Indonesia and China Face Off Over Increasing Maritime Intrusions

Indonesia is facing a flurry of naval challenges in its sprawling offshore territories as China and other countries move south and attempt to explore and exploit the waters and continental shelves of the South China Sea, the Java Sea, and the Indian Ocean. Several recent incidents point to an increasing trend of maritime challenges for Indonesia’s naval and coast guard forces, which have successfully intercepted foreign ships and unmanned underwater vehicles that appear to be illegally exploring Indonesian waters. Several nations’ vessels have conducted illegal or secretive activity in Indonesian waters, with the majority being from the People’s Republic of China (PRC).

The South China Sea and surrounding waters hold rich oil and gas reserves. For the nations that have sovereignty over those waters, particularly Vietnam, Indonesia, Malaysia, and the Philippines, this area has potential to stabilize economies and provide natural resources for decades to come. Billions of gallons of oil sit beneath these oceans. Trillions of dollars of global trade flows through the region’s straits. However, maritime shipping routes throughout the region are becoming congested, and the largest exporting country in the region — China — is exploring new routes to guarantee trade efficiency and redundancy as they build out their Belt and Road Initiative.

China’s maritime missions have become increasingly aggressive and covert, lacking transparency and breaking international laws which require them to identify their vessels and their missions. The combination of territorial disputes and lack of transparency has led to geopolitical conflicts, regional disputes, and an increasing U.S. naval presence in the region in an effort to protect allied waters.

Figure 1: Map of China (green) and Indonesia (orange) for geographic perspective. (Source: Wikipedia)

Indonesia’s Maritime Defense Challenges

During the week of January 11, 2021, the Indonesian Coast Guard (ICG) intercepted the Xiang Yang Hong 03 (向阳红03) (Figure 2), a survey vessel operated by the Chinese Ministry of Natural Resources’ Third Institute of Oceanology. The ICG discovered that the Xiang Yang Hong 03’s Automated Information System (AIS) global positioning reporting system was inactive. According to the International Maritime Organization (IMO), AIS is required to be active during international navigation, especially when entering another nation-state’s waters. Xiang Yang Hong 03, whose home port is in Xiamen, departed for its current voyage from the city of Sanya on Hainan Island on the morning of January 6. The trip coincided with a diplomatic meeting involving Chinese Foreign Minister Wang Yi on an official visit to Jakarta.

Figure 2: Xiang Yang Hong 03 survey vessel appears in port

According to Indonesia’s Maritime Security Agency (BAKAMLA), their patrol craft KN Nipah Island began shadowing the Xiang Yang Hong 03 on January 8 into the strategic Sunda Strait separating Java and Sumatra after it turned off its automated identification system (AIS). The Xiang Yang Hong’s AIS was deactivated twice while passing through the Natuna islands at the southern end of the South China Sea, and once in the Karimata Strait, northeast of the island of Belitung.

Figure 3: Map of straits and sea lanes in Southern Asian waters. (Source: CSIS)

Indonesia requires all ships transiting its archipelagic sea lanes to have functioning AIS and prohibits them from carrying out oceanographic research. The Xiang Yang Hong 03 responded via radio that their AIS was damaged, which would not normally be concerning, except this is one of several similar recent incidents.

Chinese Underwater Drones

The Xiang Yang Hong 03 incident happened only a few weeks after a local fisherman accidentally discovered a Chinese unmanned underwater vehicle (UUV), likely a Sea Wing (Haiyi) glider, in Indonesian waters near Selayar Island in South Sulawesi — on the other side of Indonesia from where the Xiang Yang Hong 03 was transiting. The device was carrying a trailing antenna and had no identifying marks. The fisherman turned the device over to police and the Indonesian Navy, who claim that the device could have been used to explore underwater sea routes to enable covert submarine activity.

Figure 4: Suspected Chinese Sea Wing drone recovered by a fisher and the Indonesian navy. (Photograph: @Jatosint/Twitter)

Figure 5: China’s Sea Wing underwater drone. (Source: www.navaldrones.com)

Deepfar Ocean Technology

Sea Wings were developed by Tianjin-based Deepfar Ocean Technology Company (深之蓝), a Tianjin-based Chinese military contractor heavily involved in military technology projects. Deepfar is led by Wei Jiancang, a former People’s Liberation Army (PLA) officer and main shareholder, and has been supplying the PLA since its creation in 2013. Wei worked on missiles and lasers for underwater drones while attending the National University of Defense Technology (NUDT) for a master’s program. In 2019, Deepfar partnered with the Artificial Intelligence Military-Civil Fusion Innovation Center to build an underwater drone technology laboratory. The center partners with the PLA Academy of Military Science (AMS), China’s top military science research institution. Deepfar has received visits from Chinese officials such as Prime Minister Li Keqiang and Admiral Shen Jinlong, the commander of the PLA Navy (PLAN).

