ITF urges improvements in local shipping industry

Ridwan Max Sijabat, The Jakarta Post/Jakarta

The International Transport Federation (ITF) has urged the government to fully enforce Presidential Regulation No. 5/2005, which applies cabotage in Indonesian waters, as part of a campaign to have domestic shipowners register their vessels with the Ministry of Transportation and improve conditions for the more than 80,000 workers in the shipping industry.

ITF executive John Wood said the federation was deeply concerned over the lack of attention from the government, considering that the country relied for a large part of its freight transportation on the shipping sector.

"The government has the potential to lose billions of dollars in taxes from domestic vessels annually. Thousands of seafarers are poorly paid due to weak law enforcement as most ships, especially above 2,000-ton cargo vessels belonging to Indonesian businessmen, still use flags of convenience (FOC)," he told The Jakarta Post after launching the campaign on Friday.

Wood said most shipowners have registered their vessels in foreign countries such as Liberia, Honduras, Panama and Greece in an attempt to avoid taxes. Many also prefer to employ foreigners rather than Indonesian seamen.

Presidential Regulation No. 5/2005, which was issued in March, stipulates that the country's exports and imports have to be transported by domestic shipping firms in an attempt to protect the domestic shipping industry and to improve labor conditions.

At the moment, only 6,500 vessels, including fishing vessels, are registered with the transportation ministry, and their workers are paid below minimum wage levels.

Simon des Baux, ITF representative in Tokyo, said Indonesia should learn from Japan which had long applied cabotage so as to increase the country's tax revenue from the shipping industry and improve labor conditions in the sector.

"The government should also take resolute action against corrupt officials and against FOC vessels that generally neglect the ILO conventions on minimum wages, insurance schemes and the marine environment," he said, adding that the Japanese authorities did not allow FOC Japanese vessels to transport Japanese exports and imports, and also prosecuted ships that violated ILO conventions or polluted the marine environment.

Meanwhile, the Indonesian Seafarers Association (KPI) said it would make regular visits to domestic vessels in all major ports to check on labor conditions and campaign for the use of national flags.

"The KPI will report domestic vessels violating the regulation to the ministry and bring lawsuits against vessels failing to comply with core labor standards, including insurance requirements," said Hanafie Rustandi, chairman of the KPI.

He also said the KPI and ITF would hold talks with the Indonesian National Shipowners Association (INSA) and port authorities nationwide to ensure that the necessary measures were taken to force all domestic vessels to use the national flag.