When it comes to maritime boundary disputes, Malaysia is willing to select from a wide range of policy instruments at its disposal: from legal to political negotiation, and from restraint to combative skirmishes at sea.
Malaysia can be accommodating, as it was with Indonesia when the two delimited their continental shelves in 1969 based on mutual understanding. Kuala Lumpur supported Jakarta’s quest for archipelagic status in exchange for a treaty that allowed Kuala Lumpur access through the Natunas. But Kuala Lumpur can also outsmart a bigger power, as when it went to court in the case of Sipadan and Ligitan in 2002 and won by the merit of having economic activities on the islands—which, for Jakarta, violated the prior understanding of restraint. Kuala Lumpur also legally challenged Indonesia’s interpretation that its EEZ and continental shelf in the north Natuna Sea are distinct (known as a dual boundary line) and engaged in an episodic confrontation with the Indonesian Navy around the oil-rich Ambalat block off the east coast of Borneo.
With China, as demonstrated from their Note Verbale exchanges in 2019-20, Malaysia has refused to recognize the existence of a dispute and challenged the legality of China’s nine-dash line. But at the same time, Kuala Lumpur has indicated it is willing to establish a bilateral consultation mechanism for the dispute and tacitly consented to China’s near-permanent presence in its waters. Conversations with several Royal Malaysian Navy (RMN) officers consistently noted that as long as Beijing encroached into its water with China Coast Guard (CCG) as opposed to PLA Navy (known as the White Hull diplomacy), Kuala Lumpur viewed it as an aggression it could tolerate.
Kuala Lumpur’s boundary management experiences have exhibited an unusually diverse set of behavior, demonstrating a pragmatic approach where major issue items such as entitlements in its maritime zone are negotiable. But when and why does Kuala Lumpur choose to be restrained or aggressive when approaching its maritime boundary disputes?
The key to making sense of Malaysia’s maritime boundary sensibility is to unpack how it conceptualizes its Tanah air (land and sea) or territorial integrity, which is utilitarian instead of ownership obsessed. From conversations with Malaysian elites and scholars, a shared theme emerged that the Malaysian concept of maritime territory emphasizes generating maximum benefits to those in the land. This makes Kuala Lumpur more willing to negotiate on its maritime zones, such as surrendering titles and ownership of maritime areas disputed with Brunei, in exchange for continued access over the area and the right to exploit oil deposits, as well as the commitment for Brunei to abandon its claim over Limbang (in Sarawak). The unequal value between land and the sea contrasts with Indonesia’s archipelagic notion that gives equal weight as it emphasizes uniting its disparate territory, thus inherently preoccupying it with securing ownership of its maritime zone.
Although Malaysia, as a small state, adheres to the law of the sea, UNCLOS is viewed as an instrument it can leverage to protect its interests rather than an unnegotiable constitution. Malaysia has gone to the international court of justice to settle maritime boundary disputes with a mixed record, winning the Sipadan-Ligitan case against Indonesia in 2003 but losing the Pedra-Branca case against Singapore in 2008. However, Kuala Lumpur agreed to go to court only after exhausting all diplomatic and political options. A view that sovereignty over territory is a Western-imposed concept continues to dominate, and the general attitude is that the sea should be regarded as an area of shared prosperity. Kuala Lumpur thus prefers to pursue political negotiation when it could secure benefits to its core interests: bolstering security, maximizing economic benefits, and deepening long-term relationships with key partners.
By postponing dispute resolution in the strait of Malacca (with Singapore and Indonesia) in exchange for joint patrol, Kuala Lumpur gained a better sense of security with which to manage a busy strait of global importance. Kuala Lumpur also shelves disputes in the South China Sea in favour of cooperation with Thailand and Vietnam. With Thailand, it has maintained the financially beneficial Joint Area for exploring and exploiting hydrocarbons in the two overlapping continental shelves since 1979.
Although Kuala Lumpur’s negotiating style may seem transactional, the premium is in preserving relationships with neighbors. With key partners, Kuala Lumpur refrains from demanding reciprocity to signal its recognition of their importance. This signalling is an implicit message that it expects the other party would put a relationship with Kuala Lumpur at a premium by respecting or catering to Kuala Lumpur’s core interests, particularly domestic regime legitimation and economic benefits.
Kuala Lumpur is handling Beijing’s grey zone activities in its waters quietly due to its effort to secure Chinese investments in the politically important region across Malaysia. But money is not the only prize it desires; Kuala Lumpur’s demonstration of flexibility is a signal to bolster its long-term relationship with Beijing, part and parcel of its longstanding strategy of facilitating Beijing’s regional interests adopted as the Cold War ended. Kuala Lumpur believes that putting a premium on its relationship with Beijing allows it to amplify its regional agenda with Beijing’s support.
Some RMN officers argue that Malaysia’s ability to preserve its relationship with Beijing offers a security buffer from its assertiveness in the South China Sea. In addition to the absence of physical interference (despite the presence of the CCG) against their oil exploitation activities off the coast of Sabah and Sarawak, some evidence cited includes the prevalence of China’s illegal fishing facilities in countries deemed more hostile such as Indonesia, and the use of water cannons against others, such as the Philippines. When asked, the officers insisted that a physical confrontation with CCGs had yet to happen; thus, they continued to put aside the need to counter Chinese grey-zoned activities.
Driven by its focus on maximizing benefits, it seems Malaysia’s primary approach toward China’s potential occupation of disputed maritime areas is not defending them but reaping as many resources as possible from them before it happens. Kuala Lumpur does actively put its legal position on the record via submissions to the Commission on the Limits of the Continental Shelf in 2009 and 2019. But these insurance policies were never intended to invalidate the nine-dash line; the objective was to reconcile its conflicting aspiration to maintain a close relationship with Beijing while still securing its legal position.
Overemphasis on relationship-building with an expansionist power is perilous, as Kuala Lumpur learned first-hand from Jakarta. In the early 1960s, Kuala Lumpur backed down from its claim to the Natuna Islands and supported Indonesia’s quest for an archipelagic state, sacrificing the unity of its territory into two parts––the peninsula and the east. Kuala Lumpur hoped that Jakarta would value this as a gesture of good intent, allowing them to normalize their relationship. But not only does Jakarta continue to demand Kuala Lumpur ask permission before conducting activities in the surrendered maritime zone (e.g., fixing underwater cables between East and peninsular Malaysia), challenging Kuala Lumpur’s understanding of their bargain, but Jakarta is also making deals with other Southeast Asian states (primarily Vietnam) to legitimize its dual boundary line assertion, contesting Kuala Lumpur’s position.
Despite the bitter experience with Jakarta, Kuala Lumpur continues to be flexible and deliberative when thinking about its maritime boundaries, particularly with Beijing. It remains to be seen how Kuala Lumpur will react if Beijing exhibits behavior demonstrating that it no longer views Malaysia as a valuable partner: a crux of Malaysia’s wait-and-see approach.
