The government of Indonesia has recently issued new shipping regulation for coal export, the Ministry of Trade Regulation No 40/2020, which will be implemented starting May 1, 2020. The new regulation obliges coal exporters to utilize national vessel with capacity up to 15,000 DWT provided by national shipping companies.
Ministry of Trade Regulation No 40/2020 regarding Utilizing Indonesian-Flagged Vessels and National Insurance for Exporting and Importing of Specific Goods, therefore, annuls Ministry of Trade Regulation No 82/2017.
“The Minister Regulation is effective starting on May 1, 2020”, the regulation, which was promulgated on April 8, 2020, stated.
Based on the new regulation, Indonesian-flagged vessels are defined as vessels that are either owned or chartered by national shipping companies either in terms of bare boat, time charter, voyage charter, contract of affreightment or other vessel contracts. The term of the chartering is explicitly regulated in Article 1 Clause 5 of the new regulation, which was not regulated in the previous regulation.
The provision related to the obligation to utilize Indonesian-flagged vessels with capacity up to 15,000 DWT is also explicitly stated in the Article 3, which was not stated in the previous regulation.
The Indonesia Coal Mining Association (ICMA) has repeatedly called for certainty and clarity of this regulation since any uncertainty would cause coal export disruption.
Based on compiled data by ICMA from the Ministry of Transportation, there were 7,645 coal export-bound shipments in 2018, but national shipping companies only had miniscule contribution to the total market share.
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