Amid media reports that the Indonesian government has decided to delay implement a regulation which will require companies to use national carriers for exporting coal, the government has yet to issue a new regulation to revise it, Hendra Sinadia, executive director of the Indonesian Coal Mining Association, told CoalMint.
Last year, Indonesia’s Trade Ministry issued a regulation requiring coal and crude palm oil must be shipped overseas using national shipping companies, unless the local firms are unable to provide the vessels. The new regulation was supposed to be in effect in April. The regulation also applies for rice imports.
Kontan daily reported Oke Nurwan, director general of foreign trade at the Trade Ministry, as saying the government has decided to postpone implementing the regulation, but has yet to decide on the period for postponement.
“The government has yet to officially postpone it. There should be a new regulation to revise the previous one. Without it, then it’s not official. We have asked the government to clarify it,” Sinadia said.
Based on preliminary data compiled by ICMA from various sources, domestic carriers operate 139 vessels which can ship 4.6 MnT of coal monthly. That’s a fraction of Indonesia’s monthly coal exports of between 30-35 MnT.
Sinadia said the Indonesian National Shipowners’ Association (INSA) has yet to provide the exact number of vessels available for coal shipment.
A delay on the regulation would be a relief for miners in the world’s second exporters of the fuel, who rely on foreign-vessels to ship 95% of its coal shipments. Indonesian coal sellers normally ship coal under free-on-board basis, which let buyers to arrange for vessels and insurance.
Coal and palm oil are two Indonesia’s main non oil-and-gas exports. Indonesia’s coal exports rose by 5.13% to 389.38 MnT in 2017, from 370.31 MnT in 2016, according to data from Indonesia’s central bank, Bank Indonesia, on the website.
Carmelita Hartoto, the chairwoman of Indonesian National Ship-owners Association, quoted by the Jakarta Post as saying that the number and quality of local vessels had improved significantly since the government introduce the cabotage principle. The cabotage principle, applied in 2005, requires all vessels operating within Indonesian waters to be domestically owned.
While admitting that the existing fleet still could not accommodate all CPO and coal exports, the association believes local shipping firms will eventually be able to meet demand.
“Looking at the success of the cabotage principle, we are sure the need of vessels for export and import purposes will be met in stages and sustainably,” Hartoto said as quoted by The Jakarta Post.
According to data from INSA, national flagged vessels surged to 24,046 in 2016, from 6,041 in 2005. Shipping capacity rose to 38.5 Million gross tons, from 5.67 Million gross tons over the same period.
In 2016, foreign vessels accounted for 93.7% of the country’s exports and imports, The Jakarta Post reported.
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