Revisiting International Cooperation on Illicit Trafficking by Sea: Indonesia and the Final Voyage of the M/V Wise Honest (Part I)

[Arron N. Honniball is a Research Fellow at the Centre for International Law (CIL), National University of Singapore, Singapore. Funding was provided to CIL by a Singapore Maritime Institute Grant (SMI-2019-MA-03).]

Introduction

The M/V Wise Honest (IMO 8905490) was, since 17 November 2016, a North Korean owned and flagged cargo ship engaged in numerous violations of United Nations Security Council (UNSC) Resolutions, notably illicit shipments of coal from the Democratic People’s Republic of Korea (DPRK) and heavy equipment to DPRK (paras. 21-27). In March 2018, she left Nampo (DPRK) for Indonesia’s territorial sea, laden with 25,000 tons of coal worth a reported USD $2,990,000 (Annex 17). Therein, she intended to conduct a ship-to-ship (STS) transfer to a Russian cargo ship – the coal’s eventual customer being South Korean (para. 35). That conspiracy ended abruptly on 2 April 2018 when Indonesian authorities intercepted and detained the M/V Wise Honest following a tip-off from the USA.

Through a series of legal proceedings, multilateral engagements and unfortunate legislative gaps: the M/V Wise Honest has been confiscated and sold for scrap; the crew are in the process of repatriation; and the coal is in Vietnamese custody awaiting a final decision. This two-part post delves into the M/V Wise Honest’s voyage, illuminating how states are cooperating, in practice, to counter illicit trafficking of North Korean coal through Southeast Asia. This will highlight the challenges the M/V Wise Honest has presented to Indonesia, demonstrating that Indonesia’s existing legislative practice is undermining its full compliance with UNSC Resolutions.

Part I of this two-part post introduces the UNSC framework that prohibits the illicit trafficking of DPRK-origin coal by sea, followed by an analysis of the state practice on interdicting the M/V Wise Honest. The core of Part II of this two-part post then reviews how states have addressed the persons, vessels and coal involved in its illicit trafficking scheme. The conclusion in Part II will reiterate the necessity of progressive reform to address legislative gaps, regardless of any temporary lull in illicit shipments.

The DPRK’s Weapons Programs and the UNSC’s Responses

As of June 2020, relations in the Korean Peninsula continue to deteriorate. The UNSC has long recognised the steadfast pursuit of nuclear weapons, weapons of mass destruction (WMD) and ballistic missile programs by the DPRK as a threat to international peace and security – notwithstanding the past’s broken shimmers of a peaceful resolution (see overview: Kraska 2019).

Beginning with Resolution 1718, one of the UNSC’s responses under Article 41 of the Charter of the United Nations has been to impose progressively broader and stricter prohibitions on the DPRK’s economic and diplomatic relations with UN Member States (overview). These relations are seen as enabling the DPRK’s pursuit of its weapons programs. One of the cornerstones of this response is disrupting the illicit trade of DPRK-origin coal, whereby the proceeds “contribute to the DPRK’s nuclear weapons and ballistic missile programs”. From 2016 (Res. 2270, para. 29), the UNSC has progressively ratcheted up the obligations upon all UN Member States to prohibit the sale, supply, or transfer of coal from North Korea (Res. 2321, para. 26), removing the previous ‘livelihood’ exception (Res. 2371, para. 8), prohibiting associated deceptive maritime practice (e.g. STS transfers, (Res 2375, para. 11)), and imposing obligations on port states to seize, inspect, and impound any vessel in their ports involved in the illicit trafficking of North Korean coal (Res. 2397, para. 9).

Despite this proliferation of specific – and binding – measures composing the ‘coal ban’, as well as the generally applicable restriction on bunkering or other services to North Korean-flagged vessels (Res. 1874, para. 17), the inspection regime (Res. 2270, para. 18), and the universal denial of port entry to designated vessels (Res. 2321, para. 12), “the illicit export of coal by the Democratic People’s Republic of Korea increased in 2019” (para. 55, emphasis added). It is therefore apparent that when key actors, vessels and illicit coal is within the jurisdiction of a UN Member State, that state should be fully equipped to both discharge its obligations and consider its discretionary rights in implementing the UNSC’s framework. Only with sufficient cooperation and domestic implementation of UNSC-mandated maritime measures will the illicit shipments be disrupted and thus, as envisaged by the UNSC, help bring an end to an identified threat to international peace and security. Until then, the DPRK will continue to exploit jurisdictions unwilling or unable to take measures.

