APBI-ICMA – Press Release
"Coal Exporters Propose Immediate Revocation of Minister of Trade Regulation No. 82-2017 In Order to Maintain Smooth Process of Export Amid COVID-19 Spread"
In response to several news in the media that quoted the statement of the Coordinating Minister for Maritime Affairs and Investment regarding the government's stance to revoke the Minister of Trade Regulation (Permendag) No. 82 of 2017, which among other things requires the use of national insurance and national shipping for the export of certain commodities such as coal and palm oil (CPO), which we from association (APBI) very well welcomed. APBI appreciate the government's policy which will revoke/cancel the Decree which has the potential to hamper the coal exports and harm the overall national economy.
However, to provide more certainty and clarity for exporters and also for importers, we request that the government, in this case the Ministry of Trade, immediately issue a new regulation that revokes/cancels the Trade Regulation 82/2017. We believe that the Trade Regulation 82/2017, which is planned to be effective on May 1, 2020, has proven to have caused unrest/concern about the process of coal export to the extent of importers cancelling several coal import purchases and will have an additional financial burden on many of coal exporters. From our perspective, the enactment of the Trade Regulation 82/2017 is not in line with the government’s effort to work together with the society in facing the impact of the spread of the COVID-19, especially the government's effort to encourage export stimulus in supporting the national economy that was shaken due to the spread of COVID-19.
APBI have raised concerns that exports will be hampered as well as explained the potential of additional costs for the exporters, to the government, both in numerous of official meetings and through official letters these past couple of months, including the information of our members' cancellation of shipments for the month of April, May and so on by several coal importers. The policy that will require coal exports to use vessels from national shipping companies amid the very limited capacity of the national vessel itself (only less than 2 percent of coal export volumes are served by national vessels), will add to the cost burden, hence, making our selling price of FOB (free-on-board) become uncompetitive and increasingly depressed. APBI also have addressed the cost burden due to the implementation of the Trade Regulation 82/2017 for the use of national insurance that has been applied since July 2019 which has proven to have added the operational cost for the cost that should not be needed, because in the FOB scheme, it is the importers who are obliged to take care of the procurement of the ship and insurance.
Nonetheless, APBI will continue to support the development of the national shipping industry in order to be able to further develop the capacity of national vessels to serve the improvement of coal transportation, especially for the domestic procurement which continues to increase as well as for the export.
Jakarta, March 20th, 2020
Chairman of APBI-ICMA
For further information, please contact Hendra Sinadia (Executive Director of APBI-ICMA) + 62-821-25365869