MEETING WITH THE PRESIDENT, INSA CONTAINS STRATEGIC ISSUES OF NATIONAL SHIPPING

JAKARTA-DPP INSA had a good opportunity to meet with President Joko Widodo at the Merdeka Palace in Jakarta on Wednesday (01/04). On the occasion, INSA conveyed a number of issues surrounding the world of national shipping.
Present on the occasion were the Chairperson of INSA’s DPP Carmelita Hartoto, WKU I Witono Soeprapto, WKU II Darmadi Go, WKU III Darmansyah Tanamas, Head of Bulk Transport Section Buddy Rakhmadi, Deputy Head of Offshore Division Eddy K. Metals and Advisory Board of INP INSA Soenarto. As for those who accompanied President Joko Widodo were Transportation Minister Budi Karya Sumadi and Cabinet Secretary Pramono Anung.
The main issue that became the focus of discussions between INSA and President Joko Widodo was related to the importance of maintaining cabotage principles.
The policy set out in Inpres No 05 of 2005 and the Shipping Law No. 17 of 2008 on Shipping have proven to be positive about hoisting the red and white fleet
to 25 thousand more than since the start of the cabotage principle in 2005 which was only around six thousand fleets.
The cabotage principle has also proven to be positive for other shipping business ecosystems, such as shipyards, logistics, component industries, and seafaring HR education institutions. More than that, the principle of cabotage also means sovereignty of the country regarding the role of national sea transportation from possible threats to national defense and security. Most foreign investment in the shipping industry is not in the form of inflows, as has happened in the infrastructure and manufacturing sectors. Ship investment in the shipping sector is only in the form of transferring vessel assets from a foreign flag to an Indonesian flag, which is recorded as part of investment in the company. The results of foreign shipping business revenues in Indonesia are mostly used to return the value of investment in their home countries. In addition, the ship is a movable asset so that ownership and operations can be transferred at any time outside the territory of Indonesia. Therefore, foreign investment in the shipping sector has a smaller impact than other sectors on the national economy. But that does not mean foreign investment in the sea transportation sector is not needed. Foreign investment is needed for types of work vessels that require high technology, such as offshore drilling vessels with PMA licensing mechanism that is different from PMDN. “For this reason, we submit that the shipping industry is a strategic industry that has the right to be included in the Negative Investment List (DNI),” Carmelita said, Wednesday (04/12).
WKU III DPP INSA Darmansyah Tanamas said that with the policy of including national shipping in DNI, it would greatly assist in the development of medium and small national shipping companies. Other issues discussed between the board of DPP INSA and President Joko Widodo are related to the formation of a single sea and coast guard body in accordance with the mandate of Article 256 of Law No. 17/2008. At present there are many law enforcement agencies authorized at sea. As a result, there are high costs in the middle of the sea and uncertainty when shipping goods. “In the meeting with the President, we also said that it was necessary to establish a single multy task agent, or an agency that covered all the security and safety of the sea and coast,” he said. On that occasion, INSA also conveyed that related to the need for funding support for procurement of ships for the national shipping industry with competitive interest, namely single digits and long tenure ranging from 10-15 years in accordance with the mandate of Article 56-57 of Law No. 17 of 2008. For this reason , it is proposed that sea transportation financing schemes be included or equated with infrastructure financing schemes. Another discussion is related to sea tolls that require the support of all parties, not only from the Ministry of Transportation, but also support from the Ministry of Trade and also SOEs. This is to eliminate the risk of playing the price of sea highway goods by distributors. “The optimization of the Sea Toll Road Program must involve and be supported by many ministries, such as the Ministry of Trade and BUMN.”
The meeting also touched on the empowerment of the national shipyard industry and the support of providing fiscal facilities. Support for national shipyards is also given in the form of age restrictions on imports of non-new ships that can be produced at domestic shipyards.

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