Tag Archives: Indonesia

Asia-Pacific, Global Analysis

It’s the Economy: Exploring Indonesia’s Piracy Problem

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International efforts to solve piracy often focus on displays of force. Whether it is the United States-led Task Force 151 in the Gulf of Aden or international operations in the Strait of Malacca, states most often revert to military or law enforcement to end piracy.

Force is not the ultimate answer. While states should certainly keep up efforts to apprehend pirates, security threats from piracy are just a symptom. The cause is inherently an economic problem.

The current peak of piracy and maritime armed robbery off Indonesia (the former outside territorial waters, the latter within) is a prime example of the economic problems at hand. Between January and September of 2014, Indonesia experienced 72 attempted and actual incidents of piracy and armed robbery, according to the International Chamber of Commerce’s International Maritime Bureau. [1] This figure is, far and away, the highest in the world, accounting for 40% of such incidents.

Indonesia sits at a maritime crossroads of the world, affording it considerable resources of which to take advantage. Indonesia is situated along the Strait of Malacca, a critical maritime trade route also bordered by Singapore and Malaysia. 30 percent of global maritime trade passes through the Strait, heading west into the Indian Ocean and east into the South China Sea. The Strait is critical due to the speed it provides to shippers, cutting two to three days off the next fastest route. [2]

Despite these advantages, Indonesia remains firmly among the world’s developing countries. Indonesia’s total GDP of $1.285 trillion ranks 16th in the world, but due to its population size of 254 million, that per capita purchasing power is significantly reduced at $5,200, placing it at 158th among all nations.

No matter where it takes place, piracy and armed robbery is most often undertaken by those who have not reached a post-material existence, instead taking action, regardless of legality, to obtain basic needs. For the 60 percent of Indonesians who live along the coastline, that makes piracy an attractive option in the face of limited economic opportunities.

The poor state of coastal communities leaves few major industries in which Indonesians can partake, the most prevalent being fishing. Indonesian fisheries represent a USD $4.4 billion dollar industry. However, due to weak government enforcement, the industry loses USD $8 million each year to illegal fishing. Such crimes are perpetrated both by Indonesians as a means of subsistence in a poor economic environment, as well as international fishers taking advantage of Indonesia’s poorly protected resources. The additional lost revenue for legitimate fishers adds economic distress. In tandem with poor or corrupt law enforcement, piracy and armed robbery quickly becomes an attractive option for those seeking a lifeboat.

Further, Indonesian maritime development lags, in part, due to its strategic positioning. Littoral states along well-trafficked sea lanes incur high costs for maintaining and protecting these sea lanes often without receiving reciprocal economic benefits. High costs and low benefits are especially prevalent in Indonesia, which has not been able to develop effective port infrastructure to aid its coastal development. Terminals at Indonesia’s main port in Jakarta, for instance, can only move approximately 30 containers an hour at the high cost of USD $130, putting it well below most every other major Asian port in terms of its productivity/cost-efficiency ratio. Low efficiency makes Indonesia an unattractive place for shippers to do business and hinders Indonesians from getting imports at low prices.

Accentuating the geographic predisposition towards piracy and maritime armed robbery is state weakness. Indonesia is a state defined by ethnic and linguistic divisions which, until the turn of the century, was held together by the ruthlessly autocratic rule of Suharto. In recent years, however, the state has seen a definitive move towards democracy from authoritarianism with the help of military intervention. [3] The military has also proven effective in quelling separatist movements, like the Free Aceh movement.

However, while the military has been able to accomplish much towards state stability, it has not been able to effectively patrol its own waters for piracy. Indonesia covers an area of 93,000 square kilometers of water and has a coastline of 54,176 kilometers. Despite having the largest navy of its Strait neighbors (in addition to a coast guard and a marine police) and the new administration’s promises of increased defense spending, the military simply does not have the capability to patrol the entirety of its sovereign borders. The state currently spends less than 1 percent of its GDP on security, which is insufficient for developing the rule of law and a monopoly of violence within Indonesian territory, leaving it susceptible to crime like piracy. Additionally, naval spending might be poorly directed. Many of Indonesia’s current platforms are inappropriate for successfully navigating the geographic hazards of the country’s small islands and networks of mangroves.

