philippines.
A more effective and concrete deterrent to China than Indonesia' s
demonstrations of force may be the grandiose plan that Indonesia has
proposed for the development of the Natunas. Under the direction of the
state minister for research and technology, B. J. Habibie, Indonesia has
raised the stakes on the Natunas by announcing plans of economic
development for the islands that would dramatically increase their worth to
Indonesia, and therefore increase the cost of China' s claiming--not to
mention taking--the islands. If the Natunas should become an integral part
of the Indonesian economy, Indonesia and its ASEAN partners (and very
likely the United States) would become less apt to tolerate Chinese claims
to them.
Under Habibie's ambitious plans, the islands would become integral not just
to the economy of Indonesia but to that of the entire region. Habibie
believes that the Natunas' estimated 210 trillion cubic feet of liquefied
natural gas (LNG) reserves will generate the huge sums of foreign currency
necessary to establish Natuna Besar as a center for high-tech industries, a
hub for trade and services, and a prime tourist destination. He cites the
expected doubling of demand for natural gas in the next fifteen years from
countries such as Japan, South Korea, and Taiwan (all reducing their
reliance on oil) as reason to believe that Natuna can develop into
"something complementary to Hong Kong by 2020 to provide services to the
Asian middle class."(23)
Indeed the plans are earnestly being pursued: The Indonesians have enacted
new tax laws that grant breaks to foreign investment in frontier areas such
as Natuna; the Indonesian Transmigration Ministry has been working since
August 1995 on a major plan to increase transmigration to the Natunas; the
military has announced a stepping-up of its patrols in the "Natuna Sea"
(which immediately produced significant results, as fifty Chinese fishing
boats were detained within two weeks of this announcement); the Indonesians
began construction for a harbor on the southern end of Natuna Besar in
1993; and talks are being held with both Thailand and Malaysia about
constructing a LNG pipeline through the latter to the former.(24)

Indonesia's relationship with China is increasingly precarious, but to
date, no great changes in regional relations have resulted. ASEAN cohesion
has neither greatly benefited from Indonesia's inclusion in the South China
Sea fray, nor has it been shaken. The plan to make the Thais beneficiaries
of Natuna's liquefied natural gas is likely to help to avoid any future
division between the littoral ASEAN states and ASEAN's northern continental
states centered on Thailand. If Thailand is offered this additional power
source, which could be used for leverage in negotiations with the Chinese
over hydroelectric power generated from the Mekong River, Thailand might be
more free to support its ASEAN partners facing China in the South China Sea.
Nor has there been a change in Indonesia's foreign policy since the
revelation of the Chinese claims. Indonesia has attempted, and will
continue to attempt, to distance itself from its awkward inclusion in the
disputes of the South China Sea and thereby maintain its role as "honest
broker" to the area. It is important to note that Alatas' s policy of
publicly ignoring China's claims has worked insofar as Indonesia's Surabaya
workshop of 1993 was not its last. Indonesia wishes to preserve its role as
mediator and also maintain its image as a nation that cannot be pushed
around. This will not lead, however, to a militarization of the conflict on
the part of the Indonesian military (the ABRI). Its leaders know that they
lack the air- and sea-lift capability that would be necessary to gain a
military victory in the remote Natunas. Indeed, since 1966, when
Indonesia's policy of "confrontation" toward its neighbors was terminated,
the ABRI's budget has been kept at low levels both to free funds for
economic development and to keep Indonesia's smaller (and once threatened)
neighbors at ease.(25)
In its role as regional leader, Indonesia is still incapable of rallying
the ASEAN troops to a position of strength. But it has continued to be a
soft-spoken regional power, and it is likely that Vietnam, which carefully
watched Pertamina's negotiations with Exxon on the Natuna deal, will use
Indonesia's methods as a model for dealing with Chinese claims against its
own EEZ in the Gulf of Tonkin.
And what of China itself? What can be said of the fact that two years ago
it emerged from the Mischief Reef affair with a bloody nose, and yet now it
appears to be challenging the core state of ASEAN? There is a large step
between swiping an unoccupied and unnoticed reef belonging to a marginal
and militarily weak member of ASEAN, and challenging ASEAN's core nation in
a location that it sees as central to its future.
Before growing too anxious over China's behavior toward Indonesia, it is
important to recall that its claim to the waters north of the Natunas came
a year and a half before its Mischief Reef miscalculation. It is therefore
unlikely (despite the recent propaganda theme "I Love Our Nation's Blue
Territory" in the People's Daily, urging "ocean consciousness" among
Chinese) that China is prepared to embark on a course of confrontation in
the South China Sea with Indonesia--or any other ASEAN state--at this
It is more likely that with its presentation of "historic claims" at the
Surabaya workshop, China was pushing at the limits to see how much it could
come away with. And the Chinese have apparently decided to keep pushing. By
setting territorial baselines around the Paracel Islands (which a
continental power may not do under the 1982 UN Convention on the Law of the
Sea), and announcing that it will set more baselines "at another time"
(presumably around the Spratly Islands, which would give China an EEZ
extending to the Natunas), Beijing may be waiting for its own power
projection capability to mature. Or it may be waiting for favorable changes
to occur in the region before pressing its claims more forcefully.

