The International Court of Justice and the territorial dispute between Indonesia and Malaysia in the Sulawesi Sea.

• Author: Butcher, John G.

In the early 1990s, a long-running and bitter dispute over the ownership of two small islands in the Sulawesi Sea, and rights to the waters and seabed near those islands, was placing ever greater strain on the relationship between Indonesia and Malaysia. In October 1996, just when it appeared that there was no way of resolving the dispute, the governments of Malaysia and Indonesia suddenly agreed to refer the question of ownership of the islands to the International Court of Justice (ICJ). By this time the ICJ had ruled on many disputed sovereignty cases since its establishment under the United Nations (UN) Charter in 1945. The remarkable aspect of this case was that the ICJ was very much a new actor as far as maritime security governance in Southeast Asia was concerned. (1) In fact, the only time Southeast Asian countries had submitted a dispute of any kind to the ICJ was in 1959, when Thailand and Cambodia referred their competing claims to ownership of the Temple of Preah Vihear.

As a general rule, states are reluctant to hand over the settlement of disputes to an outside body, especially when--as is the case when states refer disputes to the ICJ--they must agree to be bound by the ruling of that body no matter what the outcome. Southeast Asian states, however, have been particularly protective of their sovereignty, especially when resolving territorial disputes. All Southeast Asian states experienced colonial rule or interference, all had their borders shaped to some extent--entirely in the case of Malaysia and Indonesia--by the colonizing powers, and two among them--Indonesia and Vietnam--underwent wars of independence. The ICJ's decision in the Preah Vihear case had done little to diminish the reluctance of states in this region to refer their disputes to an outside body: when the court ruled in favour of Cambodia in 1962, the Thai government's first reaction was to declare that the "temple would be defended to the last drop of blood". (2)

What, then, made the Indonesian and Malaysian governments refer the question of ownership of the two islands to the ICJ? Did the ICJ's ruling resolve the dispute between the two countries? Have the two governments become, as a result of their experience in this case, more willing to have their disputes settled by the ICJ or by any other outside body? Before trying to answer these questions we must examine how the dispute arose in the first place.

The Origins of the Dispute

Sipadan and Ligitan, the two islands at the centre of the dispute, are mere specks in the Sulawesi Sea. Sitting atop a steep extinct volcanic seamount and occupying 12 hectares, (3) Sipadan lies about 14 miles south of "mainland" Sabah and 42 miles east of the island of Sebatik, which is divided between Malaysia and Indonesia by the 4[degrees] 10' North parallel as agreed by the United Kingdom and the Netherlands in a treaty signed in 1891. Ligitan, which is even smaller, lies 12 miles to the east of Sipadan and is part of an extensive system of coral reefs. At the time the dispute arose neither island was inhabited. Sipadan was regularly visited by collectors of turtle eggs but otherwise neither island was valued for its natural resources. However, islands can have an importance that transcends their intrinsic value. Despite their size they can be seen as worth fighting for when they are regarded as an indivisible part of a state's territory. When, as is often the case, they are located on the fringes of a state's land possessions, they can also serve as the starting point for delimiting the state's maritime boundaries. It was because this second feature applied to both islands that the dispute between Indonesia and Malaysia first arose.

In 1969 the Malaysian and Indonesian governments began negotiations on the continental shelf boundary between their two countries. There was a great deal to negotiate, both because the two countries shared extensive continental shelves in the Straits of Malacca, South China and the Sulawesi Sea, and because the 1958 UN Convention on the Continental Shelf, which both countries had signed and ratified, gave coastal states "sovereign rights" over their continental shelves "for the purpose of exploring it and exploiting its natural resources". (4) For both Malaysia and Indonesia the natural resources of most interest were oil and gas, deposits of which were known to exist in at least some parts of the continental shelves they shared. The convention gave the negotiating teams representing the two governments only limited guidance on how to delimit their continental shelf boundaries. Article 6 simply stipulated that "Where the same continental shelf is adjacent to the territories of two adjacent States, the boundary of the continental shelf shall be determined by agreement between them." As it happened, the negotiating teams were able to reach agreement over boundaries in the Straits of Malacca and the South China Sea very quickly. This was largely because the Indonesian government was prepared to accommodate Malaysian interests in the hope of gaining Malaysia's support in its campaign to gain international recognition of its claim to sovereignty over the waters between the islands making up Indonesia. The negotiations over the boundary in the Sulawesi Sea, however, soon reached an impasse over the ownership of Sipadan and Ligitan. According to Hasjim Djalal, a senior official in the Indonesian department of foreign affairs and an authority on the law of the sea who took part in the negotiations, the Indonesians wanted to use a Malaysian map that did not show the two islands as being part of Malaysia, while the Malaysians wanted to use an Indonesian map that did not show them to be part of Indonesia. (5)