Indonesia’s many islands both create hot spots for piracy and make it difficult for the Indonesian military to patrol.

Economic and security weaknesses lead to a unique brand of Indonesian maritime terrorism, dissimilar to other more notorious forms across the globe. Indonesian ‘pirates’ tend to commit relatively low-grade thefts in port at night, taking personal belongings or siphoning liquid gas cargo off tankers. The latter is especially rife as 50 percent of the world’s oil supplies flow through the Strait of Malacca. Regardless of the relative petty nature of these attacks, ship owners still incur high “war-risk” insurance premiums akin to those found in true conflict zones. High costs incurred on avoidable security risks sap economic resources that could otherwise be funneled to Indonesian economic development, but instead go to international insurers like Lloyds of London.

Indonesia has seen fluctuations in the levels of piracy it has experienced over the last decade. In the late ‘00s, Indonesia saw a 75 percent drop-off in piracy from earlier in the decade. However, that rate began rising again, jumping from 15 incidents in 2009 to 106 in 2013. [5] The reasoning behind the drop-off was largely due to an increased show of force in the Strait, brought about by increased international presence and cooperation. Indonesia has warmed to regional cooperation while continuing to reject western involvement in security matters, even more so recently under newly elected president, Joko Widodo. Widodo has welcomed the assistance of, among others, China, which has been eager to work with Indonesia as a way of strengthening the Maritime Silk Road, a part of China’s larger “string of pearls” maritime strategy. Such conversations with foreign powers indicate an increasing openness to foreign assistance.

Openness is critical for Indonesia, as they continue to lack the resources to effectively quell security issues within their sovereign borders. Instead, the state relies on other nations who also have stakes in the free passage of the Strait. Japan, China, and Singapore especially have much at stake due to the economic importance of the Strait as a trade route, and have financially backed the better part of Indonesia’s anti-piracy efforts. In addition to international patrols through the Strait, one of the most effective joint efforts is Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia (creating the somewhat tortured acronym ReCAAP), an international effort that shares maritime surveillance data collected by interested nations with the Strait states (Indonesia and Malaysia are notably absent from ReCAAP but receive the data).

However, ending Indonesian piracy and armed robbery still requires Indonesian capability and effort. Such action is difficult when the major impetuses of piracy in Indonesia only continue to increase. The Strait of Malacca saw a 32 percent increase in vessel traffic between the years 2000 and 2010. [6] On the heels of a continued global recession, increasing ease of access to targets for piracy will only encourage those seeking an illicit economic option in Indonesia.

While piracy itself is a harm to Indonesia, its effects are wide-reaching to all areas of society. The capital foreign powers feel the need to invest in Indonesian security could otherwise be invested in infrastructure or other forms of economic development were it not for piracy. Thus, piracy’s economic impact is not just the direct influence of stolen goods, but also the opportunity cost for other projects. Further, private businesses are less likely to invest in Indonesia due to the capital that they must spend to secure their interests. The high costs, in terms of human and financial risk, deter businesses from investing further in Indonesia, hindering its further economic development. Additionally, piracy makes the navigation of a strategic chokepoint dangerous, hindering the physical transportation of aid in a number of forms, including humanitarian, on its way to Indonesia.

