REVISED INDONESIAN CABOTAGE PRINCIPLE FAMILIARIZATION

Since it was first emerged in the year of 2005, implementation of cabotage principle has been able to bring a breeze to the domestic shipping industries. As well as the BP migas (Indonesian government executive body to manage the upstream activity in oil and gas field) which has been fully supported this implementation of cabotage principle. As we know, President’s instruction No.5 year 2005 regarding the Empowerment of National Shipping Company has become an initiation point for the implementation of this principle. However in the course of time, just before the cabotage principle imposed to all commodities transportation on 7 May 2011, based on the mapping along with all the stakeholders, the cabotage principle can not be consistently implemented to the oil and gas exploration activity and the offshore exploitation of the oil and gas. This is happen because the unavailability or the insufficient availability of Indonesian flagged vessels to support oil and gas operation. This condition will lead to the disturbance in continuity of offshore oil and gas activity, which will have an impact to the national energy security and eventually will endanger the vialibility of ongoing national development.
In respond to this matter, the government issued The Government Regulation No.22/2011 and The Minister of Transportation Regulation No.48/2011 as a commitment from the government ensuring the continuity of exploration and exploitation of oil and gas while still giving the main priority to the national shipping industries.
As a good gesture of concern and ensure all the relevant aspect to aware and understand this changes of regulation for sure, The Department of Transportation, BP migas and The Ministry of Energy and Mineral Resources of The Republic Indonesia held a briefing for this new regulation.

CABOTAGE

What is cabotage?

Cabotage is a term universally adopted by the international maritime community to protect registered or licensed ships to trade between ports in the country concerned. The word is French in origin meaning coastal sailing. Similar policies exist throughout the world in regard to domestic transport each country for local shipping protections.

Nearly every country in the world with a coast of its own regards coastal shipping as an integral part of its domestic transport system. For some countries it is not a big issue where there is a short coastline with one or two ports. For others with very large coastline opening up domestic transport sectors to foreign competition is something they have persistently regarded as non-negotiable.