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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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 My saved default Read later Folders shared with you. 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. SSEK – 12th may Follow Please login to follow content.
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.
Under the previous regulation, the time period for the MOT to issue the permit was five working days. The impact of the enactment of Maritime Law No 17 of also required Indonesian shipping companies with foreign shareholders to own at least one self-propelled vessel of more cabotag gross tonnage. Register now for your free, tailored, daily legal newsfeed service.
Indonesia June 13 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. In Decemberthe current exemptions for jackups, semisubmersibles, deepwater drill ships, tender-assist and swamp bridge rigs will also expire.
However the Indonesian government later changed the rules to bring oil and gas companies activities under the law. 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. Article 8 of the Maritime Law No 17 of sets out the following principles: 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.
Cabotage Exemptions Under PMspecific types of foreign-flagged vessels operated in Indonesian waters for specific types of activities may be exempted from cabotage rules.
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. When caboage rules were first introduced, oil and gas companies did not see a threat as they expected the Rules to apply only to indohesia and goods.
The Panel has recommended the abolition…. Insight Cabotage and its impact in Indonesia. Login Register Follow on Twitter Search.
Under PMspecific types of foreign-flagged vessels operated in Acbotage waters for specific types of activities may be exempted from cabotage rules. If you would like to learn how Lexology can drive your content marketing strategy forward, please email enquiries lexology. With respect to the prioritisation of foreign-flagged vessels funded by financing companies, PM only requires a subsidiary of an Indonesian legal entity borrowing the money from a financing company to have a majority of its shares owned by Indonesians.
Holding parties to their bargain: 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 cabotagge cease exemptions when the local industry has improved upon its production capabilities.
The implementation of the Cabotage restrictions also paved the way for liberalization of port management and private sector participation in port development.
Cabotage and its impact in Indonesia : Clyde & Co (en)
Share Facebook Twitter Linked In. Regulation 82 had already been amended in April to postpone the implementation date from 1 May to 1 Augustfor the provisions relating to use cabotave domestic insurance, and to 1 Mayfor the provisions relating to use of domestic vessels.
It appears that Indonesia has recognised that further developments in both the shipping and insurance market will be required before the import and export industry of the targeted commodities can rely solely on domestic capability without having iindonesia negative economic impact on trade and profits.
The MOT shall approve the use of such vessels in Indonesian waters after taking into account the following:.
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. The MOT shall approve the use of such vessels in Indonesian waters after taking into account the following: Shipping Norway Italy Spain View more. indonessia
Indonesian Government revokes controversial cabotage legislation – Lexology
Please contact customerservices lexology. Conclusion It remains to be seen ibdonesia the Indonesian Indonssia will extend the exemption for foreign-flagged vessels beyond 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.
Exemptions for oil and gas survey vessels, offshore constructions vessels, dredging, cabotagr and underwater works expired in December 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.
Such possibility for extension did not exist under the previous regulation. 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. This is a shorter time period than under the previous regulation, which allowed for inndonesia submission of an application at the latest 14 working days before operation of the vessel.
Indonesian Government revokes controversial cabotage legislation
Under PMan IPKA is granted for a maximum cabotate 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.
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. The next indonesua was December for offshore construction vessels and dredging vessels. 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.
Attachment I to PM lists foreign-flagged vessels that can conduct drilling activities in Indonesia up to the end of December More changes to the coastal shipping regime in Australia.