The business community on Wednesday praised the newly endorsed shipping bill, saying it would improve export and import activities and give private sector players more opportunities to engage in port and shipping businesses.
The Indonesian Chamber of Commerce and Industry (Kadin)'s deputy chairman for transportation, Chris Kanter, told The Jakarta Post on Wednesday the bill would make port operations more efficient after years of inefficiency.
"Ports are essential in supporting the national economy. The approved bill ends the monopoly of state-owned port operator PT Pelindo (I until IV)."
"Competition will force Pelindo to be efficient in serving exporters and importers or risk losing customers," said Chris.
The healthy competition, he said, would encourage more investors to come to the country.
On Tuesday, the House of Representatives endorsed the shipping bill, after three years of deliberation, allowing foreign and domestic private entities to operate ports here on equal footing with state companies.
Pelindo's monopoly has been blamed by stakeholders as the main cause of the country's poor port management, leading to a high-cost economy in the transportation chain.
The bill gives Pelindo three years to prepare for the open competition.
Chris also highlighted the need for the government to prepare further regulations based on the bill after meticulous consideration, to avoid potential problems or disputes.
"There should also be an intense public campaign explaining the contents of the bill, especially to port workers, so that stakeholders understand entirely," he said.
The bill contains 22 chapters and 355 articles, with eight new chapters regulating, among other things, mortgages and loans, maritime safety and security, harbor masters and the establishment of a sea and coast guard.
Under the bill, the government is required to draft regulations on water transportation, multi-mode transportation, seaport management, navigation systems, the welfare of shipping crews and passenger safety.
Other regulations, including on maritime environment protection, shipping accidents and inspection are also required for the bill's implementation.
"The purpose of the bill is to make our ports more efficient. And for us, it doesn't matter who the operators are as long as they can cooperate and perform well," chairman of the Indonesian National Shipowners Association (INSA), Oentoro Suryo, said.
The bill also regulates the "cabotage principle", which allows only locally flagged vessels to ship domestic cargo between ports in Indonesian waters.
"Although this principle is no longer popular globally, we still need it to protect the interests of the local shipping industry from larger foreign firms," Oentoro said, adding that as an archipelago, Indonesia needed the principle.
Meanwhile, after reconsidering plans to stage a strike at the country's 112 ports, Pelindo workers have decided to file a judicial review with the Constitutional Court over the bill, which they say is too liberal and "pro-foreigners".
Eyebox Some key articles in the shipping bill
1. Article 8 (cabotage principle): Activities in domestic sea transportation by national flag vessels. Point 1: Foreign vessels are prohibited from transporting passengers and cargo between islands and ports in Indonesian waters.
2. Article 60 (on mortgages): A more detailed regulation than Article 49 of the 1992 law on shipping, the article includes provisions for using vessels as collateral.
3. Article 81: Port managers comprise port authorities for commercial ports, and a port operator for noncommercial use.
4. Article 207: A regulation calling for the presence of a harbor master as a government official who is appointed by a minister and has the highest authority over a port.
5. Article 276: The establishment of a sea and coast guard, an institution set up for supervision and law enforcement at sea and along coasts.
6. Article 344, Point 3: (Pelindo) will remain managing existing activities at ports already under its management.