However, one form of aid which the United States and other powers with an interest in utilizing the Strait should eagerly offer Indonesia is aid in their transportation and storage sector. Indonesia’s large population means that there are markets in that country worth exploring for major corporations, but they are hindered by the country’s poor port infrastructure. In 2012, the United States sent USD $202.8 million to Indonesia in foreign aid. Only $109,000 of that was concerned with transportation infrastructure. That number should increase significantly in order to assist the Indonesians in creating long-term economic development and maritime security in the Strait. As Indonesian ports improve, shipping companies will be more likely to take the risk to do business in Indonesia, improving Indonesia’s economy on a sustainable basis. As the economy improves, Indonesia will have more resources to direct towards its security problem, finally quashing its problems with piracy and armed robbery.

Indonesia, thanks largely to prior autocratic rule, has yet to develop a strong free economy. However, with the recent democratic regime, the opportunity to develop economically is present. Further, Indonesia has a trump card: its geographic position. Some of the world’s most powerful trade states have a high interest in using an Indonesian resource.

However, the solution to an Indonesian problem must come from Indonesia itself. For any investment in its maritime sector to be a truly effective method of stopping piracy, Indonesia will need to create an effective bureaucracy capable of good governance on both land and sea. President Widodo has continuously emphasized his interest in seeing Indonesia become the “maritime axis” of the world. In order to do, Indonesia’s public and private sectors will need to reign in corruption, allocate resources smartly, and work to find the best economic solutions for all citizens. Only then will piracy finally be extinct in the Strait of Malacca.

Christopher Papas is an undergraduate student at The College of William and Mary, the Division Leader of the United States Coast Guard Auxiliary University Programs, and Acting Director of Publications at CIMSEC. His views are his own. This article was adapted from a paper for Professor Rani Mullen’s Politics in the Developing World class. Follow Christopher on Twitter: @CPapGo.

[1] “Piracy and Armed Robbery Against Ships: Report for the Period 1 January-30 September 2014” (ICC International Maritime Bureau, 2014), 5.

[2] Takashi Ichioka, “Cooperation in the Straits of Malacca and Singapore,” in Navigating Straits: Challenges for International Law, ed. David D. Caron and Nilufer Oral (Leiden: Koninklijke Brill, 2014), 343.

[3] Edward Aspinall, “Indonesia: Redistributing Power,” in Politics in the Developing World, ed. Peter Burnell, Lise Rakner, Vicky Randall (Oxford: Oxford University Press, 2014), 320.

[4] Mary George, “Security, Piracy and Terrorism in the Straits of Malacca and Singapore,” in Navigating Straits: Challenges for International Law, ed. David D. Caron and Nilufer Oral (Leiden: Koninklijke Brill, 2014), 316.

[5] “Piracy and Armed Robbery Against Ships: Report for the Period 1 January-31 December 2013” (ICC International Maritime Bureau, 2014), 5.

[6] Ichioka, “Cooperation,” 343.

Asia-Pacific, Global Analysis, Territorial and Law of the Sea Disputes

China’s Nine-Dashed Line Faces Renewed Assault

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By Scott Cheney-Peters

China’s ambiguous claim to the South China Sea, approximately demarcated by a series of hash marks known as the “nine-dashed line,” faced objections from an expanding number of parties over the past two weeks. While a challenge from the United States came from an unsurprising source, actions by Indonesia and Vietnam were unexpected in their tone and timing.

8-e48b8c470eOn December 5th, the U.S. State Department released its analysis of the compatibility of China’s nine-dashed line with international law. The report attempted to set aside the issue of sovereignty and explore “several possible interpretations of the dashed-line claim and the extent to which those interpretations are consistent with the international law of the sea.” The analysis found that as a demarcation of claims to land features within the line and their conferred maritime territory, the least expansive interpretation, the claim is consistent with international law but reiterated that ultimate sovereignty is subject to resolution with the other claimants.

