Indonesia Denies Malacca Strait Tax Plan After Finance Minister’s Joke
Jakarta. Indonesia has said that it would not introduce a levy on ships transiting the Malacca Strait after Finance Minister Purbaya Yudhi Sadewa jokingly suggested copying Iran’s move of setting up a tollbooth at the Strait of Hormuz.
Purbaya recently made headlines for saying that Indonesia could have charged tolls on ships using the Malacca Strait, a key trade route also bounded by Malaysia, Singapore, and Thailand. The minister -- known for his bluntness -- made the statement in a lighthearted tone, ending his remark by saying: “If only that were possible, but that’s not the case”. The suggestion quickly fueled reactions, including from close neighbor Kuala Lumpur.
Foreign Minister Sugiono -- speaking to the press after hosting his Filipina counterpart Maria Theresa Lazaro -- clarified that there were no plans for a Malacca levy, citing that its actions should align with the UNCLOS. This decades-old international maritime law declares that any toll for passage would be illegal.
“As an archipelagic state, we must respect international law: the UNCLOS. This law recognizes Indonesia as an archipelagic state, provided that we do not impose levies [on transiting ships],” Sugiono said in Jakarta on Thursday.
“We hope for a free passage. As a trading nation, we support freedom of navigation. 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.”
Malaysian Foreign Minister Mohamad Hasan warned that anything done in the 900-kilometer waterway must involve the cooperation of all four bordering countries. “It cannot be done unilaterally,” Mohamad was quoted as saying by the Singapore-based Straits Times.
His Singaporean counterpart Vivian Balakrishnan had previously said that waterway transits are not a “privilege to be granted by the bordering state”.
The Malacca Strait carries almost 22% of the world’s maritime trade. Amid the Malacca toll confusion, two of Indonesian tankers are still waiting for their Hormuz passage. Iran has tightened its grip on the Strait of Hormuz following US-Israeli attacks on its capital in late February. Parts of the shipping lane are located in the Iranian territorial waters, enabling Tehran to control the traffic. Iran has just announced that it had received the first revenue from the transit fees.
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