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With Indonesian and Malaysian warships and fighter aircraft now deployed near the contested waters, Prime Minister Abdullah Ahmad Badawi of Malaysia telephoned President Susilo Bambang Yudhoyono of Indonesia Monday in an attempt to prevent the military posturing from getting out of control.
Since the crisis began in mid-February, politicians and military officers on both sides have released increasingly aggressive statements about guarding territorial integrity. Indonesia this week sent additional vessels to strengthen a naval flotilla in the area, bringing the total number of its navy ships to seven. It has also deployed four F-16 jets, its most modern fighter aircraft.
Abdullah will send Foreign Minister Syed Hamid Albar to Jakarta on Wednesday to meet with his Indonesian counterpart, Hassan Wirajuda, in hopes of finding a diplomatic solution to one of the most persistent conflicts between the two countries.
The dispute centers on overlapping claims to waters surrounding the Sipadan and Ligitan Islands, off the east coast of Borneo Island. After agreeing to international arbitration, Indonesia was bitterly disappointed when the International Court of Justice ruled in 2002 that the islands belonged to Malaysia.
Tensions flared again on Feb. 16, when the state-owned oil company of Malaysia, Petronas, awarded production-sharing contracts to two units of the Anglo-Dutch giant, Royal Dutch/Shell Group, and to the local oil company, Petronas Carigali. The contracts were for deepwater oil and gas blocks.
Indonesia says that Malaysian sovereignty extends only about 19 kilometers, or 12 miles, from the two contested islands, and the blocks awarded by Petronas are outside this zone.
In November, Indonesia awarded a contract to the U.S. company, Unocal.
Unocal, a U.S. oil-and-gas company, was given a production-sharing contract for exploration and oil and gas drilling at a block in the disputed waters, prompting Kuala Lumpur to protest to Jakarta.
Spokesmen for Shell and Unocal declined to comment Monday. "We are saying it's a government-to-government matter," a Shell official said in London.
The show of military strength around the islands is unusual between two fellow members of the Association of South East Asian Nations, underscoring the sensitivity of the territorial issue. Both nations are signatories to the Asean treaty of amity and cooperation, and both have Muslim and ethic Malay majorities.
As tensions mounted in the past three weeks, Malaysia warned Indonesia that one of its navy ships had trespassed about 13 kilometers inside Malaysian territorial waters.
Indonesian military officers warned they would firmly resist any loss of territory. Amid the escalating rhetoric and military deployments, Abdullah called Yudhoyono yesterday for what the Indonesian president later described as "constructive" talks on how to solve the standoff.
"He said he will send his foreign minister to Jakarta. I welcome his proposal," Yudhoyono said while on a visit to East Kalimantan Province in Indonesia. "Our hope is that this problem can be solved through diplomatic channels with a fair solution in respect to Indonesia's sovereign and territorial rights."
After his call to Yudhoyono, Abdullah said he hoped the dispute could be managed in a "cordial manner."
Abdullah continued that, "to prevent any undesirable incidents which may create tension in the relationship between Indonesia and Malaysia, both of us agreed for the matter to be discussed at the diplomatic level."
Relations between Jakarta and Kuala Lumpur have also been tested recently over a Malaysian crackdown intended to expel illegal workers, many of whom are poor Indonesian laborers seeking better salaries and job opportunities. This issue is also likely to be on the table at the foreign ministers' talks.
Finding a way through the territorial dispute might require more than goodwill and bilateral diplomacy. The two parties are not expecting quick progress. They may once again need an international opinion to resolve their differences, a step Indonesia could be reluctant to take after losing the 2002 legal ruling.
Neither country is likely to back down readily, considering the potentially large economic benefits at stake. The waters off the east coast of Borneo have been a major source of liquefied natural gas for Indonesia, pumped from deepwater blocks managed by Unocal.
Some analysts have suggested that one solution might be the creation of a joint economic zone. This way, the countries could share royalties while maintaining strong convictions over the validity of their competing claims.
Despite Kuala Lumpur's calls for a peaceful solution, two warships of the Royal Malaysian Navy have also been deployed to patrol the waters around Sipadan and Ligitan.
Although the military deployments are widely seen as no more than posturing, officials in Jakarta and Kuala Lumpur are concerned about the possibility that a miscalculation by commanders in the area could produce an incident that would make diplomacy much harder.