As a national boundary, the report went on, the line “would not have a proper legal basis under the law of the sea,” due to its unilateral nature and its inconsistent distance from land features that could confer maritime territory. Alternately, although many commentators have indicated China bases its claims on “historic” rights pre-dating the UN Convention on the Law of the Sea (UNCLOS) of 1982, the report argued that the history China points to does not fit the narrow “category of historic claims recognized” in UNCLOS under which historic rights may be conferred. Lastly, the report noted that as China has filed no formal claim supporting its nine-dashed line, the ambiguity over the exact nature and location of the line itself undermines under international law China’s argument that it possesses maritime rights to the circumscribed waters, concluding:

“For these reasons, unless China clarifies that the dashed-line claim reflects only a claim to islands within that line and any maritime zones that are generated from those land features in accordance with the international law of the sea, as reflected in the LOS Convention, its dashed-line claim does not accord with the international law of the sea.”

Although such analysis reflects prior U.S. policy positions, less expected were the pointed signals from Indonesia, which has built a reputation as a mediator among ASEAN states in dealing with China and striven to downplay the overlap by the nine-dashed line of its own claimed exclusive economic zone in the South China Sea from Natuna Island. On Tuesday at the think tank Center for Strategic and International Studies (CSIS) in Washington, senior Indonesian presidential advisor Luhut Binsar Panjaitan emphasized that the country was “very firm” that its “sovereignty cannot be negotiated,” while stressing the importance of dialogue to peacefully manage matters. Further, in response to a question from an audience member, Panjaitan stated (56:00 mark in the video below) that the development of gas fields offshore Natuna in cooperation with Chevron would “give a signal to China, ‘you cannot play a game here because of the presence of the U.S.’” Meanwhile Indonesian Maritime Affairs and Fisheries Minister Susi Pudjiastuti noted that after sinking Vietnamese vessels the Indonesian Navy said it had captured illegally fishing she was considering sinking 5 Thai and 22 Chinese vessels also caught.

As Prashanth Parameswaran notes at The Diplomat, Indonesia is playing a balancing act – seeking at the same time to protect its sovereign interests as it attempts to align new president Joko Widodo (Jokowi)’s “Maritime Axis”/“Maritime Fulcrum” initiative with Xi Jinping’s “Maritime Silk Road” and play a leading role in China’s Asian Infrastructure Investment Bank. To some observers, sinking the Thai and Chinese boats is now necessary to preserve Indonesia’s image of impartiality, while others believe such action may be redundant if China heeds the warning that such behavior will no longer be tolerated.

Vietnam too took surprise action over the nine-dashed line, in a move long-mooted but unexpected in its timing. Vietnam’s foreign ministry announced last week that it had filed papers with the Hague arbitral tribunal overseeing the case submitted by the Philippines, asking that its rights and interests be considered in the ruling. Vietnam supported the Philippines position arguing that China’s nine-dashed line is “without legal basis.” While a regional source in The South China Morning Post noted that the action was as much about protecting “Vietnamese interests vis-à-vis the Philippines as it is directed against China,” and Professor Carlyle Thayer described it as “a cheap way of getting into the back door without joining the Philippines’ case,” Thayer also told Bloomberg News that it “raises the stature of the case in the eyes of the arbitrational tribunal.”

China-Vietnam-RigIf the actions taken by the United States, Indonesia, and Vietnam were surprising, China’s reactions were not. On December 7th, China’s Ministry of Foreign Affairs released a white paper of its own on the Philippines’ arbitration case. The document states that China’s policy, as established in its 2006 statement on UNCLOS ratification, is to exclude maritime delimitation from compulsory arbitration. Additionally, the paper says that while the current arbitration is ostensibly about the compatibility of China’s nine-dashed line with international law, “the essence of the subject-matter” deals with a mater of maritime delimitation and territorial sovereignty. The paper goes on to say that until the matter of sovereignty of the land features in the South China Sea is conclusively settled it is impossible to determine the extent to which China’s claims exceed international law.

In effect, China is taking the position that only after it has conducted and conclude bilateral sovereignty negotiations will its nine-dashed line be open to critique. While the foreign ministry may be right that the Philippines is attempting to force the issue of territorial sovereignty, its argument that this prevents scrutiny of the nine-dashed line’s accordance with international law rings hollow.

