Environmental disputes between neighboring states, particularly Indonesia and Malaysia, pose complex challenges to cross-border governance. Although comparative legal scholarship has examined their respective legal systems, research integrating customary dispute resolution into transboundary environmental governance remains limited. This article compares environmental dispute resolution under Indonesia's civil law system and Malaysia's common law system, focusing on the role of customary law (*adat law*) alongside formal legal mechanisms. Using a normative juridical methodology and comparative legal analysis, the study examines statutory frameworks, alternative dispute resolution mechanisms, including mediation, negotiation, and arbitration, and customary governance practices. The findings indicate that customary institutions can support environmental dispute resolution through restorative justice and community-based resource management. However, their integration into formal systems remains constrained by regulatory fragmentation, jurisdictional uncertainty, and limited bilateral coordination. The study proposes three measures: establishing an Indonesia–Malaysia Joint Bilateral Environmental Panel, incorporating customary mediation into national dispute resolution frameworks, and involving indigenous border communities in transboundary conservation through Community-Based Natural Resource Management (CBNRM).
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