At the time of independence, the Indonesian state inherited all former Dutch territories in the Indonesian archipelago, from the island of Rondo to the northwest of Aceh to Merauke in Papua (see Map 1.1 on page 2). With this territory, Indonesia also inherited, in accordance with international law at the time, three miles of territorial waters around each island. As the Dutch did not have sovereignty over the waters between those islands, Indonesia did not acquire jurisdiction over those waters when it became independent. Rather, the old colonial boundaries were preserved in the construction of the post-colonial state by virtue of the principle of uti possidetis juris (Latin: ‘as you possess in law’).

Instead of uniting the nation, the waters between Indonesia's islands became a barrier to the unity and integrity of the state. The status of the waters within the archipelago was governed by the regime of international waters or high seas, even though they were used on a daily basis for domestic travel within Indonesia. More serious from a security point of view was the fact that Indonesia consisted of pockets of sovereignty separated by international waters that could be exploited by other nations for purposes ranging from economic exploitation to the achievement of security objectives.

To overcome this anomaly, on 13 December 1957 Indonesia proclaimed itself an archipelagic state (negara kepulauan) by virtue of a declaration by Prime Minister Juanda Kartawijaya. The Juanda Declaration was later enacted through Law No. 4/1960 on Indonesian Waters. This declaration gave rise to one of the most difficult and contentious issues discussed between 1973 and 1982 at the United Nations Conference on the Law of the Sea, namely the status of the waters between the islands that constitute archipelagic states such as Indonesia. The final result of a painstaking and long process of negotiation was the acceptance of the principle of the archipelagic state as outlined in the 1982 United Nations Convention on the Law of the Sea (UNCLOS), the convention that gave birth to a new legal regime at sea. The entire fourth chapter of the convention was dedicated to the question of archipelagic states (articles 46–54).