A good reason for China not to back off from its claim to the Natunas'
seabed--even after running into the unexpected degree of ASEAN protest over
Mischief Reef--is the potential for a vast reduction of both Indonesia's
strength within ASEAN, as well as Indonesia's energy to attend to the
Natunas, should a chaotic power struggle follow Suharto' s passing from the
scene. Although it is unclear just how far from smooth Indonesia's transfer
of power will be, it goes without saying that a growing China will continue
to press its great weight upon the ASEAN states lying on the South China
Sea, and it will work to enlarge the holes within that loose organization
so as to deal with the nations individually. Indonesia will likely remain
the center of opposition to such an effort, especially if its interests in
the Natunas are increasingly challenged. But if China's capability to
project its power increases, and the comforting influence of the region' s
stabilizer, the United States, is perceived as waning, ASEAN states will
only have more incentive to cut individual deals with China rather than
unite upon increasingly hollow ground.
(1.) "Live and Let Live," Far Eastern Economic Review, 11 July 1991, 12.
The Spratly Islands and the waters surrounding them are claimed in part or
in full by China, Taiwan, Vietnam, the Philippines, Malaysia, and Brunei.
The seabeds surrounding these atolls, reefs, and islands (generally too
small to support life) are thought to be loaded with oil and natural gas
(2.) Even the Natuna Islands are four hundred distant miles from the
nearest Nanshan islands.
(3.) "Natuna Deal: World's Largest Gas Reserves," News and Views Indonesia
[a publication of the Indonesian Foreign Ministry] September 1994, 5;
"`Clarification' of PRC Maritime Maps Sought," Foreign Broadcast
Information Service, East Asia (hereafter FBIS, EAS) 95-067, 7 April 1995;
and Simon Sinaga, "No problem with China over Natuna Isles, Says Alatas,"
Straits Times, 27 June 1995, 15.
(4.) FBIS, EAS 95-067, 7 April 1995.
(5.) "Keeping Tabs on Oil-Rich Natuna Islands," News and Views Indonesia,
August 1995.
(6.) "Indonesian Canute Rolls Back the South China Sea," VOGR (Part 3),
September 1993. Online: http://www.nerve.net/Vietnam/pages/viet0327.htm.
The name "Natura Sea" is also used continuously by the Indonesian Foreign
Ministry's publication News and Views Indonesia.
(7.) ASEAN is comprised of Brunei, Indonesia, Malaysia, the Philippines,
Singapore, Thailand, and since 1995, Vietnam.
(8.) John McBeth, "Oil Rich Diet," Far Eastern Economic Review, 27 April
1995, 28.
(9.) The issue had been brought up privately to the Chinese during the
Sino-ASEAN meeting in Beijing. The PRC delegate responded that "both sides
should discuss the issue in a bilateral forum and even jointly develop the
area." Beijing did not want it to become an international issue. "PRC
`Claim' over Natuna Island Area Discussed," FBIS, KAS 95-069, 10 April 1995.
(10.) Far Eastern Economic Review, 27 April 1995, 28; and Paul Jacob,
"Alatas Downplays China's Claims in Natuna Islands Map," Straits Times, 4
June 1995, 2.
(11.) Straits Times, 4 June 1995, 2.
(12.) Simon Sinaga, "No Problem with China over Natuna Isles, Says Matas,"
Straits Times, 27 June 1995, 15.
(13.) News and Views Indonesia, August 1995; and Leszek Buszynski, "Trenas,
Developments, and Challenges in Southeast Asia," in Southeast Asian Affairs
1996 (Singapore: Institute of Southeast Asian Studies, 1996), 14; Jonathan
I. Charney, "Central East Asian Maritime Boundaries and the Law of the
Sea," in American Journal of International Law 89, no. 4 (October 1995):
(14.) FBIS, KAS 94-213, 2 November 1994.
(15.) Nayan Chanda, "Divide and Rule," in Far Eastern Economic Review, 11
August 1994, 18.
(16.) Ibid.
(17.) Quoted in Mark Valencia, "The Spratly Imbroglio," in Southeast Asia
in the `New World Order' (New York: MacMillan and St. Martins, 1996), 262.
(18.) Far Eastern Economic Review, 11 August 1994, 18.
(19.) Tan Tarn How, "Don't Complicate South China Sea Situation with
Exercises, Beijing," Straits Times, 6 September 1996.
(20.) "Troubled Waters," The Economist, 12 October 1996, 37-38.
(21.) John McBeth, "Exercising Sovereignty," Far Eastern Economic Review,
19 September 1996, 17; and "Indonesia Calls Natuna Exercises a Test of
Readiness, Not a Show of Force," Straits Times, 3 September 1996, 1.
(22.) John McBeth, "Deep Background," Far Eastern Economic Review, 5
September 1996,54-55.
(23.) Paul Jacob, "Indonesia to Develop Natunas Next," Straits Times, 26
September 1996, 2; and "Batam, Natuna to Serve Asia: Habibie," Straits
Times, 29 September 1996, 3.
(24.) "Gasex Conference: All Eyes on Natuna," News and Views Indonesia,
November 1994, 4-5.
(25.) In recent years Indonesia's low defense expenditures (hovering near
1.4 percent of GDP) have ranked Indonesia last in ASEAN in terms of defense
spending as a percentage of GDR The Militar Balance, 1995- 1996 (London,
U.K.: International Institute for Strategic Studies, 1993).
(26.) "Seas of Troubles," The Economist, 25 May 1996, 37-38.


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