A high-angle satellite photograph capturing the narrow Strait of Malacca, the vital sea passage between the lush rainforests of Sumatra and the Malay Peninsula (Getty Images)

A toll on Malacca Strait puts Indonesia’s own legal foundations at risk

A levy on Malacca transit would be illegal under UNCLOS – the same treaty that confirmed Indonesia’s archipelagic statehood.

Dita Liliansa

23 April 20264 min read

Indonesia’s Finance Minister Purbaya Yudhi Sadewa, speaking at a symposium in Jakarta on Wednesday, made an offhand remark about imposing a levy on vessels transiting the Malacca Strait, nodding to Iran’s plans to charge vessels through the Strait of Hormuz. “If we split it three ways between Indonesia, Malaysia and Singapore, that could be quite something, right?” he said.

Purbaya’s comment came against a charged backdrop. Last week, the US warship USS Miguel Keith had passed through the Malacca Strait and a few days later, all three littoral states jointly “reaffirmed their commitment to keeping the straits of Malacca and Singapore open and safe, in accordance with international law.” Earlier in the month, Singapore’s Foreign Minister Vivian Balakrishnan had said that transit passage was “not a privilege to be granted by the bordering state” and “not a toll to be paid”. Balakrishnan later reiterated that Singapore would not participate in any attempt to impose tolls, while Malaysia’s Transport Minister Loke Siew Fook separately reaffirmed his country’s commitment to freedom of navigation.

Purbaya quickly walked back his musing. “If only it could be like that, but that’s not the case.”

The Strait is not a toll road

There is a legal distinction that tends to get lost in such debates. Tolls are permissible on constructed canals – the Panama Canal, the Suez Canal – built as commercial infrastructure within a single state’s territory. Natural straits are different. The Straits of Malacca and Singapore (SOMS) form a continuous waterway connecting the exclusive economic zone (EEZ) at the northern entrance of the Malacca Strait to the EEZ at the eastern end of the Singapore Strait. This qualifies them as a strait to be used for international navigation under the United Nations Convention on the Law of the Sea (UNCLOS). This classification triggers the right of “transit passage”, which is a broader passage right than the “innocent passage” regime that some commentators have mistakenly applied to this strait.

A levy on Malacca Strait transit would not be a toll in the Panama Canal sense, but an act of Indonesia sawing at the very legal branch it sits on.

As bordering states, Indonesia, Malaysia and Singapore are legally obliged not to “hamper transit passage,” and there “shall be no suspension of transit passage” under any circumstances. A toll would have the practical effect of hampering that right and UNCLOS expressly prohibits charges on foreign ships simply for passing through. These are not soft norms but binding legal obligations, with non-compliance subject to compulsory dispute settlement mechanism.

The three littoral states have long honoured them in practice, managing the straits as a single strait through the Tripartite Technical Experts Group (TTEG) since 1971 and the SOMS Cooperation Mechanism. A unilateral levy would also undermine exactly this cooperative framework, which took decades to build.

The deeper problem with Indonesia flirting with UNCLOS violations is what UNCLOS has actually delivered to Indonesia. Indonesia’s territory is itself a product of the archipelagic state concept enshrined in UNCLOS. Under that regime, Indonesia gained sovereignty over all waters enclosed within its archipelagic baselines, including the natural resources within them, and its 200-nautical-mile EEZ and continental shelf are also measured from those same baselines. In concrete terms, UNCLOS gave Indonesia more than 3 million km2 of archipelagic and internal waters, nearly 300,000 km2 of territorial sea, a further 3 million km2 of EEZ, and an extended continental shelf. In other words, UNCLOS transformed a collection of islands separated by open international waters into the unified archipelagic state that Indonesia is today.

A country that has benefited so enormously from UNCLOS should be its most steadfast defender. Any derogation of UNCLOS, however casually floated, ought to be treated as a threat to Indonesia’s own security and territorial integrity. A levy on Malacca Strait transit would not be a toll in the Panama Canal sense, but an act of Indonesia sawing at the very legal branch it sits on.

Singapore harbour (Planet One Images/UCG/Universal Images Group via Getty Images)

Iran is not a model worth emulating

Iran’s toll proposal did not emerge from a peacetime revenue strategy. It arose amid an active international armed conflict between the US, Israel and Iran. For Indonesia to look at that scenario and see a revenue opportunity is fundamentally flawed. Following Iran’s wartime example would introduce the instability that makes the Malacca Strait economically valuable. Even setting aside legality, the proposal is unworkable without Malaysia and Singapore, and both have already said no.

The rules-based international order is not a natural condition of the world, but a political achievement constructed through decades of negotiation, compromise, and mutual concession. UNCLOS itself took nine years of negotiations, with states agreeing to constrain their own sovereign impulses because they recognised that the resulting framework served their long-term interests better than the alternative: a world governed by power alone, where the strong do what they will and the weak suffer what they must.

That order is under more strain today than at any point since the post-war institutions were built. When states begin selectively defecting from rules they collectively agreed to, the edifice erodes quietly, precedent by precedent, until the rules no longer rule. This is existential for smaller and middle-power states that cannot fall back on military or economic coercion when rules fail them. What protection do they have, if not the rule of law?

About the author

Dita Liliansa

Dita Liliansa is a Research Fellow at the Ocean Law and Policy Programme of the Centre for International Law (CIL), National University of Singapore (NUS).

Topics

Indonesia Malaysia Singapore