Jakarta. Finance Minister Purbaya Yudhi Sadewa said Friday that he wasn’t serious about his Strait of Malacca tax comment, saying that he was aware that the levy would contravene international maritime law.

Just two days ago, Purbaya made an ill-received joke that Indonesia would slap levies on ships transiting the Malacca Strait, replicating Iran’s move at the Strait of Hormuz. He ended his remark by saying: “If only that were possible, but that’s not the case”. The comment quickly landed Purbaya -- or the Indonesian government -- in hot water. The suggestion has worried Malaysia, which also shares the territory along the strait that offers the shortest route between the Pacific and Indian oceans.

“I wasn’t being serious at the time,” Purbaya told reporters in Jakarta, citing that the government “never had such plans”.

The decades-old UNCLOS -- the maritime law that grants Indonesia its archipelagic statehood -- prohibits charges on ships only for passing through. It only allows fees for services rendered to ships. 

“As an UNCLOS signatory, we, [Indonesia] can’t impose levies on transiting vessels, except for the services,” Purbaya said.

“UNCLOS upholds freedom of navigation. We support it, and we have already ratified this treaty.”

He floated a plan to improve ship-related services, including refuelling, in the Sunda Strait or Lombok Strait, which he sees as a legal option to beef up state receipts. 

According to Purbaya, many vessels today prefer to anchor in Singapore, the world’s largest refueling hub for ships. For context, the two aforementioned straits are the deep-water alternatives for bigger vessels to the Malacca Strait. In 2020, Indonesia officially implemented a traffic system in these waterways to separate ships moving in opposite directions.

“We have opened up the Sunda Strait and Lombok Strait maritime routes. We can optimize the services that the government can provide there to grow [state] revenue. So we won’t be like gangsters that demand money [from ships] that are only passing,” Purbaya said.

A day earlier, Foreign Minister Sugiono made a similar clarification to the controversial statement, highlighting Indonesia’s respect for international maritime law. He said: "I believe that there is a commitment from many countries to create a free, neutral, and mutually supportive shipping lane. So no, Indonesia is in no position to [impose tolls]. That’s wrong.”

Ex-Deputy Foreign Minister Dino Patti Djalal warned of the "disastrous" consequences of a Malacca Strait levy. It could undermine Indonesia’s “credibility as a champion and architect of the UNCLOS”, while "harming the atmosphere" at Cebu’s ASEAN summit next month. President Prabowo Subianto is expected to join the other Southeast Asian leaders at the forum.

“Going forward, I respectfully remind the government officials to exercise caution and wisdom in making public statements that may generate unnecessary concern,” Dino said.

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