NATO State-Owned Company Harmed, Indonesia's Neighbor Demands Trillion Rupiah in Damages

Malaysia has issued a formal notice to demand compensation from Kongsberg Defence & Aerospace for ‘direct and indirect’ costs arising from Oslo’s revocation of export licences for defence technologies intended for the Littoral Combat Ship (LCS) programme. According to Defence Minister Mohamed Khaled Nordin, the government has sought compensation for the ‘direct costs’ of around €126 million and additional compensation for indirect losses affecting the national defence programme. The Norwegian Foreign Ministry confirmed that export licences for certain defence technologies to Malaysia had indeed been revoked, with Oslo arguing the decision is solely related to Norway’s export-control rules. However, the decision directly blocked the shipment of the Naval Strike Missile (NSM) system and its launcher components, previously agreed under the 2018 contract for the Malaysian LCS programme. Kongsberg Defence & Aerospace is not a typical defence contractor; it is one of Norway’s cornerstone defence industry players and an integral part of the NATO defence ecosystem. The company is widely known for producing a range of modern weapon systems used by Western countries, from anti-ship missiles and air defence to advanced maritime warfare systems. Its best-known product is the Naval Strike Missile (NSM), a modern-generation anti-ship missile employed by various NATO members and Western allies, including the United States, the United Kingdom, Germany, Australia, and Japan. NSM is recognised for its high-precision strike capability, low radar detectability, and flexibility to engage maritime and land targets. The firm is also known for NASAMS, an air-defence system developed with the United States’ Raytheon, which guards strategic areas such as Washington DC and has become a key Western air-defence asset in supporting Ukraine against Russia.