Shipping Agencies Create Jobs, Absorb Thousands of Employees, in Line with UUCK Vision

Photo: Education and Training on Shipping Agency Business

The shipping agencies’ businesses have created more jobs and absorbed thousands of employees, thanks to the government policies, laws, and regulations that have supported this business entity to get growth and expansion. 

Additionally, the government policy through issuance of Regulation of Transport Minister (Permenhub) No11/2016 has been in line with the spirit of Law on Job Creation (UUCK).

According to the Permenhub No.11/2016, the activities of shipping agencies can be run by both, those who hold shipping permit (SIUPAL) and those who hold shipping agencies business permit (SIUPKK). This regulation, said Indonesia Shipping Agencies’ Association (ISAA), has encouraged more jobs and extensive absorption of employees.

Data from Directorate General of Sea Transportation (Ditjen Hubla) says that until last year (2020), as many as 769 SIUPKK had been issued. 

Assuming that each shipping agency with SIUPKK employs at least 20 employees, until 2020, the shipping agency business had given 15,000 jobs to employees. This excludes numbers of jobs given by the companies with SIUPAL. 

This high employment absorption proves that the government policy on issuing SIUPKK is on the right track, in line with the spirit of President Joko Widodo to support the UUCK to create more jobs in this country. 

Indonesia issued the UUCK (Omnibus Law) in November last year, an effort to create more and more small- and medium-scale business (UMKM) and more jobs for work force. 

As the association of shipping agencies, ISAA appreciates this UUCK (UU No 11/2020) as it

becomes a legal basis for shipping agencies business. The Article 31 of the UUCK says that some related business entities, including shipping agencies, can be involved to support the water transportation business.

Legal Basis, Operational Guidelines

The regulation on this business sector has been revised for several times. At the beginning, the government issued Permenhub No.11/2016, in which it requires minimum capital of Rp 6 billion to set up a shipping agency company. But then, the government issued Permenhub No 24/2017 on the Withdrawal of Capital Requirement for Sea Transportation Business Entities, Shipping Agencies, Stevedoring Companies, and Port Operator Business (BUP).

And the government continued to give some easiness for this business to get growth, through OSS (Online Single Submission) registration. This new system that the government encourages to apply national wide, is mean to register business and commercial in an online basis.

The Ministry of Transportation then issued the Permenhub (PM) No. 65/2019 on the Business Operational of Shipping Agencies, in which it details operation manuals for this business.

According to this PM, the works and tasks of the shipping agencies in Indonesia include: a). Reporting the planning and realization shipping arrival and departure schedule to the Ministry of Transportation; b). submitting vessel document to Harbour Master, Port Authority, or local port authority; c). handle port service affairs needed by the vessel/ship; d). Appoint stevedoring company on behalf of shipowner; e). Do extension of vessel document on behalf of shipowner; f). Collect mooring fee on behalf of shipowner; g). cargo collection and reporting; h). Issue konosemen for and on behalf of shipowner; i). Issue bill on behalf of shipowner; j). Prepare bunkering and vessels accommodation including fresh water supply; k). Supply information needed by shipowner.

Agencies in some countries, like in Singapore and Japan, have handled these works and tasks, supporting them to get much progress and making shipping agency as a business entity giving high contribution to the economy growth, shipping sector growth in particular.   

Equal Treatment for Fair Competition

The existence of shipping agencies as a business entity, may raise pro cons, some agree but some disagree. The pro cons situation raises as this business entity will be run both by the companies holding SIUPAL and SIUPKK. However, in general, this will encourage them (SIUPAL and SIUPKK companies) to have a healthy and fair competition to support this industry getting progress.

“Competition will encourage companies to get progress,” Prof. Ningrum Natasya Sirait, Law Lecturer Expert with on Business Competition Specialist from University of USU, said in recently Webinar. 

Ningrum expects the shipping agency business entity to run in a fair and healthy competition, meaning that the opportunity should be addressed fairly to both, SIUPAL and SIUPKK companies. 

Prof. Senator Nur Bahagia, Logistics and Supply Chain Specialist from Technology Institute Bandung (ITB) added that a healthy competition can be realized under equal treatment among players.

Hence, he expects the laws and regulations should support for the equal treatment among the business players.

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