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NEW UPDATES Asean Affairs   24 December 2013  

Cabotage rule hampers cruise tourism within Indonesian waters

With thousands of tourist spots to offer as well as improvements in its port infrastructure, Indonesia has seen its cruise-tourism market share grow in the past several years and the country has become one of the major destinations in Asia Pacific.

According to recent Tourism and Creative Economy Ministry data, there were 309 cruise calls made throughout 2013 and the number of foreign tourists brought to Indonesia aboard the ships totaled 159,578, with both figures representing an increase of more than 40 percent compared to 2012.

Additionally, the data showed that some 47,000 Indonesians flew to Singapore last year to board cruise ships to travel to Australian and Asia-Pacific destinations, including in Indonesia.

“This situation has attracted a number of cruise liners to base their operations in Indonesia, especially in Bali. The island remains the most popular tourist destination and the fact is that almost every passenger wants to visit there,” ministry spokesman Noviendi Makalam told The Jakarta Post.

He said that several operators such as Princess Cruises, had shown an interest in home-porting in Indonesia in the future, not only because of the high demand from passengers who wish to travel to the archipelago but also due to increasing fuel prices.

While declining to fully reveal the company’s plan for the Indonesian market, Princess Cruises Southeast Asia director Farriek Tawfik said they planned to make many sailings to Indonesia from Singapore, including stopovers at Bali, Jakarta, Komodo and Lombok. “It will also help us to develop flying-cruise tourism where tourists fly from such destinations as Singapore, Europe or any other part of the world, to Bali to enjoy their cruises, return to Bali and then fly back to their home countries,” Noviendi said.

However, he said that the cabotage principle — which was introduced in 2005 and which requires all vessels operating within Indonesian waters to be domestically owned — was the biggest barrier.

The principle is in line with the 2005 Presidential Instruction on national shipping industry development and the 2008 Shipping Law.

Noviendi said he had talked to the Transportation Ministry to consider relaxing the cabotage system to allow operators to bring in cruise tourists, including domestic tourists, who wanted to explore the nation.

“I think it would be similar to the case where foreign-flagged offshore support vessels and rigs are allowed to operate in our waters because we do not have enough facilities of our own yet,” he said. Noviendi hoped that relaxing the principles would result in the emergence of local cruise operators in the future.

Separately, the Transportation Ministry’s sea transportation director general, Bobby R. Mamahit, said that his internal team was still discussing whether they would open the market to foreign cruise liners.

“We fully support the tourism sector, but we still need some time to think about it carefully. But, if in the end we decided to relax the cabotage, we would have to make sure that the vessels carried only tourists, nothing else,” Bobby told the Post, adding that penalties would be applied if the operators broke the rules.

Indonesian National Shipowners Association (INSA) chairwoman Carmelita Hartoto, however, said that the cabotage principle should not be compromised. She said that allowing cruise operators to have regular itineraries from one point to another in Indonesian waters would violate the law in addition to threatening the country’s maritime business. “The [cabotage] principle was implemented to boost the nation’s economy. No foreign ship should be allowed to transport people within our waters even though they are cruise liners carrying tourists. If they want to home port in Indonesia, they should include international destinations,” she said.

Indonesia does not currently have any cruise operator but Carmelita claimed that INSA members had the capacity to build such ships.

Cruising is one of the special interest tourism sectors that are being developed by the Tourism and Creative Economy Ministry. The ministry has targeted luring 500,000 people through cruise tourism by the year 2016.

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