The Shipping Law Review: Indonesia

Commercial overview of the shipping industry

In recent years, the Indonesian government has aimed to transform Indonesia into a global maritime axis. To realise this objective, the government has begun improving inter-island connectivity and upgrading port infranstructure within the archipelagic country, which spans over 6 million square kilometres and consists of over 17,000 islands.2

Since 2014, the Indonesian government has launched the Indonesian Sea Tollway Ports, which involve 24 strategic ports and 18 routes, connecting west to east Indonesia.

Relevant information of the Indonesian shipping industry is as follows:

  1. the capacity of the national-flagged fleet is approximately 25,114,000 deadweight tonnage (DWT) with approximately 10,282 ships, of which most are passenger ships and roll-on or roll-off ships, among other smaller types, followed by general cargo ships, oil tankers, container ships and bulk carriers;
  2. merchandise trade reaches approximately US$39,409 million;
  3. container port throughput reaches approximately 14,025,449 twenty-foot equivalent units (TEUs);
  4. the majority of goods that are exported are manufactured goods, followed by food items, fuels, ores and metals, and agricultural raw materials. The top five export partners in 2020 were China, the United States, Japan, Singapore and India; and
  5. in 2020, ship building in Indonesia consisted of 0,06 per cent of global shipbuilding, which is approximately 36,388 gross tonnage (GT).3

General overview of the legislative framework

i General principles of law

Indonesia is a civil law jurisdiction, which inherited the civil law system from its former colonial master, the Netherlands. Statutory law is the primary source of law.

ii Legislative framework for shipping

The Indonesian Commercial Code (Wetboek van Koophandel voor Indonesie, Staatsblad 1847:23 or the Commercial Code) regulates mostly the basic carriage of goods through sea transportation, including issues related to, inter alia, marine casualty, cargo claims and passenger claims.

The main regulation on shipping was first enacted on 17 September 1994 through Law No. 21 of 1994 on Shipping. Subsequently, it was revoked by Law No. 17 of 2008 on Shipping and was last amended by Law No. 11 of 2021 on Job Creation (the Shipping Law). Various implementing regulations of the Shipping Law have been issued in the form of, inter alia, a government regulation, presidential regulation and ministry of transportation regulation or circular letter.

Forum and jurisdiction

i Courts

Overview of shipping disputes litigation

There is no specialised court in Indonesia in which shipping disputes are litigated. All shipping disputes are submitted to and examined by the relevant district court.

Indonesia has a maritime court with limited authority. For example, to carry out further examination of the investigation results issued by the Directorate General of Sea and Transportation (DGST) and to determine whether the master or crew of the related ship has breached the regulation regarding the code of ethics and seaman competency.

Jurisdictional and choice of law issues

Most shipping disputes that arise from contractual performance often contain the choice of foreign jurisdiction. If the parties agree that foreign jurisdiction should apply, the Indonesian District Court has been very consistent in its decision that it has no jurisdiction or competence to examine, adjudicate and decide the case.

If the parties do not choose a jurisdiction, the Indonesian Civil Procedural Law (the Civil Procedural Law) provides the jurisdiction applicable for the claim to be examined by a certain district court:

  1. the district court where the defendant is domiciled; or
  2. if the defendant's domicile is unknown, the claim will be submitted to the district court where the plaintiff is domicile.

Specifically, in cases of vessel collision, if the parties have not chosen a specific jurisdiction, Article 543 of the Commercial Code provides the following jurisdiction of Indonesian courts:

  1. before the judge where the defendant is domiciled or at one of the defendant's domicile if there are several defendants;
  2. before the judge who has legal jurisdiction over the location of the collision;
  3. before the judge who has legal jurisdiction over the registration of the defendant's ship, as registered in the ship registry; and
  4. before the judge whose legal jurisdiction over the ship seizure is conducted.

In principle, Indonesian courts may recognise a choice of foreign law in shipping contracts. However, despite the stipulated (foreign) governing law of contract, in practice, Indonesian judges tend to apply Indonesian law as the law for all substantive and procedural matters when examining case in Indonesian courts.