Interdicting the M/V Wise Honest

The M/V Wise Honest’s final voyage involved the illicit trafficking of coal from North Korea and the planned illicit trafficking of heavy equipment to DPRK. In neither case did this conduct fall within the exceptions to the UNSC’s prohibitions (Res 2371, para. 8; Res 2397, para. 7). The UNSC’s maritime interdiction framework therefore applied throughout the voyage (Res 2375, paras. 7-12; Res 2397, paras. 9-16). These measures were adopted under Article 41 – and not Article 42 – of the UN Charter, meaning no use of force was authorised and in this case the general principle of exclusive flag state enforcement jurisdiction on the high seas and EEZ was preserved (UNCLOS, Article 92(1)). Illicit trafficking, even to fund nuclear weapons proliferation, provides no customary law or treaty-based exception to DPRK’s exclusive flag state jurisdiction (Allen 2019). The UNSC would have to authorise interdiction without flag state consent, as has occurred in other cases (Pedrozo 2020; Res 2182, paras. 11-21).

North Korea, as M/V Wise Honest’s flag state, would likely never have authorised foreign interdiction and equally, in such cases, never diverted the M/V Wise Honest to an appropriate port for inspection as then required (Res 2375, para. 8). Clearly, designation of the M/V Wise Honest by the UN Sanctions Committee and publication of DPRK’s noncompliance (Res 2375, paras. 8-9) would have been a more palatable result for DPRK than risking the loss of a cargo vessel at a time when all states are to prevent the transfer of new or used vessels to DPRK (Res 2397, para. 14). In practice, the UNSC interdiction regime certainly limited the flag states under which the M/V Wise Honest could safely operate. However, under the UNSC interdiction regime, once the M/V Wise Honest was flagged to DPRK (2016), it could largely operate with impunity in areas beyond the territorial seas of foreign states.

However, under the law of the sea the M/V Wise Honest made a crucial mistake by first concealing its flag state (Annex 16), and then attempting to double-flag to both Sierra Leone and DPRK (para. 34). This results in the loss of the flag state’s protection (UNCLOS, Article 92(2)) and a right of visit (UNCLOS, Article 110(1)(d)), exercisable by all states in waters beyond the territorial sea (UNCLOS, Article 58(2)). Further enforcement measures would depend on if the boarding state has any applicable laws in place, as well as the currently unresolved extent of extraterritorial enforcement jurisdiction available when an objecting flag state is absent (e.g. Murdoch 2020 for a recent expansive approach).

Once within Indonesia’s territorial sea, Indonesia had the right to exercise the full extent of its territorial enforcement jurisdiction over the M/V Wise Honest for false flagging (para. 34; para. 24; para. 22). A coastal state’s sovereignty in the territorial sea is limited by the rights of innocent passage granted to foreign flag states (UNCLOS, Articles 2(1), 17), but that clearly did not apply to the M/V Wise Honest as a stateless vessel.

Had the M/V Wise Honest not double-flagged, innocent passage could, in general, apply. However, within Indonesia’s territorial sea its conduct would have been prejudicial to the peace, good order or security of Indonesia, resulting in non-innocence and fully applicable Indonesian jurisdiction. Firstly, engaging in STS transfers prohibited by the UNSC (Res 2375, para. 11) violates the principles embodied in the UN Charter (UNCLOS, Article 19(2)(a)), involves transferring commodities (UNCLOS, Article 19(2)(g)) and does not have a direct bearing on passage (UNCLOS, Article 19(2)(l)). Secondly, the M/V Wise Honest sailed with its automatic identification systems (AIS) switched off (para. 34, para. 35), in violation of Regulation 19 of SOLAS Chapter V (gross tonnage: 17061). Indonesia may regulate this as a vessel requirement, even when relating to innocent passage (UNCLOS, Article 21(1)-(2)). This requirement must then be complied with by vessels to exercise innocent passage (UNCLOS, Articles 19(1), 21(4)). Thirdly, the M/V Wise Honest was destined to Samarinda port in breach of the port entry requirements (Case No. 682/Pid.B/2018/PN.BPP; Law (Indonesia) No. 17 of 2008, Article 47). Indonesia thus had coastal state enforcement jurisdiction to enforce this exercise of port state prescriptive jurisdiction (UNCLOS, Article 25(2)). Strong multilateral cooperation and clear rights of interdiction therefore set the stage to successfully counter this illicit trafficking of DPRK-origin coal and to fulfil the mandate prescribe by the UNSC. As will be seen in Part II of this post, a lack of appropriate implementing legislation by a proactive interdicting state can result in legal headaches that are difficult to address through alternative means.