This was the third instance of a Chinese UUV discovered in Indonesian waters since March 2019, when a different variant of the Sea Wing UUV was discovered by Indonesian fishers in the Riau Islands nearer the South China Sea. Another UUV, reportedly with Chinese writing on it, was discovered in January 2020 in East Java. In all of these instances, the UUV’s point or vessel of origin is unknown. Although it is unclear what vessel deployed the drone found near Sulawesi, trackers say the Xiang Yang Hong 06 (向阳红06) left its port of Qingdao (north of Shanghai) on December 11 and switched off its AIS on December 18, north of the Sulu Sea in the Philippines. On December 26, the Xiang Yang Hong 06 re-activated its transponder, passed through the Molucca Sea between Sulawesi and Halmahera and then back into international waters north of Papua New Guinea. Between December 2019 and January 2020, 12 Sea Wing UUVs were deployed and recovered by the survey vessel Xiang Yang Hong 06, which docked in Zhoushan, Zhejiang in March 2020.

Figure 6: Known path of Xiang Yang Hong 03 since 2019. (Sources: The Intel Lab and USNI)

The latest discovery is the most significant for the Indonesian military, as it is reported that the drone was still active when the fisherman found it. The drone was reportedly still moving, the light was still blinking, and the forward sensors were still working. This is the first time the Indonesian military publicly announced that they secured the drone and are conducting a full investigation at the 2nd Fleet Command of the Indonesian navy in Surabaya. The investigation may lead to identifying its owner and the data that it had been collecting.

The correlation between the mission of Xiang Yang Hong 06 and its location in Indonesian waters during the time the Sea Wing was intercepted indicates a high likelihood that the UUV belongs to China. The two most recent instances of Chinese state-sponsored military technologies discovered in Indonesian waters are notable because neither were transmitting geopositioning data via AIS, which may indicate a covert operation intended to illegally survey sea channels in Indonesia’s Exclusive Economic Zone (EEZ).

Other Illegal Activity in Indonesian Waters

Indonesia spans over 17,000 islands and over six million square kilometers of Exclusive Economic Zone (EEZ). The vast sea space is a tempting open area for both nation-state militaries and criminals to conduct various illegal activities. On January 24, 2021, the Indonesia Coast Guard discovered two oil tankers conducting illegal oil transfers with national flags hidden and AIS and radios switched off. The suspicious behavior first detected on January 23 around 2130 GMT tipped off authorities to possible illegal activity. Upon investigation, Indonesian authorities identified the ships as the MT Horse, owned by the National Iranian Tanker Company, and the MT Freya, a Panamanian-flagged ship managed by Shanghai Future Ship Management Company. Crew members were reportedly from Iran and China, respectively, and some were detained on coast guard ships for questioning. According to authorities, the Iranian tanker was carrying around 280,000 metric tonnes of crude, while the other was empty and at the time of discovery. The tankers were actively transferring oil from MT Horse to MT Freya and allegedly caused an oil spill around the area where the oil transfer was taking place.

Figure 7: MT Horse and MT Freya upon discovery of illegal oil transfer activity. (Source: Indonesia Coast Guard)

Iran has been accused of hiding its oil sales and trade by disabling tracking on its oil transport ships in an effort to obfuscate how much crude Tehran is exporting around the world. Some experts speculate that this is a direct result of U.S. sanctions, but Iran counters the accusation, claiming that the seizure of the MT Horse has “nothing to do with” U.S. sanctions.

Territorial Disputes in the South China Sea

The South China Sea is one of the most valuable and disputed areas of the world today. Several countries maintain overlapping historical claims to the East and South China Seas, areas that hold potentially trillions of dollars of natural resources such as hydrocarbons and natural gas. As China continues to aggressively expand its presence throughout the seas, building artificial islands for military outposts and conducting covert underwater surveillance, countries such as Japan, Vietnam, Malaysia, Brunei, Indonesia, and the Philippines have grown assertive in defending their territorial claims through both military buildup in the region and filing claims in international courts. The United States has also increased its naval presence in the region in an effort to deter Chinese aggression and defend allied waters which it also relies on for transport of over $208 billion USD of goods every year.