Limitation period

The following time limits apply:

  1. a time limit of one year for cargo claim, pursuant to Article 487 in conjunction with Article 741 of Indonesian Commercial Code; and
  2. a time limit of two years for all legal claims regarding compensation for the damage caused by the collision.

ii Arbitration and ADR

Maritime arbitration in Indonesia

To date, Indonesia has neither a dedicated maritime arbitration institute nor arbitration law specifically tailored for maritime arbitration.

Alternative dispute resolution

In addition to arbitration, disputing parties can opt for other forms of alternative dispute resolution forum, depending on the circumstance.

Notably, pursuant to Supreme Court Regulation No. 1 of 2016 on Court-annexed Mediation Procedure (SCR 1/2016), the disputing parties who have proceeded with the litigation process within the Indonesian courts are obliged to attempt to resolve the dispute in question through a court-annexed mediation. The court-annexed mediation shall be conducted for 30 days from the date of the court order for the commencement of mediation and may be extended for an additional 30 days if the parties agree.

iii Enforcement of foreign judgments and arbitral awards

Indonesia has not ratified any bilateral agreement that allows for recognition and enforcement of foreign judgments. Consequently, any judgment rendered by a foreign court would require the enforcing party to initiate a new proceeding in a competent court in Indonesia.

However, maritime disputes that are resolved through foreign arbitration benefit from the Convention on Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention), which has been ratified by Indonesia through the promulgation of Presidential Decree No. 34 of 1981. The recognition and enforcement of foreign arbitral awards, including those related to maritime disputes, therefore adhere to the procedure set forth in Law No. 30 of 1999 on Arbitration and Alternative Dispute Resolution (the Arbitration Law).

Pursuant to the Arbitration Law, to enforce the international arbitral award in Indonesia, registration of the award through an Indonesian court (i.e., the Central Jakarta District Court – the CJDC) is required. Upon successful registration, the award creditor may submit an ex parte application for the issuance of an execution order (exequatur) from that court. The arbitral award shall be deemed as duly recognised and enforceable in Indonesia upon issuance of the exequatur.

Although there is no particularly notable recent enforcement record in terms of maritime arbitral awards, there has been one on the obstruction of enforcement (in Indonesia) of an arbitral award issued in arbitration and administered by the Tokyo Maritime Arbitration Commission (TOMAC). In that case, the CJDC's Chairman refused to issue the court reprimand against the debtor (even though the award had obtained exequatur from the CJDC). The Chairman was of the view that in light of the debtor's ongoing insolvency proceeding, the creditor should have participated in the insolvency proceeding instead of enforcing the arbitration award separately.

Shipping contracts

i Shipbuilding

The price of ships in Indonesia has reached US$1,900 per tonne.4 This relatively high cost (e.g., as compared to the price of a ship in China – US$1,200 per tonne) owing to a complex distribution network (for ship components) resulted in a price increase of ship components.

The issuance of Law No. 11 of 2020 regarding Job Creation (the Job Creation Law) was expected to improve performance of the Indonesian shipbuilding industry. However, the Job Creation Law in fact provided less of a solution to the complex distribution network for ship components.

The Job Creation Law amended several articles under the Shipping Law, namely:

  1. all ship procurement, building and manufacturing should be in accordance with international safety standards (previously only in accordance with vessel safety requirements); and
  2. the ship design validation system is to be conducted by the centralised licensing system (previously validated by the ministry of transportation).5

Pursuant to Minister of Transportation Regulation No. 39 of 2017 on Registration and Nationality of the Vessel (MOTR 39/2017), ownership of a ship being built within Indonesian territory or abroad can be registered temporarily in Indonesia through a temporary ship registration certificate.

