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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Insight Cabotage and its impact in Indonesia. Csbotage 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.

Such possibility for extension did not exist under the previous regulation. 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.

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Under the previous regulation, the time period for the MOT to issue the permit was five working days. The next deadline was December for offshore construction vessels and dredging vessels.

In Decemberthe current exemptions for jackups, semisubmersibles, deepwater drill ships, tender-assist and swamp bridge rigs will also expire. 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 cahotage than gross tonnage. 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 kndonesia rules were first introduced, oil and gas companies did not see a threat as they expected the Rules czbotage apply only to passengers and goods. The implementation of the Cabotage restrictions also paved the way for liberalization of port management and private sector participation in port development.

Share Facebook Twitter Linked In. Under PMan IPKA is granted for a maximum period of one year and may indonesiz 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.


Indonesia Extends Cabotage Exemption

It appears that Cabotahe 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 a negative economic impact on trade and profits.

This is a shorter time period than under the previous regulation, ineonesia allowed for the submission of an application at the latest 14 working days before operation of the vessel.

Article 8 of the Maritime Law No 17 of sets out the following principles: The MOT shall approve the use of such vessels in Indonesian waters after taking into account the following: Cabotage principles were implemented when the domestic shipping industry in Indonesia almost collapsed as a result of foreign vessels engaging in coastwise transportation.

Under PMspecific types of foreign-flagged vessels operated in Indonesian waters for specific types of activities may be exempted from cabotage rules.

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.

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. My saved default Read later Folders shared with you.

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. Indonesia June 13 Please contact customerservices lexology. See more Legal Updates.

If you would like to learn how Lexology can drive your content marketing strategy forward, please email enquiries lexology. Exemptions for oil and gas survey vessels, offshore constructions vessels, dredging, salvaging and underwater works expired in December The Panel has recommended the abolition….


Indonesia pulls cabotage rule on key commodities transport

However the Indonesian government later changed the rules to bring oil and gas companies activities under the law. 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 indonnesia short and yet strict enough to cease exemptions when the local industry has improved upon its production capabilities.

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. SSEK – 12th may Login Register Follow on Twitter Search.

The first deadline was December for two types of offshore support vessels: It remains to be seen whether the Indonesian Government will extend the exemption for foreign-flagged vessels beyond It was done to encourage Indonesia’s shipbuilding industry to grow and protect member of companies of the Indonesian Shipowners Association.

Following pressure from various stakeholders, the Indonesian government has revoked Ministry of Trade Regulation No. Register now for your free, tailored, daily legal newsfeed service.

Industry players did not view the amendments cabotqge 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. 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 inonesia of which was aimed at providing business opportunities and greater market share to Indonesian companies.