Cabotage Law to Impact Business Climate: ECSA Warns Indonesia

(Image Courtesy: Team Tankers)

The European Community Shipowners’ Association has expressed concerns on the new law in Indonesia which reserves cargo for the island nation’s own vessels. The ECSA has warned that the Cabotage law puts at risk the Indonesian’s business climate and confidence for foreign investors.

Opposing Indonesia’s decree Indonesia which was adopted recently, the ECSA on Monday said that the law is a clear measure of “protectionism” which will have a serious impact on European shipping companies that have longstanding access to this market.

The new law imposes that 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.

ECSA’s Secretary General Martin Dorsman said, “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.”

Sea News, February 21