The shipping industry in Indonesia has recently been heavily impacted by the covid-19 pandemic.6 Nevertheless, in 2021 and 2022, some Indonesian shipbuilders have successfully built war vessels, namely, KRI Teluk Palu – 523, KRI Golok and KRI Pollux – 935, for the Indonesian Navy.7

ii Contracts of carriage

Key legislation that is applicable to contracts of carriage is mainly regulated under the Commercial Code and the Shipping Law. Indonesia is not a party to the Hague, Hague-Visby, Hamburg or Rotterdam Rules.

iii Cargo claims

Article 468, Paragraph (2) of the Commercial Code provides that a carrier shall be liable to compensate any damages arising out of its failure to deliver the cargo, either partially or entirely, or any damage to the related cargo, unless the carrier can establish that the damage or non-delivery of cargo was caused by an unforeseeable event beyond the control of the carrier, due to its nature, circumstances or due to a defect of goods, or the fault of the shipper. The provisions related to the carrier's responsibilities for the loss or damage of cargo are stipulated under Articles 40 to 42 of the Shipping Law.

In practice, the shipper, the consignee, the lawful holder of the bill of lading, the cargo owner or the cargo insurer (by subrogation) is entitled to bring cargo claims against the carrier for loss or damages arising out of the carrier's alleged default.

Article 466 of the Commercial Code provides the definition of 'carrier' as the person who is bound to provide full or partial services under the time charter, the voyage charter or other agreements for transporting goods by sea. Indonesian courts may identify the carrier as the shipowner, the party who issued the bill of lading, by reference to the letterhead of the bill of lading, or to whom the charter is paid. The demise clause or identity of carrier clause is not widely known in Indonesia.

Any relevant provisions in the charter party can be incorporated into the bill of lading. However, the charter party and the bill of lading must be duly executed by the contracting parties.

iv Limitation of liability

Indonesia has not ratified the International Convention relating to the Limitation of Liability of Owners of Sea-Going Ships 1957 (including 1979 Protocol Amending the Convention) and the International Convention on Limitation of Liability for Maritime Claims 1976 (including 1996 Protocol to Amend the Convention).

Carrier's limitation of liability

The Commercial Code recognises the following carrier limitation of liabilities:

  1. the carrier is allowed to affix a certain number of limitations or package limitation of liability if the cost of the package is less than 600 Dutch East Indies Guilder, as stipulated under Article 470, Paragraph (2) of the Commercial Code;
  2. for collisions, Article 541 of the Commercial Code provides limitation of liability up to the amount of 50 Dutch East Indies Guilder per cubic metre of the net tonnage of the vessel, plus, for mechanically propelled vessels, the amount that was deducted to determine that tonnage from the GT for the space occupied by the means of the propulsion; and
  3. Article 474 of the Commercial Code stipulates the tonnage limitation of liability to be 50 Dutch East Indies Guilder per cubic metre, plus, for mechanically propelled vessels, the amount that was deducted to determine that tonnage from the GT for the space occupied by the means of the propulsion.

The Commercial Code has never been developed or modernised after Indonesia's independence in 1945. There is no clear guidance on how Indonesian courts should interpret how the liability amount of 50 or 600 Dutch East Indies Guilder should be applied at the present time. However, several court decisions have made reference to the gold price in determining the amount of compensation.

Limitation of liability for collisions

In addition to the above, the Commercial Code regulates the following limitation of liability for collisions:

  1. if the collision is accidental, if it is caused by force majeure or if the cause of the collision is uncertain, the damages are borne by those who have suffered them (Article 535);
  2. if the collision is caused by the fault of one of the vessels, liability to make good the damages attaches to the one who has committed the fault (Article 536); and
  3. if two or more vessels are at fault in the collision, the liability of each vessel is in proportion to the degree of fault that is committed (Article 537).

Remedies

i Ship arrest

Indonesia has not ratified any of the international conventions on the arrest of ships, including the International Convention on the Arrest of Ships (Geneva 1999).

Under Article 222 of the Shipping Law, a ship may be arrested if the ship is involved in a criminal investigation or civil claim. The Shipping Law provides discretionary authority to a competent court to issue a vessel's warrant of arrest, being the object of maritime claims, without needing to undergo a normal civil proceeding. Currently, there are no detailed procedures for the issuance of a warrant of arrest.

Owing to the lack of implementing regulation on the arrest of a vessel, a claimant pursuing the arrest generally needs to make a formal application to the competent court (where the vessel is lying, moored or at anchor) for a Conservatory Attachment Order/CA Order, and such an application may be incorporated in, or filed together with, a statement of claim.

