INSA to sue Ministry of Transportation

INSA to sue Ministry of Transportation

Rendi A. Witular, The Jakarta Post, Jakarta

The Indonesian Shipowners Association (INSA) plans to take
legal action against the Ministry of Transportation for what it
calls the government's "disregard of violations to a shipping
regulation" by foreign-based shipping companies.

INSA chairman Barens Th. Saragih said the ministry had failed
to protect local shipping lines from potential losses caused by
foreign companies that refuse to operate Indonesian-registered
cargo vessels as required by the regulation.

"We will file a lawsuit with the state administrative court
against the Ministry of Transportation unless it takes stern
measures against violators," Barens said over the weekend.

Barens feared that the condition would squeeze local shipping
lines out of the business as overseas-registered shipping lines
takeover the transportation of goods into and out of the country.

He explained that under Government Regulation No. 82/1999 on
sea transportation, foreign shipping lines transporting goods in
and out of the country should be affiliated with a local agency
and own at least one vessel with a minimum weight of 5,000 gross
tons operating under the Indonesian flag.

However, many foreign-based companies are not ready to meet
the requirement and have asked the government for a grace period
to allow them to buy local-registered vessels.

The Ministry of Transportation agreed to postpone the
implementation of the regulation until Oct. 5 this year.

But when the second deadline expired, the foreign-based
shipping lines requested an extension, Barens said.

"The ministry must now uphold the regulation, as the extension
expired a week ago. Around 140 foreign-based agencies are still
unable to comply with the regulation and they should be
penalized," he said.

He explained that the companies were still using ships in
Indonesian waters that were registered and normally berthed in
other countries.

Officials from the Ministry of Transportation could not be
reached for comment.

Local shipping lines have faced various problems over the year
arising from unfavorable government policies that hurt the local
shipping industry.

So much so that local shipping lines currently account for
only 5.4 percent of the shipment of goods into and out of the
country. Foreign-owned ships transport the remaining 94.6 percent
of exported and imported goods, which reach 350 million tons
annually.

INSA has often called on the government to review its shipping
industry policy, warning that foreign shipping companies would
entirely control the industry in the near future unless there is
a change in policy.

However, the government has always turned a deaf ear to the
complaints.