At the end of the day, China has repeatedly stated, and its new policy paper affirms, that it will “neither accept nor participate in the arbitration” initiated by the Philippines. Chinese Foreign Ministry Spokesman Hong Lei likewise remarked of Vietnam’s filing with the tribunal that “China will never accept such a claim.” So it is prudent to ask what benefit will come of the legal maneuvers. Some, such as Richard Javad Heydarian, a political-science professor at De La Salle University, point to the economic harm already incurred by the Philippines in opportunity costs and the danger of having created a worse domestic and international environment for settling the disputes. Yet given the lengthening list of states willing to stake a legal position on the matter and the moral weight of a potential court ruling, China can claim and attempt to enforce what it wants, but it will be increasingly clear that it is doing so in contravention of international law.

Scott Cheney-Peters is a surface warfare officer in the U.S. Navy Reserve and the former editor of Surface Warfare magazine. He is the founder and president of the Center for International Maritime Security (CIMSEC), a graduate of Georgetown University and the U.S. Naval War College, and a member of the Truman National Security Project’s Defense Council.

History

Indonesia’s Seaward Shift: A Break from the Past

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Jokowi%20oathIn his inaugural speech as the President of Indonesia, Joko Widodo communicated a vision of prosperity for his country based on a tradition of maritime trade. Indonesia, he said, is to become a sea-going trading power once again. With a new Ministry of Maritime Affairs and a US $6 billion investment in maritime infrastructure, he’s putting his proverbial money where his mouth is. While this seems like an obvious path for archipelagic Indonesia to take, there are very important reasons why this signals a profound shift in the strategic thinking of the country from an internal threat perception to an external one. Although some analysts believe Jokowi’s pronouncement is code for abandonment of Indonesia’s non-alignment policy, it is likely his words had nothing to do with external actors and everything to do with growing confidence in Indonesia’s democracy to effectively address its historically troubled internal security.

Understanding this requires a look at the history and culture of Indonesia’s security services. Like many of its counterparts in neighboring states, the Indonesian security apparatus was formed, tested, blooded, and solidified in an environment of internal insurgency. For hundreds of years, Southeast Asian nations (with the exception of Thailand) were caught up in the ebb and flow of colonial domination. In a very short time following the Japanese invasion of the region in December 1941, these nations underwent a rapid decoupling from the colonial system. By 1959 all were newly independent and all except Thailand were on a fairly shaky basis due to the newness of their institutions. Worse, they all suffered from vicious Communist insurgencies formed, trained, and supported by the Allies to counter the Japanese. In some cases, returning colonial powers (French, Dutch, and British) found themselves fighting the very the agents they had trained just a few years earlier. The chickens had come home to roost in a very real and violent way.

The Communists had two weakness: they were not a single, monolithic insurgency but a collection of disconnected national movements (Malayan, Thai, Indonesian, Filipino) vulnerable to defeat in detail, and their core membership was composed primarily of culturally distinct ethnic Chinese minorities. Their ability to blend into the local populations was limited, forcing the Communists to operate in remote, politically marginal areas. Despite this, they posed a very real threat to the stability of the young governments in the five nations that would eventually form the Association of Southeast Asian Nations (ASEAN). By 1967, these nations had had enough and decided they needed a political construct that would enable them to address the problem. The solution was the principle of non-interference enshrined in the founding declaration of ASEAN. This principle allowed member states to define their insurgencies as purely internal problems and to deal with them without fear of interference by other ASEAN member states. In its implementation over the last forty-seven years, the principle of non-interference has been used at times as a cover for the suppression of internal populations through imposition of emergency security measures such as restrictions on freedoms of the press and assembly; common factors in many ASEAN countries. Of course, the best tool for implementing these restrictions is the police. As a result, in many ASEAN countries the police, not the Army, have primacy for both internal and external security. But Indonesia went a different direction, relying more on its military special operations forces (Kopassus and others) than on its police.