In addition to the above, a claimant often lodges a criminal report to the police to put pressure on the debtor to settle its debt. The police may seize the vessel if the police believe that the vessel can be used for evidentiary purposes in investigation, prosecution and adjudication.

Furthermore, the General Regulation for the Ports and Waters of the Shipping in Indonesia of 1925 (Port Regulation 1925) stipulates that the harbour master may oblige the master of the vessel (if he or she caused such damage) to provide compensation or security for compensation in relation to the damage, and the harbour master may only grant or provide port clearance after the master of the vessel has fulfilled his or her obligation pursuant to Port Regulation 1925.

In light of the above, in practice, the harbour master may delay the issuance of port clearance of the vessel that caused damage to the vessel or asset if the harbour master is of the view that there is no compensation or security for the compensation of the damage being provided.

Sister ship and associated arrests

Arrest of a ship in Indonesian jurisdiction can only be executed upon the ship that is an object of civil or criminal proceedings, or deemed to have outstanding obligation by the harbour master. Therefore, a sister ship cannot be enforced or be arrested.

Wrongful arrest claims

The Shipping Law is silent on any provisions in relation to wrongful arrest.

Nonetheless, if the grounds for or conduct of a CA Order upon the vessel under the statement of claim or civil claim is not in accordance with the prevailing laws, then one may argue that the vessel's arrest is unlawful or wrongful arrest.

From a criminal law perspective, a pretrial application or a writ of habeas corpus may be submitted against the confiscation or seizure by the police (based on the grounds stipulated under Article 77 of the Indonesian Criminal Procedural Code).

Arrest by helicopter

The Shipping Law is silent on vessel arrest by helicopter.

Bunker arrest claims

The elucidation of Article 223 of the Shipping Law lists cost-related bunkering activities as one of the legitimate bases for a maritime claim. However, due to lack of implementing regulation, the bunker supplier claimant needs to undergo a normal civil proceeding (wherein the contractual relationship between the shipowners and the bunker supplier must be proved), but it does not give rise to any maritime lien.

ii Court orders for the sale of a vessel

The judicial sale of a vessel is recognised as a form of execution or enforcement of a final and binding court decision. If the losing party refuses to voluntarily comply with the court decision, then the winning party should submit a petition for execution of decision.

Notification of Judicial Sale

Pursuant to Article 55, Paragraph (1) of Minister of Finance Regulation No. 213/PMK.06/2020 on Auction Implementation Guidelines (MOFR 213/2020), the public auction for immoveable objects or immoveable objects that will be sold together with moveable objects will be announced by the Auction Office twice:

  1. the first announcement is to be made in a flyer, electronic media, or newspaper; and
  2. the second announcement must be made in a newspaper 15 days after the first announcement and, at the latest, 14 days before the date of the auction.

Judicial Sale Proceedings

Indonesian law is silent on how many public auction rounds may take place. During the process, the prospective bidder does not have to make an appearance in the judicial sale proceeding with an attorney. In order to participate, participants of an auction must provide guarantee in the form of a guarantee fee or bank guarantee, and a taxpayer identification number.

Regulation

i Safety

Indonesia has incorporated the numbers of International Maritime Organization (IMO) conventions into its own legislative framework, inter alia:

  1. the Convention on the International Regulations for Preventing Collisions at Sea 1972 (COLREGs);
  2. the International Convention for the Safety of Life at Sea 1974 (SOLAS);
  3. the International Convention for the Prevention of Pollution from Ships 1973 (MARPOL) and the Protocol of 1978 relating to the International Convention for the Prevention of Pollution from Ships 1973;
  4. the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers 1978 (the STCW Convention); and
  5. Maritime Labour Convention 2006 (MLC).8

ii Port state control

Relevant regulations

The Indonesian government has executed and ratified the Asia-Pacific Region dated 1 December 1993 (Tokyo MOU) on 1 December 1993, which then came into force on 1 April 1994.

