Minister decree obligated exporters to use local vessels

Minister decree obligated exporters to use local vessels
Minister decree obligated exporters to use local vessels

The Ministry of Trade has imposed a beleid on the national ship’s obligation to export coal and CPO to seize import logistics costs worth Rp2,400 trillion per year, which has been mostly enjoyed by foreign vessels.

JAKARTA (infolog): Director General of Foreign Trade of the Ministry of Trade, Oke Nurwan said Regulation of the Minister of Trade No. 82 of 2017 on Terms of Use of Sea Transport and National Insurance for Export and Import of Certain Goods requires exporters and shipbuilders to prepare themselves. This rule will take effect from 1 May 2018.

“The Indonesian Shipping Association (INSA) should prepare its shipping and exporters must also prepare to use the national vessels,” he told recently as quoted as saying.

According to Oke, the regulation is applied gradually and starts with two commodities controlled by Indonesia namely CPO and coal. The reason, the commodity has been a mainstay of exports.

As for the requirement of CPO transportation, export process must use ship with food grade specification.

In addition, the ship owner will adjust the vessel as per the requirements of the destination country or international standard and provide a competitive rate with foreign ships.

With regard to contracts between exporters and ongoing foreign vessels, he explained that business to business (B2B) activities can be re-established if there is a state policy to be followed.

“If it is not arranged like this, no one will prepare. Shipbuilders will not prepare their ships, nor will exporters use national vessels, so the huge logistics costs will never be enjoyed by the national industry, “he said.

However, the Trade Ministry signals still allow the use of foreign ships provided that the available national vessels have fully transported the two commodities.

If the capacity of the national ship is not able to transport the CPO and coal completely, then exporters are allowed to use foreign ships.

Currently, about 90% more export vessels in Indonesia are controlled by foreigners and only the remaining 10% are national vessels.

For those who do not follow the rules, then the sanctions can be either freezing permit or even revocation of permit.

However, the sanctions will still be discussed again in line with the readiness of ship owners and exporters. (ac)

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