ARTICLE
21 March 2022

Shipping Law 2022

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SSEK Law Firm

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SSEK Legal Consultants was formed in 1992 and today is one of the largest corporate law firms in Indonesia. SSEK offers the full suite of corporate and commercial services across a range of practice areas. We have the experience and expertise to handle the largest, most complex cross-border transactions and projects in Indonesia.
The Indonesian Maritime Court, or Mahkamah Pelayaran, is regulated under Law No 17 of 2008 regarding Shipping, as amended by Law No 11 of 2020 regarding Job Creation...
Indonesia Transport

1. MARITIME AND SHIPPING LEGISLATION AND REGULATION

1.1 Domestic Laws Establishing the Authorities of the Maritime and Shipping Courts

The Indonesian Maritime Court, or Mahkamah Pelayaran, is regulated under Law No 17 of 2008 regarding Shipping, as amended by Law No 11 of 2020 regarding Job Creation (the "Shipping Law"). The Shipping Law defines the Maritime Court as a panel of experts that is responsible to, and under, the Ministry of Transportation. The court has the authority to conduct followup investigations of shipping accidents and to enforce a professional code of ethics and competence for ship Masters/officers after a preliminary examination by the harbourmaster. The Maritime Court also has the authority to examine collisions between commercial ships and state ships, as well as state ships and warships. Nevertheless, the Maritime Court is not considered as a juridical court within the framework of Indonesia's legal system, and at most is only able to issue administrative sanctions.

Moreover, both the Shipping Law and the Indonesian Commercial Code (ICC) provide that maritime claims may also be submitted to the Indonesian district courts. Common maritime claims include maritime casualties and collisions, cargo claims and passenger claims.

1.2 Port State Control

Pursuant to Article 218 of the Shipping Law, a harbormaster (syahbandar) has the authority to conduct seaworthiness and safety inspections of Indonesian-flagged ships. Harbourmasters can also conduct these inspections on foreignflagged ships at Indonesian ports. Among their powers, harbourmasters have the authority to inspect vessels and seek information for the purpose of gathering evidence in relation to marine casualties.

Specifically, regarding port state control, Minister of Transportation (MOT) Regulation No 119 of 2017 regarding Foreign Ship Safety and Safety Check Officers ("MOT Reg 119/2017") defines "port state control" as state supervision of the seaworthiness and safety of foreign ships entering ports to ensure the fulfilment of requirements implemented by harbourmasters.

In general, port state control officers, appointed by the harbourmaster, have the power to detain and delay the departure of a ship when the ship's disobedience of the aforementioned requirements threatens the safety of the ship, human lives and/or the maritime environment. Indonesia's port state control system has been put in place in reference to the Memorandum of Understanding on Port State Control in the Asia-Pacific Region (the "Tokyo MOU"), to which Indonesia is a signatory, and the Tokyo MOU is specifically mentioned within MOT Reg 119/2017.

Port state control officers do not have any authority over marine casualties such as grounding, pollution or wreck removal. According to Government Regulation No 30 of 2021, shipowners are responsible to manage grounding and wreck removal. However, if within 180 days since the collision the ship-owner has not carried out the wreck removal, the removal must be carried out by the MOT, at the expense of the owner of the wreck. If the position of the wreck and/or its cargo is disrupting the operation of the port and/or polluting the maritime environment, the harbourmaster may order the ship-owner immediately to lift or get rid of the wreck and/ or its cargo.

Additionally, as written in Section 3.1 of the Tokyo MOU, the authority of port state control officers in connection with pollution matters is limited to inspecting a ship's Master or crew and their readiness to prevent pollution.

Indonesia recently succeeded in fulfilling the white list criteria for the Tokyo MOU, which should help reinforce shipping safety and security in Indonesian waters.

1.3 Domestic Legislation Applicable to Ship Registration

Indonesia's Shipping Law provides that an Indonesian vessel's legal status is only valid if the vessel has already been registered in a certain jurisdiction. Pursuant to MOT Regulation No PM 39 of 2017 regarding the Registration and Nationality of Vessels ("MOT Reg 39/2017"), vessel registration includes the registration of the following:

  • ownership rights;
  • granting of mortgages; and
  • other proprietary rights (such as bareboat charters and leasing).

The MOT has appointed the Director General of Sea Transportation to oversee this process.

1.4 Requirements for Ownership of Vessels

In Indonesia, the operation or use of a vessel requires registration and licensing. The owner of a vessel can register the vessel in Indonesia with a Vessel Title Transfer and Registrar Official (Pejabat Pendaftar dan Pencatat Balik Nama Kapal) appointed by the MOT. For a vessel to be registered, it must have a minimum of seven gross tonnage (GT) and be owned by an Indonesian citizen or an Indonesian legal entity that is majority Indonesian owned. Article 7 of MOT Reg 39/2017 provides that the following documents must be submitted for vessel registratio

  • proof of title on the vessel;
  • identity of the vessel owner;
  • taxpayer registration number (Nomor Pokok Wajib Pajak);
  • tonnage certificate (Surat ukur);
  • proof of payment for the transfer of title (balik nama); and
  • power of attorney (if an application is submitted by a proxy).

The vessel registration application is submitted online through the Electronic Vessel Registration System (Sistem Pendaftaran Kapal Elektronik, or SPKE) and within three working days the Vessel Title Transfer and Registrar Official will examine the application to ensure the completeness of the documents. A minutes of vessel registration will be issued if the requirements described above have been satisfied. As stipulated by Article 11 (1) of MOT Reg 39/2017, the vessel owner will then receive a grosse vessel registration deed.

1.5 Temporary Registration of Vessels

MOT Reg 39/2017 permits the temporary registration of vessels that are under construction in Indonesia or abroad. This temporary registration will be made in the form of a temporary registration certificate. The certificate will only be issued when construction of the hull, main deck and the entire superstructure has been completed.

Article 160 of the Shipping Law prohibits the dual registration of vessels.

1.6 Registration of Mortgages

Vessel mortgages in Indonesia fall under the authority and jurisdiction of the Ministry of Transportation. Pursuant to Articles 28 and 29 of MOT Reg 39/2017, the beneficiaries for vessel mortgages may be Indonesian or foreign citizens, banks and financing or non-financing institutions (both national and international). Vessel mortgages will only be granted following the submission of an application to a Vessel Registrar, accompanied by the following documents:

  • credit/loan agreement;
  • original grosse of vessel registration deed or grosse deed of the vessel's title transfer; and
  • power of attorney in notarial deed form (if such registration is registered by a proxy).

To read the full article click here

Originally Published by Chambers Shipping 2022 Global Guide

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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