In consideration of the MOU and to comply with several conventions that have been ratified by the Indonesian government,9 the DGST has issued Regulation No. HK.103/1/9/DJPL-18 regarding the Implementation of Safety and Seaworthiness of Foreign Vessel Inspection (DGST Regulation 103/2018), which was implemented from Ministry of Transportation Regulation No. PM 119 of 2017 regarding Port State Control Officer (PSCO) of Safety and Seaworthiness of Foreign Vessel (MOTR 119/2017).

Port state control officer – authorities and appointment

DGST Regulation 103/2018 defines PSCO as an official or officer at DGST who has the obligation to supervise the safety and seaworthiness of foreign vessels in accordance with the conventions' regulation. The authority of PSCO is delegated from the harbour master.

MOTR 119/2017 and DGST Regulation 103/2018 regulate that a PSCO has the authority to supervise and conduct inspection over any type of foreign vessel at any port in Indonesia.

The most recent publication of detaining ships by the PSCO was on 19 May 2020, where vessel MV CTP HONOUR, 5906 GT, an Indonesian-flagged vessel departing to Port Klang, Malaysia, was delayed prior to departure for an inspection due to several deficiencies or findings that required the vessel to resolve to avoid the risk of being detained at Port Klang.

iii Registration and classification

Vessel's registration in Indonesia

Indonesia adopts a closed-registry system. Therefore, only Indonesian nationals or legal entities that are duly established under Indonesian laws and domiciled in Indonesia can be registered as the rightful owners of Indonesia-flagged vessels.

Minister of Transportation Regulation No. PM 39 of 2017 on Registration and Nationality of the Vessel (MOTR 39/2017) stipulates the following statutory requirements for a vessel to be eligible for registration under the Indonesian flag:

  1. at least 7 GT;
  2. owned by an Indonesian citizen or legal entity duly established under Indonesian law and domiciled in Indonesia; and
  3. owned by an Indonesian legal entity, which constitutes as a joint venture company with the majority of shares owned by an Indonesian national or legal entity.

In general, Article 158, Paragraph (1) of the Shipping Law provides that the registration process of a vessel shall be conducted after the vessel has been measured and has obtained a measurement certificate.

Article 7 of MOTR 39/2017 stipulates that in the event that the vessel was previously registered outside of Indonesia, several documents are required for the registration of the vessel in Indonesia, inter alia, evidence of ownership and a report of vessel safety inspection by the marine inspector or surveyor.

Vessel classification

Indonesia-flagged vessels must undergo classification in accordance with Minister of Transportation Regulation No. PM 7 of 2013 on Classification Obligation for Indonesia-Flagged Vessels (MOTR 7/2013), which was last amended by Minister of Transportation Regulation No. PM 61 of 2014 (MOTR 61/2014). Vessel classification is carried out by either PT Biro Klasifikasi Indonesia (Persero) (BKI), a state-owned enterprise, or another foreign classification agency (members of the International Association of Classification Societies (IACS)) recognised by the Indonesian government under MOTR 7/2013 and MOTR 61/2014. In Indonesia, BKI is the only national classification bureau in Indonesia and was established on 1 July 1964.

The MOTR 61/2014 is silent on whether BKI can be held liable if they have acted negligently in performing their duties. We are aware of a case in which a shipowner filed a statement of claim against BKI on the grounds of an unlawful act due to BKI's refusal to issue a class maintenance certificate (i.e., North Jakarta District Court Decision No. 418/Pdt.G/2017/PN.Jkt.Utr).

From this case, we conclude that filing a claim against BKI is possible on the grounds of an unlawful act. Nevertheless, the plaintiff would be required to establish that BKI had failed to carry out its duties in accordance with the prevailing laws.

iv Environmental regulation

The Shipping Law stipulates that all crew members in a vessel are obliged to prevent and mitigate environmental pollution from their vessel. Generally, liability for pollution that originates from a vessel will be imposed on the owner, master or operator of the vessel.

