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ECSA joins protest against Indonesian cabotage rule

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Following on the heels of a strong protest from the International Chamber of Shipping (ICS) last week, European shipowners have also spoken out against a decree imposing a cabotage policy on certain commodities that Indonesia has adopted recently.

The European Community Shipowners’ Associations (ECSA) said it is “highly concerned by the recently adopted Indonesian new decree on maritime transportation of certain goods” and “requests the EU to react upon this violation of free trade principles, especially in the light of the ongoing FTA discussions between the EU and Indonesia”.

ECSA secretary-general Martin Dorsman said: “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.”

The new law imposes that certain commodities can only be transported for import or export by Indonesian national maritime transport companies. Commodities affected are coal, crude palm oil, 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,” ECSA reiterated.

The European shipowners also warned that it puts at risk Indonesia’s business climate and confidence for foreign investors.

Echoing ICS’s concerns, ECSA raised questions on issues such as the definition of national maritime transportation companies stated in the decree as well as the actual commodities covered by the regulation and whether include derivatives or not.

Expressing concern, ECSA said it is “highly worried by this new decree” as its rules are not compatible with the principles of free trade and customary law regarding international maritime transport services, as well as goes against Indonesia’s WTO commitments. In addition, they are also seen to lead to unfair competition and market distortion while reducing confidence in Indonesia’s business climate among EU companies.

ECSA called on the EU to approach the Indonesian authorities to get the law taken off the table as well as ensure inclusion of strong principles on maritime transport services in any future free trade agreement with Indonesia that will avoid the re-emergence of any such rules.