The Indonesian government recently launched an omnibus law bill to create more job in the maritime sector. PresidentJokoWidodo is expected to amend a bunch of sections in the existing Shipping Law No. 17/2008. Apparently, Indonesia was inspired by Philippines, the first country to implement it among the ASEAN countries.
However, manydomestic maritime stakeholders consider that the idea will be regressive for the sector rather than empower it.They believe that it will be quite detrimental similar to Global Maritime Fulcrum (GMF) that was instituted during Jokowi’s first term in office. The GMF was hailed as a breakthrough nationally and globally given that Indonesia was blessed with abundantly huge maritime domain. This provided a competitive advantage in maritime sectors such as shipping, port business,and was given a high priority status in the government’s programs.
Under the auspices of GMF, in particular the maritime connectivity pillar, new ports were constructed and scores of new vessels were built to connect them across the archipelago through the navigational highway or TolLaut. All maritime-related groups were happy though they also admitted that the policy could not reduce the price disparity between Java and outside Java. This “honeymoon” would cease when the government issues the new bill that aims to create more jobs and vacancies for the workforce.
The government repeatedly emphasizes that the new law bill reflects a strong commitment to ease the business environment by erasing red tape. Shipping bosses admit that the bill would push efficiency at the ports. However, seafarers are against it and already staged demonstrations to reject the draft.
The new Law, formally named as RancanganUndang-undangCiptaKerja (Job Creation Bill), is omnibus. It contains chapters which are designed to amend, even delete hundreds of sectionsof the existing laws. For instance, Chapter 59 of the Omnibus Law amends 60 sections and takes 10 sections off the existing Shipping Law No. 17/2008. These sections are very technical. At this point the rectification is highly appreciated by the country’s shipping players since the affected subjects could be regulated with a more flexible bylaw like the ministerial decrees or director general circulars.
There are three key issues that need push but there is no reference to these in the new bill. First is about the coast guard. This is a complicated subject involving conflicting interest among multiple government agencies that have authority and assets to patrol the country’s territorial waters i.e. National Police, Indonesia Navy, Ministry of Fisheries and Marine Affairs, Ministry of Transport, Ministry of Finance, and Maritime Security Board or Bakamla.However, the circulated draft does not resolve this issue. However, the existing Shipping Law is the best entry point to settle this issue given that it contains, for instance, the specific word “coast guard” something that is not mentioned in the Ocean Law No. 32/2014, which is the legal basis for instituting the Bakamla. Moreover, Shipping Law does not have provision to mention coast guardmission across the worldi.e enforcer of maritime safety. Similarly, such a phrase is absent in the Ocean Law.’
In response to the above observations, two senior ministers in charge of maritime affairs and security affairs, Mr. Luhut B. Pandjaitan, Coordinating Minister for Maritime Affairs and Investments, and Mr. Mahfud MD, Coordinating Minister for Political, Legal and Security clarified that the Indonesian coast guard issue would be addressed by a separated regulation. Apparently, government is simultaneously preparing another omnibus law dedicated solely on the subject through a presidential order or Inpres (InstruksiPresiden). The bottom line is that the agency would be established by the empowerment of Bakamla. Other agencies, one speculation says, would be merged into it.
The second issue is about minimum wages for domestic seafarers. In Indonesia, the standard is generally determined by the governor of a province after consulting the relevant parties. Since seafaring is a specific; skilled profession and its minimum wage is decided by the central government, i.e. the Ministry of Transport. But, for many years the ministry is not able to establish a single salary reference for the job.Consequently, the national shipping operators pay seafarers by their own standard. The bona fide companies usually refer to the existing regional wage standard and add certain benefits. Lack of directives pertaining to the standard in the omnibus law bill have triggered massive demonstrations by the seafarers’ unions across the archipelago. They demand the bill to be revoked.
Thirdly, the omnibus law bill strips the role of the regional administrations from maritime affairs. Though half-heartedly implemented, the existing Shipping Law still provides them room to maneuver through licensing or recommendation. Under the new bill, these powers are withdrawn and reside with the government in Jakarta. With the unsuccessful results of TolLaut in suppressing the price disparity between Java and outside Java,the governors or mayors’ role in the sector should be expanded instead.
Indonesia has to learn from other countries in the region on how to position the regional administrations in developing the country’s maritime sector. One of them is India where the states have as much power as possible in maritime affairs.With such authority the administration of Andaman and Nicobar, region that is close to Indonesia’s Aceh province, have launched a shipping connectivity to Sabang City sometimes ago. Yet, there is no report on how it is progressing right now.
It is important to maintain because the two regions have huge potential to trade in commodities and their people share a deep cultural linkage that may be reestablished by the shipping service. For Sabang City administration all these possibilities can only be expanded and executedunder one condition provided they have greater authority.
Mr Siswanto Rusdi is Director, The National Maritime Institute, Jakarta, Indonesia.