The 295-feet MV Caledonian Sky damaged an estimated 17,222 square feet of coral reefs in Raja Ampat in West Papua province last March 4 when it ran across the area at low tide, according to an evaluation team.
An official evaluation team found that the ship had been caught in low tide despite being equipped with modern Global Positioning System and radar instruments, according to team member Ricardo Tapilatu, head of the research center for pacific marine resources at the University of Papua.
Raja Ampat is a popular diving spot.
The damage to the slow-growing hard corals is likely to take decades to fix, and the compensation fund will be used to assist with the rehabilitation of the reef, along with the possibility of installing buoys to prevent ships from sailing too close to the reef in future.
The team said that ship owner Noble Caledonia has to pay $1.28 million to $1.92 million in compensation after the ecosystem of the marine sanctuary had been affected. They found out that the episode destroyed the marine's habitat especially the eight coral species discovered in the reef, which include the stony Acropora, Porites, Montipora and Stylophora family.
"Anchor damage from ships like these is bad enough", the web post continued, "but actually grounding a ship on a reef takes it to a whole new level".
Caledonian Sky, weighing 4,290 tons, was carrying102 passengers as well as 79 crew on a 16-night trip from Papua New Guinea to the Philippines.
ACLU plans 'resistance' rally, march during Trump's Nashville visit
He repeatedly hinted throughout the campaign that he might continue to hold rallies as president. President Trump speaks on the telephone in the Oval Office of the White House, Jan. 28.
Mr Victor Nikijuluw, marine programme director at environmental group Conservation International Indonesia, said: "Even when (the reefs) grow back, they will not be as pristine as they were before".
Noble Caledonia, the company that owns the ship, has since stated a fund to help the local population and is working with experts and the Indonesian government to determine a "fair and realistic" settlement to cover the damage.
The ship has since been refloated and the company said that based on the inspection "the hull was undamaged and remained intact".
Locals were upset and enrage by the damaged done to the corals.
The ship itself "did not take on water, nor was any pollution reported as a result of the grounding", said the company.
Laura Resti of Raja Ampat's homestay association said what occurred was "counterproductive" for their local tourism aspirations, as coral reefs mainly draw in the crowds visiting the national park.
The remote archipelago of Raja Ampat - which means Four Kingdoms in Indonesian - lies between the Pacific and Indian oceans.