Following pressure from various stakeholders, the Indonesian government has revoked Ministry of Trade Regulation No. 82/ on the. Indonesia is an archipelago country comprises more than islands. It is located in the crossroad between the Asia and Australia continent and between. Cabotage in Indonesia. Cabotage in South-East Asia. Laws to restrict the operation of ships between South-East Asian ports were introduced to promote.

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Register now for your free, tailored, daily legal newsfeed service. Login Register Follow on Twitter Search. Widespread concern remained that the Indonesian shipping industry and insurance market was not in a position to service the demands which would be created by Regulation 82, in particular that the insurance products on offer would not be acceptable to global importers and exporters and that there would not be enough capacity in domestic vessels.

The Indonesian government implemented the Cabotage restrictions and Indonesia’s shipping and offshore marine industry underwent major changes since the introduction of the Maritime Law No 17 of which was aimed at providing business opportunities and greater market share to Indonesian companies.

The first deadline was December for two types of offshore support vessels: Article 8 of the Maritime Law No 17 of sets out the following principles: Under PMspecific types of foreign-flagged vessels operated in Indonesian waters for specific types of activities may be exempted from cabotage rules. In Decemberthe current exemptions for jackups, semisubmersibles, deepwater drill ships, tender-assist and swamp bridge rigs will also expire.

Cabotage and its impact in Indonesia : Clyde & Co (en)

Holding parties to their bargain: With respect to the prioritisation of foreign-flagged vessels funded by financing companies, PM only requires a subsidiary of an Indonesian legal cahotage borrowing the money from a financing company to have a majority of its shares owned by Indonesians.

Following pressure from various stakeholders, the Indonesian government has revoked Cabotagr of Trade Regulation Cavotage. Shipping Norway Italy Spain View more. The Indonesian Shipping Law and its implementing regulations contain Indonesia’s cabotage rules, requiring that domestic sea transportation be carried out by an Indonesian shipping company using an Indonesian-flagged vessel and an Indonesian crew. As long as Indonesian-flagged vessels are not yet available for specific activities such as oil and gas drilling, however, it is likely that the Indonesian Government will extend the exemption.

Cabotage is the principle regulating shipping activities which takes place within a country’s waters and recognises that a country is entitled to restrict the activities of foreign vessels operating within its waters. Under PMan IPKA is granted for a maximum period of one year and may be extended with a recommendation from the Evaluation Team, if the applicant has exhausted all efforts concerning the procurement of an Indonesian-flagged vessel and provides proof of its latest procurement or tender offer.


It appears that Indonesia has recognised that further developments in both the shipping and insurance market will be required before the import and ineonesia industry of the targeted commodities can rely solely on domestic capability without having a negative economic impact on trade and profits.

More changes to the coastal shipping regime in Australia. This is a shorter time period than under the previous regulation, which allowed for the submission of an application at the latest 14 working days before operation of the vessel. It is also a requirement that all vessels operating in Indonesian waters to observe the Cabotage principles whether or not they are engaged in domestic sea transportation activities.

The MOT shall approve the use of such vessels in Indonesian waters after taking into account the following:. These provisions are broadly interpreted to cover most vessels, including different types of vessels operating in Indonesian waters that are not engaged in domestic sea transportation.

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Share Facebook Twitter Linked In. Under the previous regulation, the time period for the MOT to issue the permit was five working days. Please contact customerservices lexology. Cabotage Exemptions Under PMspecific types of foreign-flagged vessels operated in Indonesian waters for specific types of activities may be exempted from cabotage rules.

The implementation of the Cabotage restrictions also paved the way for liberalization of port management and private sector participation in port development. With the lack of Indonesian vessels capable of servicing the needs of the oil and gas sectors, exemption tables were created in in order to avert production losses. Such possibility for extension did not exist under the previous regulation.

Exemptions for oil and gas survey vessels, offshore constructions vessels, dredging, salvaging and underwater works expired in December With the implementation of the Cabotage rules, the Indonesian shipbuilding industry is now able to construct 19 types of offshore vessels with its growing local expertise.

Follow Please login to follow content. Attachment I to PM lists foreign-flagged vessels that can conduct drilling activities in Indonesia up to the end of December The Panel has recommended the abolition…. See more Legal Updates. Cabotage principles were implemented when the domestic shipping industry in Indonesia almost collapsed as a result of foreign vessels engaging in coastwise transportation.


It remains to be seen whether the Indonesian Government will extend the exemption for foreign-flagged vessels beyond This policy clearly has had success in encouraging the development of the Indonesian shipbuilding industry but what remain to be seen are the capabilities of Indonesia’s shipbuilding industry after December The MOT shall approve the use of such vessels in Indonesian waters after taking into account the following: Industry players did not view the amendments as going far enough to clarify certain ambiguities in Regulation 82 or to address the risks to the import and export industry posed by the requirements.

If you would like to learn how Lexology can drive your content marketing strategy forward, please email enquiries lexology. It was done to encourage Indonesia’s shipbuilding industry to grow and protect member of companies of the Indonesian Shipowners Association.

When the rules were first introduced, oil and gas companies did not see a threat as they indonfsia the Rules to apply only to passengers cabotae goods. PM changes the time period and process for the application for and issuance of an IPKA, and the supporting documents that must be submitted with the IPKA application. SSEK – 12th may The impact of the enactment of Maritime Law No indonesja of also required Indonesian shipping companies with foreign shareholders to own at least one self-propelled vessel of more than gross tonnage.

Cabotage policies are particularly significant for the oil and gas industry especially where the oil and gas fields are located offshore but still within a country’s territorial waters.

However the Indonesian government later changed the rules to bring oil and gas companies activities under the law. The next deadline was December for offshore construction vessels and dredging vessels. Indonesia June 13 The Indonesian amendment to its Cabotage principles is seen and can be interpreted as a measured strategy; one which is flexible enough to allow for a relaxation in deadline if domestic supply of offshore vessels fall short and yet strict enough to cease exemptions when the local industry has improved upon its production capabilities.

Regulation 82 had already been amended in April to postpone the implementation date from 1 May to 1 Augustfor the provisions relating to use of domestic insurance, and to 1 Mayfor the provisions relating to use of indonezia vessels.