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Monday, October 23, 2017

Indonesia: Local Piracy could lead to 'new Somalia'

April 21, 2016

Indonesia, Malaysia, Philippines ministers to meet in Jakarta as up to 18 Indonesians, Malaysians held captive in Philippines.

Indonesia fears piracy on a busy shipping route along its maritime border with the Philippines could hit levels seen in Somalia unless security is tightened, its chief security minister said on Thursday, following a spate of kidnappings.

The route lies on major shipping arteries that analysts say carry $40 billion worth of cargo each year. It is taken by fully laden supertankers from the Indian Ocean that cannot use the crowded Malacca Strait.

For the first time, concerns over rising maritime attacks by suspected Islamist militants are disrupting coal trade between the Southeast Asian neighbours, with two Indonesian coal ports suspending shipments to the Philippines.

Up to 18 Indonesians and Malaysians have been taken captive in three attacks on tugboats in Philippine waters along the route by groups suspected of ties to the al-Qaeda linked Abu Sayyaf militant network.

Abu Sayyaf, a small but violent group which has posted videos on social media pledging allegiance to Islamic State militants in Iraq and Syria, has demanded 50 million pesos ($1.1 million) to free the Indonesian crew.

"We don't want to see this become a new Somalia," Indonesian chief security minister Luhut Pandjaitan told reporters, referring to the southern Philippine waters of the Sulu Sea, where the abductions took place.

Piracy near Somalia's coast has subsided in the last few years, mainly due to shipping firms hiring private security details and the presence of international warships.

The foreign ministers of Indonesia, Malaysia and the Philippines would meet in Jakarta to discuss the possibility of joint patrols, Pandjaitan said.

He did not give a date, but said the armed forces chiefs of the three countries would meet in Jakarta on May 3.

Authorities at two Indonesian coal ports had blocked departures of ships for the Philippines and more suspensions were expected, said Pandu Sjahrir, chairman of the Indonesian Coal Mining Association, and a director of Jakarta-listed coal producer Toba Bara Sejahtera.

Toba had suspended all shipments to the Philippines, Sjahrir said. Other companies had cancelled shipments "from both sides", he added.

Indonesian state-owned coal miner Bukit Asam said it was diverting Philippine coal shipments to Hong Kong for the next three months. The company ships less than 1 million tonnes to the Philippines per year, Bukit Asam corporate secretary Joko Pramono told Reuters.

A company with a fleet of 40 dry cargo ships saw a silver lining, however.

"If Indonesia bans tugs and barges from exporting coal then it will have to travel in larger cargo ships, of 32,000 to 64,000 tonnes," said Khalid Hashim, managing director of Bangkok-listed Precious Shipping.

"All this would of course be beneficial for shippers like us."

Indonesia, the world's largest thermal coal exporter, supplies 70 percent of the Philippines' coal import needs, which Indonesian data shows stood at about 15 million tonnes, worth around $800 million, last year.

Philippine coal importers, however, said they could can import coal from other countries including Australia, South Africa and Russia and source more locally if Indonesian shipments dry up.

By Keith Wallis, Fergus Jensen and Kanupriya Kapoor

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