Costs of maritime security inspection to merchant ship operations – the Indonesian shipowners’ perspective

ABSTRACT

Indonesia’s aspiration to become a global maritime fulcrum lacks synergy between its maritime security and its maritime economy. This paper explores the dynamics between maritime security and maritime economy by investigating the current practices of maritime security inspections at sea and how they affect Indonesian shipowners. It also seeks to find solutions for more efficient and corruption-free maritime security inspections. To understand the Indonesian shipowners’ perspective on current practices of maritime security inspections at sea and how they impact businesses, the authors conducted an interview, a focus group discussion and a survey involving the Indonesian National Shipowners Association (INSA). From these methods, the authors found a common issue - that merchant ships operating in Indonesian waters face stoppages and demands for paying illegal fees during maritime security inspections at sea. Consequently, these inefficient and corrupt maritime security inspections are costly to Indonesian shipowners because they lower the ship’s productivity, increase voyage costs, give rise to claims related to contracts of affreightment and reduce profit. To improve efficiency and deter corrupt practices during maritime security inspections, this paper proposes a few solutions such as consolidating inspections, changing the mindset of maritime security agencies, and improving transparency and accountability.

Acknowledgement

This study was funded by the Ministry of Research and Technology of the Republic of Indonesia and would not have been possible without the support from the Indonesian National Shipowners Association and Badan Keamanan Laut Republik Indonesia. We are grateful for Arie Afriansyah who proofread this paper and Christou Imanuel who assisted us in the legal research. We thank Aristyo Darmawan, Gita Lestari Ardi and Muhammad Arif for their administrative support.

Credit statement

Yetty Komalasari Dewi: supervision, conceptualization, methodology, investigation, resources, writing - review & editing, project administration, funding acquisition.

Dhini Purnamasari: conceptualization, methodology, software, formal analysis, investigation, writing – original draft, review and editing.

Declaration of interests

The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This work was supported by Kementerian Riset Teknologi Dan Pendidikan Tinggi Republik Indonesia; Kementerian Riset, Teknologi dan Pendidikan Tinggi.

Notes on contributors

Yetty Komalasari Dewi

Yetty Komalasari Dewi is an associate professor and a full-time lecturer at the Faculty of Law, Universitas Indonesia. Yetty earned her Bachelor degree (Sarjana Hukum/SH) from the Faculty of Law, Universitas Indonesia (UI) in 1993, her Master of Legal Institution (ML.I) from School of Law, University of Wisconsin-Madison, the USA in 2003, and her Doctorate in Law (Dr) from UI in 2011. Her research interest is (international) trade/commercial/business law, company/corporate law, investment law, and arbitration. Currently, she is the Head of the Department of Law in Economic Activities and Technology as well as the Head of the Legal Center for International Trade and Investment (LCITI), Faculty of Law, Universitas Indonesia. She also plays an active role in research institutions, and currently serving as a member of the Reviewer Board of Indonesian Law Review (ILRev) of the same university, a member of subject editors of the Asian Journal of Comparative Law (AsJCL), the National University of Singapore, and a certified international research reviewer (CIRR).

Dhini Purnamasari

Dhini Purnamasari is a researcher at the Center for Sustainable Ocean Policy at Universitas Indonesia with a research area focusing on the intersection between maritime security practices and maritime economy development. She has a BSc degree and an MSc degree, both in Maritime Studies, from Nanyang Technological University, Singapore and has seven years of work experience in Singapore's maritime sector in the fields of commercial tanker operations and technical ship management. She is an incoming graduate student at the Fletcher School of Law and Diplomacy at Tufts University and planned to specialize in global governance and international legal studies.