University of Wollongong Thesis Collections University of Wollongong Thesis Collection University of Wollongong Year 2003 The legal regime governing shipping in Indonesia Chairijah University of Wollongong Chairijah, The legal regime governing shipping in Indonesia, Doctor of Philosophy the- sis, Faculty of Law, University of Wollongong, 2003. http://ro.uow.edu.au/theses/1861 This paper is posted at Research Online. THE LEGAL REGIME GOVERNING SHIPPING IN INDONESIA A thesis submitted in fulfillment of the requirements for the award of the degree of DOCTOR OF PHILOSOPHY. UNIVERSITY OF WOLLONGONG by CHAIRIJAH, S.H., M.H. CENTRE FOR MARITIME POLICY FACULTY OF LAW, UNIVERSITY OF WOLLONGONG 2003 Thesis Certification CERTIFICATION I, Chain]ah, declare that this thesis, submitted in partial fuLfilment of the requirements for the award of Doctor of Philosophy, in" the Centre for Maritime Policy, University of Wollongong, is wholly my own work unless otherwise referenced or acknowledged. The document has not been submitted for qualifications at any other academic Institution. Chairijah 12 August 2003 ABSTRACT Marine development, particularly that of the shipping industry, constitutes an integral and essential element of Indonesia's on-going national progress in not only meeting the needs of the domestic movement of passengers and trade, but also in supporting export and import activities. Sea transportation is still the cheapest, most effective and efficient type of transportation, particularly for the more isolated areas of Indonesia. Despite these benefits sea transportation is potentially risky. For this reason the development and management of shipping must be integrated with other areas of the economy by means of clear and sustainable planning. Obstacles to the rapid development and modernisation include the scarcity of qualified persons, insufficient facilities and infrastructure, hmited budgets, too few marine institutions, and a lack of strong interest in gaining expertise in the marine sector generally. However, significant strides have been made in Indonesia since the 1990s through Government's Long Term Development Plan (PJP). This thesis examines the regulatory framework governing shipping in Indonesia. The areas of focus are the development and implementation of the regulation of shipping and water transportation, including shipowners" responsibility, port management, search and rescue, and court jurisdiction. The thesis argues that the development of the shipping industry really needs to be supported by a proper legal framework, which is inadequate at the moment. 11 ACKNOXVLEDGEMENTS The completion of this thesis would not have been possible without the generous support of the author's supervisor, colleagues, family, and many friends. I convey to all of them my deepest gratitude and appreciation to them in both Indonesia and Australia. At the University of Wollongong, Professor Martin Tsamenyi, Director of the Centre for Maritime Policy, has been the author's supervisor, and indeed mentor. He has provided guidance, various critiques, and encouragement during the entire preparation and writing of the thesis. I am deeply appreciative of his efforts. I thank to the Secretary of the Centre for Maritime Policy, Ms Myree Mitchel. Thanks are also due to Dr Sally Bashe and her's friends for their collegial support and encouragement, and for the provision of a very positive learning environment. Appreciation is also expressed to Dr Richard Mohr, the Postgraduate Coordinator at the Faculty of Law of the University of Wollongong, who provided excellent research facilities, and to Dr Sam Bateman and to Professor John Morrison for their assistance. Appreciation is also extended to the Department of Justice of the Republic of Indonesia and Human Rights, particularly the National Law Development Agency where the author worked. Deep gratitude is conveyed to Professor Dr Yusril Ihza Mahendra, Ministry of Justice and Human Rights, who provided me with excellent opportunities for research, including the opportunity to continue my study abroad. Such gratitude is also extended to Professor Dr Romli Kartasasmita, head of the National Law Development Agency (BPHN), and to Professor H.A.S Natabaya, (retired), both of whom supported me continued study, and all Directors and colleagues in BPHN. I also thank to Bapak Hasanudin, Secretary General of the Department of Justice and Human Rights. This thesis would not have been possible without my family's support. For this reason I record my deepest appreciation to all my sisters and brodiers as well as my nephews and nieces. Thanks to all the other wonderful people, who have helped me to successfully complete this thesis. Space will not allow me to name them all. Whilst every care has been taken with this thesis I am aware, as the Indonesian proverb says, There is no ivory that is not cracked', that there is room for