Created by the Japanese to fight Dutch-trained Indonesian paramilitary formations (and ultimately the Dutch themselves), the predecessors of the Indonesian Army (TNI) and national intelligence service (BIN) adopted a heavy counter-insurgency focus during their early operations in the Second World War. With the accession of their leaders, Sukarno and Zulkifli Lubis, to political and bureaucratic power, TNI and BIN’s perception of threat from within dominated Indonesia’s strategic landscape until the end of the 20th Century. As TNI’s monopoly on political power quickly eroded after the fall of Suharto in 1998, the emphasis began to shift toward the police. A U.S. legislative prohibition on direct military engagement with individuals accused of human rights violations accelerated the situation. The prohibition disproportionately affected Kopassus after accusations that many of its leaders committed war crimes during the invasion of East Timor in 1975. Decades later, the U.S. failure to engage Kopassus remained problematic for the United States because TNI continued to block access to other Indonesian units, insisting that Jakarta, not the U.S. Congress, would decide which Indonesian formations received priority for mil-mil cooperation. The impasse left the door open for the U.S. State Department to become the lead U.S. agency for security assistance to Indonesia. Through its Anti-Terrorism Agency (ATA), the State Department drove the formation and training of the now famous police counterterrorism unit, Densus 88,[1] known for its spectacular successes against a number of the country’s most wanted international terrorists. By 2007, with hotspots in Timor and Irian Jaya temporarily quiet, Indonesia’s police seemed to be firmly in control of internal security, allowing the country’s military and political leadership to begin thinking outwardly.

It is in this context that Jokowi’s pronouncement makes sense. Navies do not have great utility against insurgencies and it would not be feasible or advisable to emphasize naval power while under threat from within. While some happily interpret this shift to be aimed squarely at China, whose territorial claims in the South China Sea affect Indonesia’s energy rich Natuna Island, this is probably wishful thinking. China’s brushes with Natuna are a very recent development in what is a much older strategic context. Therefore we should not view such a shift as a bold break from strategic concepts of the past, rather we should take it as a reflection of Indonesia’s changing security situation going all the way back to the Japanese invasion in 1941. While it’s probably inaccurate to portray this as evidence of Jokowi’s greatness and vision, we can take heart that a shift to the sea is evidence that a mature, stable Indonesia has indeed arrived and is here to stay.

Lino Miani is a US Army Special Forces officer, author of The Sulu Arms Market, and CEO of Navisio Global LLC.  Views expressed in this article are definitely not the views of the US Government, the U.S. Army, or the Special Forces Regiment.

[1] The name Detacmen Khusus 88, or Densus 88 for short, is reportedly the result of a misinterpretation of the English acronym for Antiterrorism Agency (ATA) by a senior Indonesian police official.

Podcast, Sea Control: Asia-Pacific (ASPI)

Sea Control 53 – Indonesian Security Policy

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seacontrol-birthday

Happy Birthday CIMSEC! In celebration of CIMSEC’s first birthday, Sea Control Asia Pacific is bringing you a special podcast with an all-star cast. On the sidelines of the Conference of Australian and Indonesian Youth, Natalie Sambhi, of the Australian Strategic Policy Institute, hosts an in-depth discussion with Lieutenant General (rtd) Agus Widjojo (Indonesian Army), Brigadier General (rtd) Gary Hogan (Australian Army) and Jim Della-Giacoma (former head of International Crisis Group operations in Southeast Asia) on Indonesia’s defence and security, and maritime security in the region.

DOWNLOAD: Indonesian Security Policy

The podcast covers Indonesia’s security priorities, strategic communications and defence diplomacy, Asia Pacific cooperation on the South China Sea, naval modernisation, and US–Indonesia relations.

For some background of the events of 1965 mentioned by the guests, see here.