Government requires coal export to use domestic ships
Thursday, December 14 2017 - 01:09 AM WIB
Petromindo|Lucky
Minister of Trade Enggartiasto Lukita has issued new Ministerial Regulation No 82/2017, which among others requires coal and palm oil export to use Indonesian flagged vessels, news portal kontan.co.id reported.
The regulation also requires exporters to use the services of domestic insurance companies.
Oke Nurwan, Director General of International Trade at the ministry, said that the new regulation, which was issued on October 26 will be effective starting April 26, 2018, is aimed at helping to bolster the competitiveness of the national shipping industry.
He added that there will be sanctions for exporters violating the new regulation including suspension and revocation of their licenses
Oke, however, said that if the capacity of the national shipping and insurance companies is deemed not yet sufficient to facilitate the export activities, the exporters can still use the services of the foreign firms.
Hendra Sinadia, Head of the Indonesian Coal Mining Association (ICMA), said that the new regulation could hamper the country?s coal export activities given the limited capacity of the domestic shipping industry. He said that the association had protested the new regulation when it was still being drafted.
He added that the country?s coal miners have been exporting coal using the free on board (FOB) scheme, under which the importers in the foreign destinations determine the vessels used in the shipment of the commodity.
Chairwoman of the Indonesia Ship Owners Association (INSA) Carmelita Hartoto welcomes the new regulation saying it would help accelerate the development of the domestic shipping industry. She said that the country?s export and import shipment has been dominated by foreign vessels.
She cited that in 2016, foreign vessels accounted for 93.7 percent of the country?s export and import shipment, while domestic ships only 6.4 percent. She claimed that domestic vessels have the capacity to serve the export of the countries key commodities. (*)