The small boat was carrying 17 passengers from the port city of Tanjung Pinang in Riau Islands province east of Sumatra when it encountered bad weather, navy spokesperson Edi Sucipto told AFP.
"Twelve people have been found, but ten had already passed away," he said, adding the two injured were in critical condition. A navy speedboat was still searching for the five still missing, Sucipto added.
Twelve missing after boat capsizes in Indonesia's Papua
The stricken vessel was only a small craft equipped with an outboard motor, he said. The journey was supposed to take around an hour.
The Indonesian archipelago of more than 17,000 islands is heavily dependent on boat transport, but fatal accidents are common.
More than 60 people died in December when huge waves capsized a ferry charting a course through Sulawesi province.
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