Indonesia wants to send hundreds of fishermen to the Natuna Islands to assert its sovereignty over nearby areas of the South China Sea to which China says it also has claims.
President Joko Widodo has launched an unprecedented campaign to bolster fishing, oil exploration and defence facilities around the island chain after a series of face-offs between the Indonesian navy and Chinese fishing boats.
"We are aware that if we don't do this there could be many claims that disrupt the integrity of Indonesian territory," Chief Maritime Minister Rizal Ramli told reporters on Wednesday.
The announcement of the plan came a day after the Permanent Court of Arbitration in the Hague rejected China's historic claims to almost all of the South China Sea and said it had breached the Philippines' sovereign rights by endangering its ships and fishing and oil projects.
Indonesia is not part of the broader dispute over claims in the South China Sea and it has remained neutral following the ruling, calling for peace and stability.
But Indonesia objects to China's inclusion of waters around Natuna being included within its "nine-dash line", a demarcation on China's maps to show its claims.
Ramli said he would seek cabinet approval this month for the relocation of fishermen from the crowded island of Java to Natuna.
Under the plan, the government would move about 400 wooden boats of 30 tonnes or more to Natuna by the end of October. Fishermen who go could get subsidised housing, while the island's ports, power supply and internet will be upgraded.
The programme is expected to boost fishing in Natuna waters from 9.3 percent of sustainable catchment levels to 40 percent in less than a year.
"We will build cold storage there. We hope this will become the biggest fish market in Southeast Asia," Ramli said.
Ramli, who also oversees energy
as part of his portfolio, said he also would review oil and gas concessions in Natuna and revoke permits from companies that are not developing their blocks.
ExxonMobil, ConocoPhillips, Chevron, and PTT Exploration and Production are among foreign oil companies
with stakes in Natuna, which holds one of the world's largest untapped gas reserves.
Indonesia's foreign minister, Retno Marsudi, said no one wanted conflict in the South China Sea and she called on all parties to avoid raising tension.
"We are sure that if all sides respect international law, then it will be easier to achieve regional and global peace and stability," she told reporters.
(By Fergus Jensen; Writing by Randy Fabi; Editing by Robert Birsel)