Thursday, June 2, 2016

Southeast Asia's Treacherous Waters Analysis JUNE 2, 2016 . Stratfor.

Southeast Asia's Treacherous Waters

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  • Malaysia, Indonesia and the Philippines will endeavor to cooperate on security in the Celebes and Sulu seas, prevent intervention by outside nation, and forge a trilateral maritime security agreement.
  • This collaboration could expand to focus on territorial disputes in the South China Sea or to adjust to the regional activities of outside powers.
  • However, weak governance and security gaps in land areas around the seas shared by these three countries will undermine progress on maritime security.


Ship raiding was once a common practice across much of archipelagic Southeast Asia, a region that encompasses modern-day Indonesia, Malaysia, and the Philippines, as well as several smaller states and outlying islands. Sanctioned by local rulers as a way to exact taxes on maritime trade, this raiding became illegitimate only when it was outlawed by the increasingly powerful Western powers in the late 19th century. Today, however, many of the region's states lack the ability to adequately govern their sprawling territorial seas. The massive flow of trade through these waters has allowed such practices to persist, providing funds for militant and organized crime groups alike, though the extent of piracy is limited compared to antiquity. One region with particularly high threats to maritime security is what is referred to as the tri-border area — the Celebes and Sulu seas and the surrounding coastal areas. This area has been particularly hard to govern in part because it lies at the confluence of territories controlled by Malaysia, Indonesia and the Philippines.
The Strait of Malacca — which is divided among Malaysia, Indonesia and Singapore — is the center of gravity for regional trade, providing passage from the Indian Ocean into the Pacific through the archipelago. The strait's boundaries are secured by treaty, and cooperation among the nations concerned is longstanding. But Malacca is not the only point of passage for vessels; it is simply the most important. Other states in and outside the region have paid less attention to security conditions in the tri-border area and its straits. This has allowed piracy, kidnappings, terrorist attacks and criminal activities to persist at high levels, disrupting fishing and trade flows. Malaysia, the Philippines and Indonesia have not managed to advance a multilateral maritime security cooperation framework. However, in light of recent maritime incidents, the tri-border states are now seeking to boost their collaboration. They hope to replicate the success of agreements that have helped stabilize the Strait of Malacca, where piracy has dropped significantly because of enhanced coordinated patrols, information sharing and incident management.
If successful, expanded maritime security cooperation between Malaysia, Indonesia, and the Philippines could expand into collaboration on other issues, including the contentious territorial disputes in the South China Sea and the regional activities of outside powers. But the low levels of state control over these remote areas, weak coast guard capabilities of each of the littoral states, and sovereignty concerns will complicate effective multilateral maritime security efforts.

Protecting Trade

Securing the tri-border area is strategically important to the surrounding states, each of which relies on open and secure shipping lanes. Additionally, this region possesses considerable undersea resources and rich fisheries — a vital commodity in the increasingly overfished region. The insecurity of the tri-border area is an enduring check on the economic plans of Malaysia and Indonesia, in particular, and goals of leveraging their strategic locations for global trade.
The amount of global trade passing through the tri-border area is significantly lower than the amount passing through the Strait of Malacca, but it is nonetheless substantial. In 2015, for example, more than 100,000 ships and 18 million passengers passed through the Celebes and Sulu seas, with a cargo value of around $40 billion. Trade among the tri-border states is also growing. The Philippines, for instance, depends on Indonesia for 70 percent of its coal imports, valued at approximately $800 million.
But ensuring security requires extending control over some of the most remote regions in all three states. Maritime threats have undermined the safety of fishing activities and shipping lanes in the region's numerous narrow passageways, particularly the Makassar, Surigao, San Bernardino, Balabac, Lombok and Mindoro straits. Some of these corridors are used by tankers as alternative routes to the narrower and shallower Strait of Malacca, and they are vulnerable to criminal groups targeting fishing trawlers, freighters, tankers and bulk carriers.

Troubled Waters

While the number of armed robberies against ships in Southeast Asia has declined over the past decade, the threat remains significant. Between 1995 and 2013, an estimated 41 percent of reported attacks occurred in the region. This stands in contrast to the West Indian Ocean and the West African Coast, which accounted for 28 percent and 18 percent of attacks, respectively. In 2015, the tri-border area had 11 reported incidents. Three attacks, allegedly by the Philippine militant group Abu Sayyaf, targeted Indonesian and Malaysian vessels in March and April alone and involved crew kidnappings. These attacks had an outsized impact: the suspension of coal shipments to the Philippines by at least two Indonesian ports, theft of coal, paid ransoms and diverted routes.
If unaddressed, high-profile incidents like these could further degrade security in an already largely-ungoverned space where groups have taken advantage of weak government control to operate along unprotected coastlines and shipping lanes. Growing maritime security cooperation between Malaysia, Indonesia, and the Philippines could help tackle the issue. Still, without a strong military presence in land areas of the region, joint and individual state maritime security efforts to address threats will be largely ineffective.
Illicit activity thrives in the rugged topographies of the Indonesian island of Sulawesi, Mindanao in the Philippines, and portions of Borneo shared by Indonesia and Malaysia. Rugged terrain has allowed militants and organized crime groups alike to operate freely and engage in piracy, kidnappings and the smuggling of weapons and drugs. The areas are also the operations bases for Southeast Asia's major rebel groups. For example, Abu Sayyaf's few hundred militants operate in the Sulu archipelago in the southern Philippines and Sabah, Malaysia. Mainly involved in piracy and kidnappings for revenue, the fragmented group is remarkably agile and has pledged allegiance to the Islamic State. Moro rebels in the Philippines, meanwhile, exploit areas in central and western parts of Mindanao, as well as in the Sulu archipelago. The region's strongest group, the Moro Islamic Liberation Front, largely avoids piracy and has been cooperating with the Philippine government against other militant groups in the region, but it still reportedly smuggles weapons through the tri-border area and has ties to local gangs involved in kidnappings.
Meanwhile, Jemaah Islamiyah, responsible for 2002 Bali bombings, operates on the Indonesian island of Sulawesi and occasionally seeks sanctuary in the southern Philippines. The group has broken into smaller factions in the wake of a crackdown by Indonesian security forces, spreading to West Nusa Tenggara and Java. Tanzim al Qaeda Malaysia and Darul Islam Sabah dwell in Malaysia, but they are not as active because of the country's relatively robust counterterrorism capabilities. Even fishermen engage in piracy against ships, the trend increasing as fishing stocks along the coasts of the tri-border area become depleted.

