RI's shipping industry too protective: Greek shipowners

Ridwan Max Sijabat, The Jakarta Post, Jakarta

The Greek Shipowners Association (GSA) has urged the Indonesian government to review its policies for the shipping industry, and reduce the high costs of doing business here in order to encourage foreign investors to put their money into the sector.

"Many Greek shipping tycoons backed up by major international financial institutions are interested in investing in Indonesia but they find the shipping industry here unattractive to foreign investment," Georgios E. Katsimpiris, an executive of the Greek Shipowners Association, said following a closed-door meeting with a number of executives of the Indonesian National Shipowners Association (INSA) here on Monday.

Katsimpiris criticized Presidential Instruction No. 5/2005 on the revitalization of the domestic shipping industry, which he said was excessively protective for local shipping firms.

"To make the domestic shipping industry more competitive, Indonesia needs to open its domestic shipping market to foreign shipping firms," he said.

This presidential instruction, which applies the cabotage principal, stipulates that domestic cargoes must be shipped by domestic vessels, and that foreign investors are allowed to own a maximum of 49 percent of the shares in a local partner.

Katsimpiris said foreign investors should be allowed to own more than 50 percent of the shares to ensure the security of and control over their investments.

"We come here not to donate but to make money and benefit Indonesia because we pay taxes and employ Indonesian seafarers. We have many vessels but no seamen," he said, adding that similar investment policies has been adopted by developed countries such as Britain, the Netherlands, the United States, Japan and South Korea.

Besides reviewing its protectionist policies, he said that the government should also simplify investment procedures, eliminate corruption in the country's ports and enhance security in its waters.

"Indonesia has more than 1,000 shipping firms but most use flags of convenience from Liberia, Greece, Panama and Malta in order to avoid the high-cost economy caused by a corrupt bureaucracy and complicated administrative procedures in almost all seaports," he said

He added that the busy Malacca Strait was quite prone to piracy.

Meanwhile, International Transport Federation (ITF) representative Hanafie Rustandi said the presence of foreign shipping firms in Indonesia would certainly help the country's economic growth, especially in the export sector, and create employment opportunities for Indonesian workers.

"This would open Indonesia's eyes amid the tight international competition and encourage domestic shipping companies to improve their professionalism. The entrance of foreign competitors in all sectors is unavoidable in the global market.

"And this would, in turn, force Indonesian seafarers to improve their skills so as to allow them to compete with skilled seafarers from the Philippines, Thailand, South Korea, Taiwan and Africa."