As we scramble to contain the COVID-19 pandemic, the Indonesian shipping industry is facing a moment of truth with regard to the implementation of the “beyond cabotage” regulation. Cabotage laws insulate the domestic shipping industry from foreign competition to achieve safety, security and economic goals.
Indonesia is not alone in giving certain privileges to domestic shippers, shipbuilders and sailors. In the United States, The Jones Act of 1920 requires that all waterborne logistics between US ports be carried by ships flying the US flag, constructed in the US, owned by US citizens and crewed by US citizens or permanent residents. The Tariff and Customs Code of the Philippines (1937) made clear that all domestic transportation of goods and passengers follow cabotage principles; shippers must secure a coastwise license from the Maritime Industry Authority.
Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.