Figure 8: South China Sea territorial disputes. (Source: Peace Palace Library) Under the 1982 UN Convention on the Law of the Sea (UNCLOS), coastal states can claim an Exclusive Economic Zone (EEZ) of up to 200 nautical miles. Those states have the exclusive rights to natural resource extraction within their own EEZs, but they must also allow passage through these zones. Because of their close proximity, some states in maritime Asia claim EEZs that are overlapping.

China’s Trade Routes and Extraterritorial Exploration

The United Nations Conference on Trade and Development (UNCTAD) estimates that approximately 80 percent of global trade (by volume) is transported by sea. Of that, 60 percent of maritime trade passes through Asia, with the South China Sea supporting nearly one-third of global shipping. With the second-largest economy in the world, China’s economic security is closely tied to the South China Sea and it is aggressively pursuing backup plans and alternative routes for shipping exports all over the world. There are currently several sea lines of communication (SLOC) in South Asia, including the Sunda Strait, Lombok Strait, and the Strait of Malacca, the latter of which is the busiest of the three. At its narrowest point, the Strait of Malacca is only 1.5 nautical miles wide, making it one of the world’s most notable strategic chokepoints (Figure 9).

Figure 9: Maritime chokepoints around Indonesia. (Source: CSIS)

China’s reliance on the South China Sea, and shipping channels such as the Strait of Malacca, leave it vulnerable to maritime trade disruptions. To counter these vulnerabilities, China has aggressively increased its projection of naval power in the Pacific region, including land reclamation across the South China Sea. China began dredging and building artificial islands on coral reefs to serve as military outposts, such as Panganiban Reef, or Meiji Reef (美濟礁) (Figure 10). China began land reclamation on the reef in 2014 and continued development despite losing jurisdiction under UNCLOS. In July 2016, the Permanent Court of Arbitration issued its ruling on a claim brought against China by the Philippines under UNCLOS, ruling in favor of the Philippines, which designated Panganiban Reef as Filipino territory and declared all Chinese land reclamation and dredging projects in contested territory in the South China Sea illegal. While China is a signatory to the treaty, it refuses to accept the court’s authority and continues to operate and claim ownership of the reef. The reef is now outfitted with anti-aircraft weapons and a CIWS missile-defense system.

Figure 10: Chinese military infrastructure built on Philippine-claimed Mischief Reef/Panganiban Reef, 2020. (Source: CSIS Asia Maritime Transparency Initiative)

Chinese Expansion in the Indian Ocean

China expanded its maritime exploration to the Indian Ocean to support its overseas interests, which further aggravates conflicts with its neighbor India. As a major sea line of communication (SLOC) for Chinese trade, and the sphere of influence of China’s greatest South Asian military competitor, the Indian Ocean is home to multiple Chinese strategic and economic priorities. In a 2019 defense white paper, China emphasized its maritime rights to protect overseas interests, which undoubtedly includes the movement of military equipment and construction materials to build military bases and commercial ports in this SLOC. China officially established a military base in the small African state of Djibouti in late 2017. Its strategic location at the west bank of the Gulf of Aden and the southern mouth of the Red Sea places it at the intersection of multiple trade routes connecting Asia, Africa, and Europe. In December 2019, Indian warships encountered a Chinese research vessel, the Shiyan-1, operating in waters inside the Exclusive Economic Zone (EEZ) of India’s Andaman Islands. The vessel retreated after receiving a warning from the Indian Navy. Chinese UUVs have also been dispatched in the Indian Ocean from research vessels operated by the Chinese Ministry of Natural Resources. In 2018, India signed a pact with Seychelles to build naval infrastructure on the Indian Ocean’s small archipelago to counter Chinese naval influence in the region. Under the agreement, India will be able to extend its military reach into the oceans and rotate its ships and aircraft through the islands.

While India has offered to help small, neighboring countries like Nepal, Bhutan, and Bangladesh develop infrastructure projects such as dams and roads, it is unable to match Chinese resources and efficiency in Belt and Road development projects. This predicament leaves China’s smaller, weaker, and poorer neighbors in a vulnerable position, both economically and geographically.