The issue of pollution from a vessel is also governed under several environmental regulations, including:

  1. Law No. 32 of 2009 on Environmental Protection and Management, last amended by Law No. 11 of 2020 Job Creation (the Environmental Law);
  2. Government Regulation No. 21 of 2010 on Maritime Environment Protection (GR 21/2010); and
  3. Minister of Transportation Regulation No. PM 29 of 2014 on Prevention of Maritime Environment Pollution (MOTR 29/2014).

Air Pollution

As stated above, all crew members in a vessel are obliged to prevent and mitigate environmental pollution from their vessel. Article 3 of GR 21/2010 specifies that air pollution is a form of environmental pollution that may be caused by vessels.

MOTR 29/2014 states that air pollution from vessels includes engine emission and energy efficiency. GR 21/2010 imposes obligations for vessels of 400 GT and over to have as the bare minimum air pollution prevention equipment, such as a gas-filter exhaust, a refrigation system and fire extinguisher equipment that does not destroy the ozone layer.

Furthermore, MOTR 29/2014 stipulates, inter alia:

  1. all vessels with 400 GT and over and all vessels with a diesel engine of 130 kilowatts or over that sail in international waters are obliged to fulfill the requirements of preventing air pollution in accordance with Annex VI of the International Convention for the Prevention of Pollution from Ships 1973 modified by 1978 Protocol (MARPOL 73/78); and
  2. all vessels with 400 GT and over and all vessels with a diesel engine of 130 kilowatts or over, including off-shore drilling facilities or other off-shore facilities, and that sail in Indonesian waters must fulfill the requirements of MOTR 29/2014.

Sea pollution

Indonesia has ratified most of the major international environmental treaties; for example, the United Nations Convention on the Law of the Sea has been ratified by Law No. 17 of 1985 (UNCLOS). Indonesia has also ratified the 1973 International Maritime Convention for the Prevention of Pollution from Ships (MARPOL) and the Protocol 1978 and its annexes through the Presidential Decree No. 46 of 1986 and the Presidential Regulation No. 29 of 2012.

Moreover, the International Convention on Civil Liability for Oil Pollution Damage 1969 and its amendment in 1992 have been ratified by the Presidential Decree No. 18 of 1978 and Presidential Decree No. 52 of 1999 (CLC 1992), respectively.

The Shipping Law stipulates that all crew members in a vessel are obliged to prevent and mitigate environmental pollution from their vessel. Liability for pollution originating from a vessel and the obligation to insure the pollution liability are generally imposed on the owner or operator of the vessel.

It is also compulsory for the owner or operator of a vessel of 1,000 GT and over to insure its liabilities to indemnify third-party losses caused by oil pollution, resulting from bunker fuel operations.

v Collisions, salvage and wrecks

Collisions

Indonesia has ratified the Convention on the International Regulation for Preventing Collisions at Sea 1972 by virtue of Presidential Decree No. 50 of 1979.

Article 249 of the Shipping Law regulates that any accident as referred to in Article 245 of the Shipping Law (sinking of vessel, fire on board and vessel grounded) shall be under the liability of the master of the vessel unless it may be proven otherwise.

Articles 534 to 544 of the Commercial Code are also the key provisions relating to ship collision. Please see Section IV above.

Salvage and wreck removal

Indonesia has ratified the Nairobi International Convention on the Removal of Wrecks of 2007 (the Nairobi Convention) pursuant to Presidential Regulation No. 80 of 2020 on the Ratification of the Nairobi International Convention on the Removal of Wrecks of 2007 (PR 80/2020). As such, provisions of the Nairobi Convention are wholly applicable to vessels operating in Indonesian waters.

Prior to the ratification of the Nairobi Convention, the applicable national regulation as regards Salvage and Wreck Removal is governed under Minister of Transportation Regulation No. 71 of 2013 as amended by Minister of Transportation Regulation No. 33 of 2016 (MOT 71/2013) and any salvage conventions.

Pursuant to Article 202 of the Shipping Law, the owner or its master (or both) is obliged to report its shipwreck, which occurred within Indonesian waters, to the authorised agency. Article 203 of the Shipping Law states that the shipowner shall be obliged to remove its shipwreck or cargo (or both), which is disturbing navigational safety and security, no later than 180 days upon the sinking of the ship or cargo (or both).

