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Joshua Ho[1]
At 520 nautical miles in length and being extremely narrow in some places, the Malacca and Singapore Straits link the Indian Ocean and the South China Sea and provide the artery through which a huge proportion of global trade is carried. Tankers and bulk carriers move vast quantities of oil, coal, iron ore, and minerals to the manufacturing centres of Southeast and Northeast Asia, while millions of containers flow in the opposite direction to feed consumer markets all over the world. Some 60,000 ship movements carrying as much as a quarter of the world’s commerce and half the world’s oil pass through the Straits of Malacca and Singapore each year.
As a result of the high volume and value of materiel transiting the Straits, any serious disruption to the flow of maritime traffic through this channel would have a widespread and far-reaching detrimental effect. The effect may include having ships detour 600 miles, which may also result in higher freight rates and costlier goods and commodities. With this in mind, the International Maritime Organisation (IMO) identified the Straits of Malacca and Singapore as an indicative example to highlight various issues relevant to the security discussion of shipping lanes.
IMO’s concerns over the security of ships plying the Malacca and Singapore Straits is also founded on the fact that in 2004 Southeast Asia was still, unfortunately, recording the highest number of pirate attacks globally. With this high number of attacks, there had also been an upturn in crew abductions, which resulted in suggestions that this could signal a move by terrorists to train themselves in operating and navigating large commercial vessels, mirroring the actions of the 9/11 terrorists. This perception of risk of ships to terrorist attack in the Malacca Straits is exacerbated by the physical geography of the Straits and history of piracy in the region. For example, the Malacca Strait is a natural ‘choke point’ for shipping, and has, as a result, been a haven for pirates for centuries. Its shallow reefs, innumerable small islands, and the fact that the sheer volume of traffic often forces ships to transit at greatly reduced speeds, makes the area particularly vulnerable, and thus the perfect environment for those who wish to board ships illegally.
As a result of heightened concerns over the security of ships plying the Malacca and Singapore Straits, the IMO decided to convene a high-level conference to consider ways and means of enhancing safety, security and environmental protection in the Straits of Malacca and Singapore. The event, which was to take place in Jakarta, received the go-ahead from the IMO’s Council during its 93rd session which met on the 15-19 November 2004 at IMO’s London Headquarters.
The event was envisaged as a practical demonstration of the seriousness IMO attributes to the protection of shipping lanes of strategic significance and importance and would serve as a vehicle for identifying issues which need to be addressed. The event would enable the littoral and the user States, other stakeholders and IMO to develop and put in place appropriate action plans. The IMO initiative to seek an international approach on a delicate and sensitive issue such as the protection of the Malacca and Singapore Straits against terrorism had also been welcomed by the United Nations General Assembly, which, in a resolution on Oceans and Law of the Sea adopted on 10 November 2004, encouraged the Secretary-General of the IMO to continue work on the issue in collaboration with the littoral and user States.
With the mandate of the United Nations General Assembly and the IMO Council, the first of the series of meetings on ‘Enhancing the Safety, Security and Environmental Protection of the Malacca and Singapore Straits’ was convened in Jakarta, Indonesia, on the 7-8 September 2005. The Meeting was jointly organised by the IMO and the three littoral states of Indonesia, Singapore and Malaysia. It was clear from the outset that addressing the maritime security of ships plying the Malacca and Singapore Straits was a key reason why the IMO and the international organisations represented decided to set up the first of a series of meetings between the IMO and the littoral states.
However, the littoral states did not share the same sentiment for the meeting. They felt that there were sufficient multilateral channels that included extra-regional countries to address maritime security already, and that there was no need for another forum to address maritime security. Current forums to address maritime security include the Meeting of the Chiefs of Defence Forces of the three littoral states, the ASEAN Regional Forum which has undertaken several maritime security initiatives to spur multinational cooperation to address security issues in the region, and the Western Pacific Naval Symposium, involving over 20 regional navies, and which has also expanded the scope of its activities to include maritime security. These other maritime security fora are above and beyond the bilateral and multilateral arrangements between the three littoral countries which has resulted in coordinated air and sea patrols as well as the setting up of information exchanges and hot links between the respective operations centres. The littoral states wanted security to be within the purview of the three coastal countries only and if extra-regional countries were to be involved, it was strictly to be in capacity building, information exchange and in the provision of training, and the contribution of funds in accordance with Article 43 of the United Nations Convention on the Law of the Sea (UNCLOS).