A great deal depended on which nation owned the islands. At the very least the state owning the islands would be able to encircle each of them with a territorial sea, which both governments at this point regarded as being 12 nautical miles wide. But this was a fairly minor issue. What really mattered was the boundary of the continental shelf. According to article 1(b) of the Continental Shelf Convention, an island was entitled to continental shelves in the same way that other land areas were. (6) Although article 6 left the negotiators free to give relatively little weight to Sipadan and Ligitan in drawing a boundary or to disregard them altogether, neither side was prepared to diminish the importance of the islands since ownership of the two specks of land would place the state owning them in a much stronger position in negotiating the boundary. At stake was not only national pride but also the exclusive right to extract whatever oil and gas that might be found under the seabed at some time in the future. The Indonesian government had in fact already given a Japanese oil company a permit to explore part of the area in question. (7)

The 1969 negotiations were suspended when the Indonesians said that they were not authorized to negotiate on the sovereignty of islands. According to Indonesian accounts, the two parties agreed that their governments would leave the question of the ownership of the islands to be settled later and would in the meantime "maintain the status quo, specifically, that the issue was not yet settled". (8) According to the Malaysian version, there was no such understanding, since as far as the Malaysian negotiators were concerned the islands belonged to Malaysia. (9) In any case, the two governments apparently did not hold any discussions during the next ten years to try to resolve the impasse.

The dispute first gained public attention in December 1979 when the Malaysian government published a map, the Peta Baru Menujukkan Sempadan Perairan dan Pelantar Benua Malaysia (usually translated as New Map Showing the Territorial Waters and Continental Shelf Boundaries of Malaysia), often referred to as the Peta Baru (New Map). That map showed Sipadan and Ligitan to be part of Malaysia. It also delimited Malaysia's continental shelf boundary in this area. It did this by, on the one hand, giving full weight to these islands, regarding them as if they were part of the "mainland" of Sabah, and on the other, it appears, simultaneously ignoring certain islets belonging to Indonesia. (10) As a result, the boundary followed a line jutting south-easterly from the eastern point of the land border dividing Sebatik. A few weeks later, in February 1980, the Indonesian government "formally objected to the new map". (11) Discussions between President Soeharto and Prime Minister Hussein Onn the following month failed to resolve the question. (12) In October 1982 the Malaysian foreign minister, Ghazali Shafie, "discussed the border problem of the two islands" with President Soeharto during a visit to Jakarta, but that conversation merely reaffirmed a commitment by both governments to resolve the dispute by negotiations. (13)

In December 1982 another dimension was added to the dispute with the signing of the UN Convention on the Law of the Sea (UNCLOS). Under UNCLOS a coastal state exercises "sovereign rights" over the resources in the water column as well as in and under the seabed in an area known as the exclusive economic zone (EEZ) extending up to 200 nautical miles out from the same baselines used to define its territorial sea. In keeping with UNCLOS, Indonesia and Malaysia enacted legislation establishing their EEZs in 1983 and 1984 respectively. As a result, the dispute now concerned not only the oil and gas resources of the disputed area but also the fishery stocks in that area. Another consequence was that any resolution of the dispute would now require the two states to agree on a boundary between their continental shelves and EEZs in this area or, conceivably, separate boundaries for the two types of jurisdiction. (14) In the short term this was not a problem, mainly because the Indonesian government did not announce the precise limits of its EEZ in...