improvement. In this regard I welcome any suggestions from readers. Although many people have provided assistance to me, any errors in the thesis are entirely my responsibility. Thanks are to God Almighty, who in His mercy, has blessed me with the good health and resolution to undertake and bring this work to completion. Ill DEDICATION I dedicate this work to the memory of my beloved parents, who took in earnest God's injunction that we are different fi-om each other so that we may learn from each other, and who were unfailingly enthusiastic in encouraging me in my search for knowledge, so that I may do good and please GOD Almighty. IV TABLE OF CONTENTS ABSTRACT i ACKNOWLEDGEMENTS ii DEDICATION iii TABLE OF CONTENTS iv LIST OF ACRONYMS ix LIST OF TABLES xi TABLE OF CASES ...^sdi TABLE OF STATUTES ..xiii INTRODUCTION 1 I. The Study in Context 5 II. Methodology 11 III. Summary of Chapters 12 CHAPTER ONE: HISTORICAL BACKGROUND 13 1.0. Introduction 13 1.1. Indonesian Maritime History 14 1.2. Indonesia after 1945 15 1.3. The Indonesian New Order Government 18 1.4. Indonesian Laws related to Marine Activities 18 1.5. The Rationale for Maritime Development in Indonesia 19 1.6. Conclusion 21 CHAPTER TWO: AN OVERVIEW OF SHIPPING AND ITS REGULATION IN INDONESIA 23 2.0. Introduction 23 2.1. The National Transportation System 24 2.2. The Development of Indonesia's Maritime Sector 24 2.3. Maritime Sector Development Program 25 2.4. Shipping Policy 26 2.5. Government Initiatives to Challenges 27 2.6. Introduction to Water Transportation Regulation 28 2.7. Domestic and International Sea Transportation 31 2.8. Types of Shipping Businesses 33 2.9. Indonesian Citizens and Traditional Water Transportation Businesses 34 CHAPTER THREE: INTERNATIONAL SHIPPING CONVENTIONS RATIFIED BY THE INDONESIAN GOVERNMENT 48 3.0. Introduction 48 3.1. The Major Guidelines of State Strategy (GBHN) 50 3.2. Implementation of International Conventions 52 3.3. Types of Ratification and Legalisation Procedure in Indonesia 54 3.4. Ratification Procedure under the Law of the Republic of Indonesia No. 24/2000 56 3.5. The Processing 57 3.6. Consequence of the Ratification 59 3.7. Conclusion • 64 CHAPTER FOUR: NATIONAL PORT GOVERNANCE 65 4.0. Introduction 65 4.1. National Port Governance 65 4.2. The Influence of International Laws 68 4.3. Policy Formulation 70 4.4. The Authority and the Development of Ports in Indonesia 72 4.5. Economic Order 73 4.6. Indonesian Government Port Regulation (PP No. 69/2001) 75 4.7. Port Affairs 77 4.8. National Port Arrangement 79 4.9. The Arranging of National Port Procedure 80 4.10. Port Management Authority 81 4.11. The Organisation of the F>ublic Port 81 4.12. The Types of Ports 82 4.13. Classification, Types and Functions of Ports 83 4.14. The Border Crossing Port 84 4.15. Port Operation 84 4.16. The Obligations of Operators in the Port Areas 85 4.17. Responsibility of Participants in Port Activities 86 4.18. Dry Ports 86 4.19. Special Ports 87 4.20. Open Sea Port for Overseas Trade 89 4.21. Tariff and Service Considerations 89 4.22. Government- Private Co-operation 90 4.23. Waste Reservoir Port Facilities 91 4.24. Indemnity for Damage 92 4.25. Additional Provisions 92 4.26. The Impact of UU No. 22/1999 on Local Autonomy Regulation of Port Management and Income 93 4.27. Tanjung Priok Port Regulation 94 4.28. The Tanjung Priok Harbour Master's Responsibility and Liability 95 4.29. Responsibilities of Ship Entrepreneurs, Owners or Operators in Tanjung Priok Port 95 4.30. Investigation and Penalty 96 4.31. Private Sector Investment in Indonesian Public Ports 100 4.32. Analysis 101 4.33. Conclusion 102 CHAPTER FIVE: NAVIGATION LAWS GOVERNING SHIPPING BUSINESS IN INDONESIA 103 5.0. Introduction 103 5.1. The Indonesian Legal Instruments on Shipping Business 108 5.2. Shipping Enterprises based on Indonesian Navigation Laws 109 5.3. Business Permits £ind Parties 110 5.4. Companies that facilitate Sea Transport Business Ill 5.5. Domestic Sea Transport 115 5.6. Domestic Sea Transport and Route Systems 116 5.7. Tariff Consideration 118 VI CHAPTER SIX: THE PRACTICAL EFFECT OF THE INDONESIAN COMMERCIAL CODE ON SHIPPING BUSINESS PRACTICE.. 137 6.0. Introduction 137 6.1. KUHD Book Two 138 6.2. Shipping Entrepreneurs and Industries 144 6.3. The Ship Owners' Responsibility 145 6.4. Business Conditions 146 6.5. Passengers 146 6.6. Master and Crew of Ships 148 6.7. Marine Labour Agreements 150 6.8. Conclusion 150 CHAPTER SEVEN: THE RELATIONSHIP BETWEEN SHIPPING BUSINESS AND MONOPOLISTIC PRACTICES AND UNFAIR BUSINESS COMPETITION 152 7.0. Introduction...... 152 7.1. An Overview of Indonesian Monopolistic Regulation 153 7.2. Monopolistic Practices and Unfair Business Competition 156 7.3. The Determination of Monopolistic Practices and Unfair Business Competition 157 7.4. The Ban on Monopolistic Practices and Unfair Business Competition with regard to Shipping Business in Indonesia 158 7.5.