As the littoral states were eager to set the framework for discussions at the Jakarta Meeting in September 05, the Fourth Tripartite Ministerial Meeting of the Littoral States was held just prior to the Jakarta Meeting on 1-2 August in Batam, Indonesia. The meeting was held between the foreign ministers of the three countries and laid down some basic ground rules that the littoral states would adhere to in their subsequent deliberations at the Jakarta Meeting. In particular, the Batam Statement declared that:
(1) the primary responsibility over the safety of navigation, environmental protection and maritime security in the Straits of Malacca and Singapore rests with the littoral states;
(2) the measures taken in the Straits should be in accordance with International Law and in particular be consistent with UNCLOS, and be cognisant of the sovereignty of the littoral countries;
(3) the international community, agencies such as the IMO, and the major user states have a role to play; and
(4) the establishment of a Tripartite Technical Expert Group (TTEG) on Maritime Security could complement the work of the TTEG on Safety of Navigation and the Revolving Fund Committee.
Given the contrasting interests of the littoral states and the user states, the impact of the Jakarta meeting was limited. First, the Jakarta Meeting upheld the Batam Joint Statement and the importance of engaging the states bordering the funnels leading to the Straits, in particular, India and Thailand. It also recognised that there could be an establishment of a Tripartite Technical Experts Group (TTEG) on Maritime Security to complement the work of the TTEG on Safety of Navigation. In particular, the Jakarta Meeting agreed on four particular issues.
First, it agreed that a mechanism be established by the three littoral states to meet on a regular basis with user states, the shipping industry and others with an interest in safe navigation through the Straits, to discuss issues relating to the safety, security and environmental protection of the Straits, as well as to facilitate cooperation in keeping the Straits safe and open to navigation, including exploring possible options for burden-sharing, and to keep the IMO informed, as appropriate, of the outcome of such meetings.
Secondly, it agreed that efforts should be made through the three littoral states to establish and enhance mechanisms for information exchange within and between the states, building, where possible, on existing arrangements such as the Tripartite Technical Experts Group mechanisms, so as to enhance maritime domain awareness in the Straits and thus contribute to the enhancement of cooperative measures in the areas of safety, security and environmental protection.
Thirdly, it agreed to promote, build upon and expand cooperative and operational arrangements of the three littoral states. Actions may include coordinated maritime patrols in the Straits, and the work of the Tripartite Technical Expert Group on Maritime Security, through, inter alia, maritime security training programs and other forms of cooperation, such as maritime exercises, with a view to further strengthening capacity building in the littoral states to address security threats to shipping.
Fourthly and lastly, it invited the IMO to consider, in consultation with the littoral states, convening a series of follow-on meetings for the littoral states to identify and prioritise their needs, and for user states to identify possible assistance to respond to those needs, which may include information exchange, capacity building, training and technical support, with a view to promoting and coordinating cooperative measures.
As a follow-on to the meeting held in Jakarta a year earlier, the second meeting on ‘Enhancing the Safety, Security and Environmental Protection of the Malacca and Singapore Straits’ organised by the IMO and the three littoral states of Malaysia, Singapore and Indonesia was held in the Malaysian capital from 18-20 September 2006. In particular, the Kuala Lumpur Meeting rose to the challenge of finding ways to enhance cooperation between the littoral states and the user states by proposing a mechanism for cooperation between the user states and the littoral states in accordance with Article 43 of the United Nations Convention on the Law of the Sea (UNCLOS).
The ‘Cooperative Mechanism’ proposed consists of three components. The first is the setting up of a Forum for Cooperation under the Tripartite Technical Experts Group (TTEG), which presently comprises technical experts from the maritime authorities of Malaysia, Indonesia and Singapore. The Forum will form the main avenue for interested user states and other interested parties to be invited to meet and cooperate with the littoral states. The outcome of the Forum should then be transmitted to the TTEG and if necessary to the IMO.
The second component was a package of six projects by the littoral states to secure funding and participation from the user states and interested parties. The six projects included:
(1) A proposal by Malaysia for the removal of shipwrecks in the Straits of Malacca and Singapore and the removal of 12 wrecks over the next four years, amounting to US$4 million and US$15 million per wreck;
(2) Another proposal by Malaysia for cooperation and capacity building on Hazardous and Noxious Substance (HNS) preparedness and response in the Straits of Malacca and Singapore including the setting up of HNS Response Centres, at US$3.5 million;
(3) A proposal by Singapore for a demonstration project of automatic identification system (AIS) transponders on small ships of less than 300 gross tonnes which are currently not required to carry them under the Safety of Life at Sea, or SOLAS, Regulations. The AIS will allow the tracking of the movements of small craft in the Malacca and Singapore Straits, at US$400,000;
(4) Another proposal by Singapore for the setting up of a tide, current and wind measurement system for the Straits of Malacca and Singapore to enhance navigational safety and marine environment protection, at US$774,000 capital cost and maintenance for the first four years of US$627,000;
(5) A proposal by Indonesia for the replacement and maintenance of 17 aids to navigation in the Malacca and Singapore Straits, at US$18.3 million over ten years; and
(6) A proposal by Indonesia for the replacement of seven aids to navigation damaged by the tsunami, at US$276,000.
