This content is from: Local Insights

Revision of cabotage rule for foreign flag vessels

Freddy KaryadiOene Marseille

On April 4 2011, the Indonesian Government promulgated Government Regulation No 22 of 2011 (GR 22/2011) concerning an Amendment to Government Regulation No 20 of 2010 (GR 20/2010) on Transportations in Waters.

The key points of the amendments made under GR 22/2011 are:

  • removal of the restriction that applies under Article 5 of GR 20/2010 for foreign flag vessels operating in Indonesian waters as long as the vessel is not used to conduct passenger and/or goods carriage services; and
  • inclusion of a new Article 206a which allows foreign flag vessels to operate in Indonesian waters for activities which are not classified as activities of carrying goods and/or passengers, provided that the foreign flag vessels obtain a permit from the Minister of Transportation and the vessels are not available in Indonesia or not sufficiently available.

The activities which are not classified as activities of carrying goods and/or passengers (and thus which can be carried out by foreign flag vessels) are:

(i) oil and gas exploration services;
(ii) drilling;
(iii) offshore construction;
(iv) offshore support operations;
(v) dredging activities; and
(vi) salvage and underwater works.

The mechanism for granting the exemption for vessels used in the above activities is further stipulated under regulations of the Ministry of Transportation No. 48 of 2011 dated April 18 2011.

Oene Marseille and Freddy Karyadi

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