European Shipowners ‘Highly Worried’ by Indonesia’s New Protectionist Shipping Rules

coal loading
Photo: By Aleksey Stemmer / Shutterstock

European shipowners have come out against Indonesia’s move to restrict the import and export of certain commodities to ships flying the Indonesian flag.

The European Community Shipowners’ Association issued a statement on Monday opposing Indonesia’srecent decree, which the ECSA says is highly worrying particularly since the protectionist rules come at a time when the European Union and Indonesia are negotiating a bilateral free trade agreement.

The new law, which won’t enter into force until April 1, 2018, imposes that certain commodities, such as coal and crude palm oil, can only be transported for import or export by “National Maritime Transportation Companies”. The rule also applies to the import of rice and goods for government procurement.

“This new law is a clear measure of protectionism and will impact seriously European shipping companies that have longstanding access to this market. European shipowners also warn that it puts at risk the Indonesian’s business climate and confidence for foreign investors,” the ECSA said in a statement on Monday.

Martin Dorsman, ECSA’s Secretary General comments: “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.”