The contributing parties may participate in the projects in close cooperation with the relevant littoral states through the Project Coordination Committee to be established under the TTEG.
The third component was the setting up of an Aids to Navigation Fund where interested stakeholders could volunteer financing of the maintenance of critical aids to navigation in the Malacca and Singapore Straits. The mechanism for the operation of the Fund has yet to be worked out.
It was clear at the Meeting that China viewed itself as a major regional player. China was one of two countries that committed to any of the projects proposed, even offering to undertake the Indonesian proposal to replace navigational aids damaged by the 2004 tsunami. It would participate in the Singaporean proposal to set up a tide, current and wind measurement system, and the Malaysian proposal to develop an HNS preparedness and response capability. That China was one of two countries to come forward was surprising given that a TTEG-User States Cooperation Meeting was held in Singapore on 31 March 2006, where details of the projects were presented. In particular, the Singapore meeting involved the 11 major user states of Australia, China, Denmark, Greece, Japan, Netherlands, Norway, Panama, South Korea, United Kingdom, United States, and other stakeholders like the IMO and Intertanko. The United States was the other country that had pledged support for the projects and in particular offered its expertise to build up capacity of the littoral states in handling Hazardous and Noxious Substance (HNS) in the Straits of Malacca and Singapore.
Significantly, at the IMO-KL Meeting, China also presented details of its bilateral cooperative agreements and programs with the littoral states, which signalled its increasing interest in the region. The agreements included the MOU between China and Indonesia on Maritime Cooperation signed on 25 April 2005, the MOU between China and Malaysia on Maritime Cooperation signed on 25 August 2006, and the establishment of a mechanism for information exchange on the security of the Malacca Straits with Singapore, to be signed by late 2006.
The US and Japan both had very specific interests at the Kuala Lumpur Meeting. The US, as well as the shipping industry represented, was deeply interested in upholding the transit passage regime under UNCLOS to ensure that the shipping of goods, raw material, and energy remained unimpeded. They were also ready to oppose any attempt to impose tolls or charges for transiting the Malacca and Singapore Straits. Preserving the freedom of navigation is a laudable goal, but the lack of response on how the user states could contribute was a diplomatic setback given that the US had hosted the Alameda Conference comprised of some of the stakeholders, in February 2006. The Alameda Conference was to facilitate possible assistance from the user states and sectors of the industry to enhance the capability and capacity of the littoral nations. The US ought to have revealed the conclusions of the Alameda Conference at the IMO-KL Meeting for the benefit of the littoral states.
Japan, on the other hand, was a major contributor to maintaining the safety of navigation and environmental protection in the Straits. For example, Japan contributed, through the Malacca Straits Council, a total of 13.2 billion yen (US$113 million) for the maintenance of navigation aids from 1968 to 2005, and a total of 1.5 billion yen (US$13 million) for environmental protection from the period 1973 to 2005. Japan must have come away disappointed that none of the other user states or stakeholders were going to share their burden under the aegis of the fifth project.
But why was Japan disappointed? Firstly, there are 51 critical aids to navigation in the Straits of Malacca and Singapore which are owned respectively by Singapore, Malaysia, and Indonesia. Currently, Singapore maintains and operates 5 of the 51 aids to navigation, Malaysia maintains and operates 11 of the 51, and Indonesia maintains and operates 5 of the 51. A Japanese consortium known as the Malacca Straits Council has been maintaining the remaining 30 of the 51 aids to navigation. Over the last 30 years, the Malacca Straits Council has spent US$130 million or about US$4.3 million per year on maintenance of these aids to navigation. The Malacca Straits Council receives funding contributions from four sources:
(1) the Nippon Foundation, which funds 74 per cent of the activities of the Malacca Straits Council;
(2) the Japanese Maritime Foundation, which funds 9 per cent its activities;
(3) the Japanese Government, which funds 5 per cent of its activities; and
(4) the Association of Related Industries, which funds 12 per cent of its activities. The Association of Related Industries comprises the Japanese Shipowner’s Association, the Petroleum Association of Japan, the General Insurance Association of Japan, and the Shipbuilder’s Association of Japan.
Due to a competitive business environment, the Japanese maritime industries have indicated that they may have to reduce their funding for such maintenance activities particularly since more users have been benefiting from the use of the aids to navigation. Studies done by the Japanese have indicated that owners of shipping companies in Greece, China, Germany, South Korea, Taiwan, India, Malaysia, Iran, Belgium, Israel, Switzerland, and Cyprus have seen an increase in their usage of the Straits whilst the Japanese have seen a decrease over the ten year period from 1994 to 2004.
