The Ambalat corridor dispute, the contested maritime border between Malaysia and Indonesia covering waters thought to be rich in undersea resources, might be headed towards resolution.
The stand-off dates from the colonial era, where the region just east of Borneo in the Celebes Sea was divided by the British and Dutch without clearly stating the owner of several small islands offshore. In 1979, the Malaysian government released a map of Malaysian maritime boundaries showing control of the area, inciting outrage in Indonesia. Eventually, both countries agreed in 1998 to submit the dispute to the International Court of Justice, which ruled in 2002 that Malaysia held ownership of the Sipadan and Ligitan Islands. However, the ruling did not resolve the demarcation of the maritime boundary, causing more tension.
During a visit to Indonesia in June this year, Malaysian Prime Minister Anwar Ibrahim announced alongside Indonesian President Prabowo Subianto an agreement on a joint collaboration in the area, marking a turning point. Both governments are keen to shift their focus towards a pragmatic model to unlock the abundant energy resources potential through cooperation rather than impractical disputes.
The Ambalat block, which Malaysians refer to as the ND6 and ND7 blocks, is estimated to contain enormous hydrocarbon reserves. Given the global demand for energy, leaving these resources untapped would be a lost opportunity.
But a successful plan must be more than a glorified press release. Several structural imperatives must be addressed upfront.
First, the agreement should state a clear demarcation of a provisional joint development and should not prematurely implement a cemented maritime boundary. A Joint Development Framework should include appropriate legal guardrails, such as a binding clause that implicitly states both parties retain the right to press delimitation claims, and neither party should be implied to accept the other side’s arguments. These safeguards mimic Malaysia’s other joint development with Thailand on their disputes over the boundary for the continental shelf in the Gulf of Thailand.
Second, the governance should be technocratic and transparent in the joint development. Appointments must be merit-based. Both nations should develop a Joint Development Authority, including committees for safety, environmental protections, and security regulation. To encourage community support, civil society or academia should be involved. Important documents and data from the development should also be published to help prevent corruption. Coastal districts near the Ambalat block should receive a substantial share of revenue from the development, rather than see it simply divided between the central governments. This will further help ensure local support and prevent a political backlash in the region.
Lastly, there’s also the need to build trust and cooperation. Actions such as joint maritime patrols and coordinated surveillance sharing will be important. They will also help reduce the chances of Illegal, Unreported, and Unregulated fishing or other criminal activities. These coordinated security measure will gradually normalise the presence of both sides in the area. This type of security cooperation was evident in joint efforts made by Indonesia, Malaysia, and Singapore to protect the crucial trade route in the Strait of Malacca from transnational organised crime, through the Malacca Strait Patrol (MSP).
Even with the positive momentum, challenges to any Ambalat agreement should be expected. Sabah politicians in Malaysia criticised Anwar for not involving the state in the early talks. Political sensitivites arise due to varied interpretations of the Malaysian Agreement 1963 and state rights and jurisdiction for offshore resources.
On the Indonesian side, the public reception to news of the negotiation has been muted. Nationalist tensions that flared at the time of the Sipadan and Ligitan ruling have not reemerged. Some of this may be the product of Prabowo’s approach, adamant about improving Indonesia’s international cooperation.
This cooperative shift on maritime matters between the two nations reflects UNCLOS Article 83(3), which allows the joint management of maritime areas beyond national jurisdiction. Such a development, if executed well, holds the potential to become a regional model for how Southeast Asian nations can resolve overlapping maritime claims through cooperation rather than confrontation.