Barriers to Cooperation

Given the scope of these security challenges, Malaysia, Indonesia and the Philippines have several anti-piracy, counterterrorism and coordinated patrols agreements to defend the tri-border area's trade flows. They have also expanded their naval and coast guard forces and held maritime exercises. The growing involvement of external powers in the South China Sea, where Malaysia and the Philippines have overlapping claims with China, Vietnam and Taiwan, has additionally encouraged bilateral and trilateral cooperation.
Yet the stipulations of the cooperation deals also allow Malaysia, Indonesia, and the Philippines to avoid fully implementing trilateral coordination. In the Strait of Malacca, Singapore, Malaysia, Indonesia, and Thailand have managed to coordinate aerial and naval patrols, intelligence sharing and incident management to safeguard the trade chokepoint. By contrast, several issues have impeded the emergence of a similar multilateral framework for the tri-border area. First, the countries share concerns about infringements on their sovereignty by partner states during potential security operations. Joint patrols, allowing for the presence of security forces in each other’s territorial waters and engagement during pursuits of criminal groups, would be a major step forward. But they would be hard to maintain as a routine task.
Second, all of the states have disputes over land features and maritime boundaries, making joint operations problematic. Malaysia and Indonesia have not yet resolved their Borneo land borders and maritime disputes, including in the Celebes Sea. Malaysia and the Philippines, in turn, dispute the eastern part of the state of Sabah. Cooperation could allow another party to gain information about offshore resources, acting on them and aggravating issues on overlapping claims. Still, efforts are underway to address these issues. The precedent already exists: Indonesia and the Philippines agreed to delimit their exclusive economic zones covering the Mindanao, Celebes, and Philippine seas. Malaysia and Indonesia similarly resolved their dispute over the Sipadan-Ligitan Islands in the Celebes Sea through the International Court of Justice, which ruled in favor of Malaysia in 2002.
Finally, all three countries suffer from weak coast guard capabilities and largely uncoordinated maritime agencies. All three have thousands of islands, making complete patrolling impossible. And all three countries share a history of hostile policies against each other, feeding mistrust and impeding combined efforts in the tri-border area.

Resisting Outside Frameworks

Understandably, the tri-border area states welcome external support to upgrade their maritime capabilities. But the openness ends there. Malaysia, Indonesia, and the Philippines have resisted external efforts to impose multilateral maritime security cooperation frameworks, fearing undue influence and infringements on their sovereignty.
Starting in 2016, Washington has committed $425 million for its Southeast Asia Maritime Security Initiative over the next five years to enhance the maritime surveillance capabilities of Malaysia, Indonesia, and the Philippines. However, the amount is relatively insignificant, and the initiative focuses on upgrading the capabilities of individual states rather than fostering multilateral cooperation. Moreover, it prioritizes domain awareness in the disputed South China Sea in response to China's activities instead of the tri-border area. And while the United States has greatly helped the Philippines with its maritime capabilities, it has struggled to assist Malaysia and Indonesia in the same way, let alone create an integrated regional maritime security system.
Japan has confronted similar issues. It signed defense deals with Indonesia and Malaysia in 2015 and the Philippines in 2016. It also spearheaded the creation of the first regional intergovernmental Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia in 2004. Twenty contracting parties signed the agreement, which promotes information sharing to facilitate incident response. But unlike the Philippines, neither Indonesia nor Malaysia is a contracting party. (Both countries also opposed the U.S.-proposed the Regional Maritime Security Initiative in 2004 for its military focus.)
As trade flows continue and likely increase in the tri-border area, more resources will be committed to addressing security challenges there. Malaysia, Indonesia, and the Philippines will lead the effort in shaping the area's maritime security framework, while simultaneously restricting the involvement of other countries. In the process, they will lay the foundation for collaboration on regional disputes, including in the South China Sea. As they do, lingering concerns about infringements on sovereignty and weak state control will impede cooperation. Unless security issues are competently addressed on land, the tri-border states will struggle to improve maritime security conditions in the region, whether individually or in concert.
Lead Analyst: Roman Muzalevsky

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