As a result of the setback at the IMO-KL Meeting in getting the users to contribute to the fund to maintain aids to navigation, Japan is now in the process of trying to get industry involved in contributing to the fund. They are now proposing a voluntary contribution of one cent per gross tonne be paid to a fund set-up for maintaining aids to navigation by ships transiting the Straits.
Besides the lack of support for the funding of safety related projects, security measures and issues were also absent from the IMO-KL Meeting, which focused more on the implementation of UNCLOS Article 43. This was understandable because there has been a steady decline in the number of piracy and armed robbery cases over the last two years. The low number of incidents have been attributed to the security measures undertaken by the three littoral countries. However, security issues will still need to remain on the future agenda as the raison d’être for the IMO-Littoral States series of meetings, which was endorsed by the United Nations General Assembly, was primarily to address security issues in the Malacca and Singapore Straits.
Given the contrasting priorities of the littoral and user states, how can the momentum of the IMO-Littoral States series of meetings be sustained, in view of the fact that the third meeting will be held in Singapore sometime in the third quarter of 2007? First, as the littoral states have presented several projects for adoption, the major user states and interested stakeholders, like the shipping companies, will have to contribute to some of them, as China and the United States have done. This will ensure continued goodwill between the user states, stakeholders and the littoral countries. In particular, dual-use projects which improve both safety and security, such as Malaysia’s proposal for the setting up of HNS Response Centres and Singapore’s demonstration project of AIS transponders on small ships, should be supported. These projects will not only improve the safety of navigation but also security for ships plying the regional sea lanes.
Secondly, a comprehensive approach will have to be taken with respect to maritime security, which will have to include safety and environmental protection as well. Increased ratification of major conventions, which affect both the safety of navigation as well as the security of ships, should be encouraged. In particular, the littoral states should be encouraged to ratify the 1979 Convention on Maritime Search and Rescue (SAR Convention), the Convention for the Suppression of Unlawful Acts against the Safety of Maritime Navigation (SUA Convention), and its 2005 Protocols, as well as the Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia (ReCAAP). Consistent with the comprehensive approach, the littoral states should also be encouraged to ratify conventions that serve to preserve the maritime environment.
Thirdly, the interests of Japan to burden-share their contribution to maintain the navigational aids in the Malacca and Singapore Straits should be supported. In particular, the Japanese interest could be supported through the Aids to Navigation Fund. Greater support for this fund would also benefit Indonesia, as many of the navigational aids that need maintenance are on the Indonesian side, as witnessed by the two navigation projects proposed by Indonesia. However, the governance of this fund will have to take the form of an international organisation, where contributors have a say in how the funds are distributed and to what projects the funds are used for. Only when transparency and full accountability are assured will user states and other stakeholders be willing to contribute to the Fund.
In a world of growing economic interdependence, local disruptions can have global ramifications. Disruptions to the flow of shipping traffic in the Malacca and Singapore Straits could come in the form of terrorist acts at sea or at port; transnational crimes, like piracy or armed robbery; international or internal armed conflict; natural disasters; accidents due to navigational errors; gridlock; and restrictions to passage, either through excessive sovereignty claims or through excessive control of shipping. For example, one study has estimated that the cost of re-routing tankers to Japan could increase the cost of doing business by US$88 million (for a 3-day diversion) or by US$1.2 billion (for a 2-week diversion).
If we were to take into account the impact to other economies, the amount would be significantly more because two-way trade between Asia and other parts of the world has been increasing at an astounding annualised rate of beyond 25 per cent for the period of 2002 to 2004. This figure includes two-way trade between Asia and Europe, Asia and the Middle East, as well as Asia and Africa. This annualised figure is set to increase in the future as the economic centre of gravity continues to shift to Asia. As a result, beneficiaries from the increasing openness of the global trading system, be it states or corporations, will have increasingly to share the costs of maintaining this global trading system if they want to continue benefiting from it.
As Joseph E. Stiglitz, the Nobel laureate, has suggested, globalisation has increased the inequality between the skilled and the unskilled, giving rise to a growing gap that could derail globalisation itself. One way to make globalisation work therefore is for the winners to compensate the losers, and still come out ahead. It is in this spirit that the major maritime nations and shipping corporations will have to step up to the plate when it comes to enhancing the safety, security and environmental protection of the Malacca and Singapore Straits.
[1] Joshua Ho is a Senior Fellow and Coordinator of the Maritime Security Programme at the S. Rajaratnam School of International Studies, a Graduate School of Nanyang Technological University.
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URL: http://www.austlii.edu.au/au/journals/MarStudies/2007/2.html