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.