Under Article 560 of the Commercial Code, a salvage reward shall be paid for any salvage operations. Unless otherwise agreed by the parties, the salvage reward must be paid even if the salvage operation is not successful. The salvor is entitled to receive compensation for costs, losses and loss of profits. There is no mandatory form of salvage agreement. In practice, Lloyd's standard form of salvage agreement is generally acceptable.

Wreck removal insurance

Article 203 of the Shipping Law, Article 119, Paragraph (2) of Government Regulation No. 5 of 2010 on Navigation as last amended by Government Regulation No. 31 of 2021 on the Implementation of Shipping Sector (GR 5/2010), and specifically Article 18, Paragraph (1) and Article 26, Paragraph (1) of MOTR 71/2013 provide that vessels operating in Indonesia must be insured with wreck removal insurance or through protection and indemnity insurance (P&I insurance), or both.

MOTR 71/2013 and Article 119, Paragraph (2) of GR 5/2010 exclude several vessels from the obligation of having wreck removal insurance, such as war vessels and vessels with less than 35 GT.

Vessel owners who do not have wreck removal insurance or P&I Insurance may be subjected to several sanctions, including:

  1. refusal of operational services by the harbour masters (Directorate General of Marine Transportation Regulation No. HK.103/2/20/DJPL-14 of 2014 on Procedures for Imposing Sanction of Not Providing Vessel Operational Service (HK.103)); and
  2. warnings, licence suspension and licence revocation (Minister of Transportation Letter No. AL 801/1/2/PHB-2014 on the Obligation for Vessels to be insured with Wreck Removal Insurance and/or Protection and Indemnity Insurance).

vi Passengers' rights

Indonesia has not ratified the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea of 1974. The Commercial Code and the Shipping Law (as well as its implementing regulation) provide the main legal basis for the responsibilities of the carrier in relation to the safety of its passengers and goods.

Pursuant to Article 522 of the Commercial Code, the carrier assumes the responsibility of taking care of the safety of its passengers from their embarkation until their disembarkation. Furthermore, in the event that the passenger suffers from injury during the voyage, the carrier will be required to compensate any damages resulting from the injury, unless the carrier can establish that the injury that occurred was attributable to a force majeure cause or was a result of the passenger's own fault.

vii Seafarers' rights

Indonesia has ratified the Maritime Labour Convention 2006 by virtue of Law No. 15 of 2016 on the Ratification of Maritime Labour Convention 2006, which came into force on 6 October 2016.

The Ministry of Transportation has enacted Regulation No. PM 58 of 2021 on Maritime Labour Convention Certification.

Furthermore, Article 28, Paragraph (1) of Government Regulation No. 7 of 2000 on Seafarers provides that the shipping company shall bear the costs of medical treatment and medicines for the sick or injured crew while they are on board the vessel.

Outlook

In addition to the issuance of the Job Creation Law that has amended several regulations related to shipping law, recently, the Indonesian government has enacted Government Regulation No. 13 of 2022 on the Implementation of Security, Safety and Law Enforcement in Indonesian waters and Indonesian jurisdictions. Essentially, this Regulation provides authority to the Indonesian Maritime Security Agency to conduct an inspection upon the vessel if there is a strong allegation that violation (of regulations related to shipping) has occurred.

Footnotes

1 Stefanny Simorangkir is a partner at Budidjaja International Lawyers.

5 Articles 124 and 125 (2) of the Shipping Law as amended by the Job Creation Law.

8 Pursuant to Law No. 15 of 2016, Presidential Decision No. 50 of 1979, Presidential Decision No. 65 of 1980, Presidential Decision No. 46 of 1986, Presidential Decision No. 60 of 1986, Presidential Decision No. 21 of 1988, Presidential Decree No. 57 of 2017 and Presidential Decree No. 57 of 2017.

9 Including, inter alia, the International Convention on Load Lines 1966, the Convention on Load Lines 1966, the Convention on the International Regulations for Preventing Collisions at Sea and the Convention for the Safety of Life International Convention on the Control of Harmful Anti-fouling System on Ship 2001.

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