Center for Energy Sustainability and Economics


Last update05:02:39 AM

Indonesia Working to Soothe South China Sea Tensions


WASHINGTON — In all the anger over rival claims to the South China Sea, Indonesia has emerged as a voice of calm, working to mediate a dispute involving China, Vietnam, the Philippines, Taiwan, and Malaysia.

Chinese patrols in waters that Vietnam and the Philippines also claim have heightened tensions in the mineral-rich South China Sea.

Vietnamese protestors condemn what they call a Chinese invasion over Beijing's decision to take bids for oil blocks off Vietnam's coast. Hanoi has passed a law claiming sovereignty over disputed islands.

The division is so deep it blocked a unified statement from the Association of Southeast Asian Nations for the first time in the group's history.

"The relationships between China and ASEAN countries are multidimensional. They should not be spoiled by the South China Sea issue," said ASEAN spokesman Danny Lee.

Into these troubled waters comes Indonesian Foreign Minister Marty Natalegawa, working to keep ASEAN from splitting.

"ASEAN continues to remain to be united, to be cohesive on all issues of common concern, not least, and especially on the issue of South China Sea," Natalegawa said.

From Phnom Penh to Manila to Bangkok to Hanoi, Natalegwa is pushing a regional framework to resolve the rival maritime claims.

"We do actually need a Code of Conduct for the South China Sea, some kind of rule of the road type of regime so that potential for conflicts in the region can be managed and, even more, betters the potential for conflict can (to) be resolved," Natalegawa said.

As Southeast Asia's biggest country, Indonesia's neutrality is helping cool some tempers.

"They really are sort of at the fulcrum of this, trying to remain in the center, wherever the center may be. I imagine that will continue going forward. Their status has really risen as a result of their diplomacy," said Justin Logan, who directs foreign policy studies at the U.S. Cato Institute.

Logan says Indonesian mediation is especially important as China opens a military garrison on an island Vietnam and Taiwan claim.

"And I do think that they (Indonesians) have remained sort of the anchor in the center as other countries have more or less drifted away from that center," Logan said.

Senior U.S. officials say Indonesia has been instrumental not only in keeping open prospects for talks over the South China Sea but also in encouraging Burma's military to enact political and economic reforms that helped to bring opposition leader Aung San Suu Kyi to parliament.


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Following the ASEAN-China landmark deal on the Guidelines on the Implementation of the Declaration on the Conduct of Parties in the South China Sea, cooperation looms. In a leveling playing field and increasing government stakes in oil and gas production, hardball tactics are increasingly at play. As the search for new E&P ventures continues boundary disputes between E&P concession blocks and across borders are becoming more common.

Operation in contested regions involves high risk and a delicate balance of legal, technical and commercial/financial expertise to discuss this kind of questions: • How do you operate in different fiscal and regulatory regimes?

• How do you achieve delimitation to start new activities in disputed regions?

• What do you do when mediation fails – all the way to the ICJ, is this even effective?


From assessing intricacies of border disputes, through to maritime delimitation technicalities, to successful resolution practices,

International Boundary Disputes and Unitization in E&P 2012 (17-18 Oct 2012, Vietnam) will be the leading forum for in-depth analysis of this highly-charged business critical issue.

Uniting real-life field experience from across the Asia Pacific region, with the most successful global practices in border disputes, the event will showcase the latest strategies and case studies to allow operators to cost-effectively predict, manage and operate within contested regions.

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