The Indonesian government has postponed its implementation of regulation mandating coal exporters to use Indonesian maritime carriers and insurers.
Concerns regarding the proposal’s possibly crippling impact on international trade figured into the government’s decision to stay its hand, according to a report by S&P Platts. The trade ministry was given a year to revise its rules, sources said.
The regulation’s wording allegedly contained ambiguities which could have adverse effects on exporters’ activities, worrying many market players.
“This regulation is still not ready. It is too general. There are no detailed guidelines or instructions,” an official of an Indonesian coal company told S&P Platts.
There is also a shortage of Indonesian-flagged vessels to carry the coal, it was stated. According to Hendra Sinadia, executive director of the Indonesian Coal Mining Association, the country exports 30 million to 35 million tonnes of coal a month, but the capacity of Indonesian-flagged ships suitable to carrying the coal is only at four million tonnes.
The government will consult with coal exporters, shipping firms, and marine insurance companies in drafting the new regulations, which will also apply to exporters of crude palm oil, which is a major export of Indonesia.