European shipowners concerned at Indonesian cabotage ruling

European shipowners have joined protests from the International Chamber of Shipping (ICS) opposing a decree Indonesia adopted recently. The new law in Southeast Asia’s largest nation statesthat certain commodities can only be transported for import or export by national maritime transport companies. Commodities affected are coal, crude palm oil, rice and goods for government procurement.

“This new law is a clear measure of protectionism and will impact seriously European shipping companies that have longstanding access to this market. European shipowners also warn that it puts at risk the Indonesian’s business climate and confidence for foreign investors,” the European Community Shipowners’ Associations (ECSA) stated in a release on Monday.

Martin Dorsman, ECSA’s secretary general commented: “In a time when the EU and Indonesia are negotiating on a free trade agreement the adoption by the Indonesian authorities of such a law is unacceptable. In view of this week’s bilateral trade talks we have passed our concerns on to the European Commission and hope they will see a chance to question their Indonesian counterparts on this matter.”

Earlier this month, Peter Hinchliffe, the departing ICS secretary general, wrote an open letter to Indonesia’s minister of trade, Enggartiasto Lukita, in which he voiced similar concern.

“If our understanding is correct, this would appear to be a form of discriminatory cargo reservation, which would be contrary to accepted international practice and maritime free trade principles that are adhered to by Indonesia’s trading partners, including those in Asia,” Hinchliffe wrote.  Cargo reservation is also contrary to the obligations which Indonesia has accepted as a member of the World Trade Organization (WTO), he pointed out.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.


  1. It is unfortunate that the powers that be, do these things.
    Indonesia is not an easy market to deal with and restricting vessels coming into take out exports can only hurt them further.
    If the government think that this is an incentive to increase its fleet size then they are sorely mistaken, Indonesian shipping companies don’t like risk in an already risky business so I don’t know how or where they are going to get finance for purchasing or building new tonnage as the banks wont lend to them where it is not able to take a lien on the vessel in Indonesia, its only chance is outside the archipelago.

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